Month-In-Review-March-2015

Month in Review
March 2015
Queensland
Brisbane
Last year was healthy. About 6% across the board
with inner areas doing better, but outer suburbs not
so well. Overall though we are a capital whose recent
property history has been relatively unhealthy. Apart
from post-GFC hangover, our 2011 flood and other
moments of failing to fire meant many expected
a hot, hot run in 2014. It didn’t quiet pan out that
way, but there is positive momentum that lays a
foundation for 2015.
Buyers shouldn’t expect Brisbane to perform like
Sydney – it just doesn’t. We’ve had our years of
20% growth but it’s highly reliant on interstate and
overseas migration as well as strong employment
prospects and general economic good times. Our
cheaper buy-in prices are, however, attractive for
those looking to get into a capital city, so there’s still
plenty to offer here.
Overall, we’re saying Brisbane property owners
should expect to see the number of sales and other
general activity to continue along the same lines
established by the end of 2014. Translation – look to
our long term averages and you’ll be about right for
2015.
New construction is expected to be buoyant for both
house and land packages and units. The building
industry is being touted as an employment savior
that can pick up the slack of mining industry layoffs,
after all.
In terms of suburbs on the go, the ‘ripple effect’
appears to be well underway. Inner and near-city
suburbs saw attractive gains in 2014, so it’s time for
suburbs further out to start shifting as affordability
close in becomes more of an issue. Mid to outer
suburban areas are now experiencing a pickup in
buyer demand, or more specifically, entry level
property within these locations. Investors are
certainly keen to stay ahead of the wave of course,
and there’s interesting infrastructure underway
to help drive gains. The train line extension to the
Redcliffe Peninsula is a case in point. For this reason,
try looking a bit beyond the currently growing mid
ring suburbs if you want to shore up equity gains
this year. Those affordable markets should put on a
respectable performance over the coming year.
As for the inner city hotspots, they seem to have hit a
sustainable level of price growth that should continue
over the next 12 months – once again long-term
averages are your guide.
Our strongest caution for those looking to invest in
2015 is to watch out for unit stock. Specifically poorly
designed investor grade product – there will be a
lot of it coming on line and if the developers only
thought is to offload end-product quickly without
considering their projects ability to maintain value
over the longer term, then those who buy are in for
grief. Overall, buyers need to be conscious that this
market is experiencing significant uplift in supply
over the next one to two years at a time when the
vacancy factor has already increased and interstate
migration is still languishing. This could keep the
overall market relatively honest because there’s
potential for the new unit supply to draw on the
suburbs to some extent plus new house and land
construction.
Until the time comes when the southern states see
the light and interstate migration kicks back in,
expect modest gains from our sunshine state capital.
Toowoomba
Interest rate cuts look set to encourage the stability
but not increase the momentum of the Toowoomba
residential property market in the early stages
of 2015. With interest rates already at a low base,
the effect of further rate cuts is unlikely to have a
significant impact on values and activity.
Residential
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