Over the last 10 years, Brisbane has suffered the GFC and floods. As a result, prices are now extremely affordable for a capital city. The Brisbane market has some of the best growth prospects nationwide, so let’s explore why this market is set to take the gold medal for capital growth.
Since the GFC, net migration levels have been very poor for Queensland. However, net interstate migration to Queensland has tripled over the last three years. Interstate migration to Queensland fell to a low of 5,753 in 2014, increasing to 11,581 in 2016 and 15,716 in 2017.
The majority of these people are moving from Brisbane, the Sunshine Coast and the Gold Coast. This increase in migration levels is due to housing affordability compared to other states, improving employment markets and the lifestyle factors that come with those two factors.
There is a surge of major development and infrastructure projects currently underway in Brisbane, to the sum of $12 billion.
Examples of these major projects are:
Queens Wharf ($3 billion) – Comprising of 1,000 hotel rooms across five hotels, a residential precinct of 2,000 units, a 100-metre sky deck, 50 bars and restaurants and a pedestrian bridge connection to Southbank. This will completely reshape the Brisbane’s river CBD precinct.
Cross River Rail ($5.4 billion) – The project will deliver a 10.2-kilometre rail link from Dutton Park to Bowen Hills, with 5.9 kilometres of tunnel under the Brisbane River and CBD, connecting to both northern and southern rail networks in and out of the CBD.
Brisbane Quarter ($1 billion) – This project is a mixed-use precinct incorporating office, retail, hotel and residential uses.
Brisbane Live ($2 billion) – A new entertainment precinct located on top of the Roma Street rail interchange hub. Facilities include a $450 million, 17,000-seat arena along with multiplex cinemas, an amphitheatre and proposed commercial, residential and hotel towers.
Last year was one of the strongest years for job growth in Brisbane’s history. In the last 12 months, Brisbane’s jobs growth has increased by 7.6 per cent. As a result, unemployment has fallen across the board to 5.5 per cent.
Recent jobs growth has been driven by Queensland’s service industries. While the resources sector has cut 22,000 jobs over the past two years, four other industries each created more jobs than were lost in the resource sector over that period: health, education, professional services and accommodation and food services (which is closely related to tourism).
The median dwelling across Brisbane cost 6.3 times higher than the median household income. As a comparison, Sydneywas ranked the second worst most unaffordable market in the world. House prices are a whopping 13 times higher than the median household income.
These factors are significant for Brisbane’s capital growth prospects over the coming years. Well-located houses (not units) are expected to be some of the best preforming sub-markets in Australian real estate.
The state government’s planned property tax increases risk wiping the state off the global investment map, warns Chris Mountford,
executive director of Property Council Queensland.Kevin Farmer
THE state government’s planned property tax increases, due to come into effect on July 1, risk wiping the state off the global investment map.
As the government begins work on the State Budget, the Property Council is ramping up efforts to highlight the hidden effects of the tax hikes.
These tax hikes will increase the cost of doing business, damage Queensland’s economic competitiveness and impact on every Queenslander.
With Queensland preparing to leverage the Commonwealth Games to attract new investment opportunities, these tax increases couldn’t come at a worse time.
Election campaign costings, released in the days prior to the November 2017 state election, revealed the government’s intention to introduce new land tax thresholds for aggregated land holdings with an unimproved value above $10 million.
Individuals, companies and trusts who are within this new threshold will be subjected to a 25% increase in the rate of land tax from July 1.
The government has also committed to increasing the stamp duty surcharge on foreign buyers of residential property from 3% to 7%.
The end result of this decision will be higher business rents, higher costs for new homes and damage to Queensland’s reputation as an investment destination.
Businesses who lease premises from larger landlords can expect additional rental and occupancy costs.
New homebuyers can expect an additional $800-$1000 added to the cost of purchasing a new home.
We once were able to lure investment from interstate and overseas with attractive tax rates, but we now find ourselves uncompetitive with our southern neighbours.
The Property Council is calling for the government to abandon the tax increases and commit to review and modernise Queensland’s property tax framework.
Our current land tax thresholds haven’t been changed in a decade, leading to significant bracket creep as property values have increased dramatically.
We need a simpler, fairer and more attractive property tax system to unlock investment and create jobs.
An all-encompassing review of Queensland’s outdated thresholds and property tax rates needs to be undertaken to put Queensland back on the investment map.
Chris Mountford is executive director of Property Council Queensland.
Interstate migration to the Sunshine Coast is tipped to help drive up property prices. Picture: Lachie Millard
INTERSTATE migration is once again driving up demand for Sunshine Coast property.
New analysis of the market by RiskWise Property Research predicts solid capital growth for the region as a result.
RiskWise CEO Doron Peleg said the area had experienced “consistently strong population growth’’ in the past five years and predictions were that this would continue.
The Sunshine Coast market has been widely tipped by real estate analysts to experience a lift in prices, after a series of lean years.
The high-end Noosa market in particular has fired up again with a series of record breaking beachfront sales, but it was also the affordability of many of the Sunshine Coast suburbs that Mr Peleg said was helping attract new residents.
“The area’s affordability has been a major drawcard behind this migration, especially for large numbers of interstate purchasers who can’t afford to buy such great lifestyle properties in places like Sydney and Melbourne,” he said.
Also helping drive demand and future capital growth, according to Mr Peleg was the low number of building approvals in the region.
21-23 Webb Rd, Sunshine Beach was listed for a massive $22 Million. Picture: Paul Smith
He said there were only 3323 house building approvals in the pipeline across the entire region and that would be quickly absorbed.
There are also approvals for 2581 new units to be added in the two years.
Mr Peleg said there had already been 7.1 per cent median house price growth for houses on the Sunshine Coast and 5.4 per cent median unit price growth in the past 12 months.
Sydney, you’re pretty, but let’s take your prices down a notch, eh? Picture: Destination NSW
IT’S no surprise to most Australians that the cost of living varies greatly from one city, state or territory to another.
But exactly which places are the most affordable when it comes to everyday expenses including rent, fuel, groceries, transport, utilities and education? And which ones will burn a hole in your pocket faster than the others?
The latest report from Numbeo, a cost of living website which collates prices of goods and services from hundreds of cities around the world, shows that almost everything is cheaper in Hobart compared to other major cities nationwide.
It also confirmed what Sydneysiders already knew: it’s the most expensive place to live in the country. Melbourne, Darwin and Perth trail closely behind.
Labor leader Bill Shorten said the government’s priorities – including the Australian mining sector – were out of whack. “I wish they’d just start talking about everyday Aussies in terms of cost of living,” he said on Wednesday.
While Sydney ranked 32 in the list of the world’s most expensive cities, it was the 16th most expensive city in terms of rent, according to Numbeo.
Sydney has this year risen to number 32 in this year’s Cost of Living Index, up from 41 last year, according to Numbeo.
Melbourne rose to 64, up from 77, while Adelaide, Cairns, Hobart and Canberra also moved up the list to 58, 69, 82 and 103 respectively.
Only Perth (56), Darwin (68) and Brisbane (93) have become more affordable, according to the site, which ranks the results based on information provided by thousands of residents.
RENT, CHILDCARE AND RESTAURANTS
A one-bedroom, city centre apartment costs an average of $2681.48 per month in Sydney.
That’s compared with Melbourne ($1767.60), Canberra ($1733.26), Brisbane ($1726.13), Adelaide ($1705.67), Gold Coast ($1568.92), Darwin ($1524.35), Perth ($1523.41) and Hobart ($1208.33). Those with kids can more than double their outgoing expenses if they live in Sydney with the cost of sending one child to childcare full-time for a month about $2038.27. Child care is even more expensive on the Gold Coast ($2250) but significantly cheaper in Adelaide ($1600), Melbourne ($1478), Brisbane ($1243), Perth ($1214), Darwin ($1,200), Canberra ($1168) and Hobart ($683.33), according to the site.
The data also showed that costs including groceries, rent and restaurant prices were most expensive in Sydney and Darwin, while cities like Hobart, Cairns and the Gold Coast had some of the cheapest.
COFFEE, PETROL, UTILITIES
But not all is lost for Sydney – while residents might be down thousands of dollars in rent, they’re up an entire buck or two when it comes to coffee. Sydney is home to country’s cheapest hot drinks with a regular cappuccino costing about $3.90, compared with the highest median price for the same item in Darwin, at $4.75.
The Northern Territory capital might be small in size – with a total population of about 250,000 people – but it’s also home to some of the highest prices for fuel and utilities nationwide.
The national average for unleaded petrol is 138.9c per litre. But in the NT, prices soar above the rest, with a median price of 183.9c per litre in the troubled town of Tennant Creek, 176.9c per litre in Alice Springs and 150.2c per litre in the capital of Darwin, according to 2018 NT government figures. The median price for monthly utilities – including power and water – in Darwin is $332.80. That’s compared with the cheapest average of $181.20 per month in Perth. Even a meal at McDonalds will cost about an extra $2 than in other states.
MILK, BREAD AND BEER
The Gold Coast is also where you can find the country’s cheapest bread, at $2.12 a loaf. Brisbane follows closely behind ($2.14), with Sydney selling the staple food at the highest average rate of $2.80. And if you’re up for a good time at the lowest price possible, the Gold Coast is also where it’s at, with the nation’s cheapest in-restaurant domestic beer ($5.75). That’s compared to the most expensive average of $8 in both Melbourne and Darwin.
For the more straight-laced, Hobart could be a better option, boasting the cheapest milk at $1.11 for one litre. In Perth, the same product costs consumers about $1.59 – the highest average in Australia.
But the most isolated city in the world makes up in electricity prices what it lacks in cartons of milk, offering the cheapest average price for utilities in the nation. The average monthly cost of a power and water bill in a 85m2 apartment in Perth is $181.2. That’s compared to
Darwin ($332.80), Adelaide ($297.95), Melbourne (214.82), Sydney ($176.69), Brisbane ($212.60), Hobart ($236.99), Canberra ($184.73) and the Gold Coast ($184.41).
Hobart is the most southern of Australia’s capital cities, its harbour is the second-deepest natural port in the world, making it a popular destination for boaties. It’s also one of the cheapest capital cities in the country although wages are also below the national average. Hobart is also known for its arts and culture, its majestic scenery such as Mt Wellington, picturesque waterways including the Derwent River and rich cafe and restaurant scene. With a median house price of $402,000, strong capital growth and good long- term projections, the area presents a solid market.
Even suburbs that are located within less than 2km from the CBD, including North Hobart and South Hobart, with median houses prices of $582,000 and $631,000, respectively, are relatively affordable compared to cities like Sydney, where the median house price is upwards of $1 million and Melbourne where it has pushed past $840,000.
In Victoria, households are shelling out almost $75,000 a year on general living expenses, a major study of spending habits reveals.
The 2017 Household Expenditure Survey found that in 2015-16 essentials cost $843 of the average $1430 Victorians spent on goods and services each week.
Housing costs – on rent, mortgages, rates and home-and-contents insurance – were the biggest drain ($257), the Herald Sun reported.
Food, including meals out and non-alcoholic drinks, cost $244, and transport – driving, taxi fares, and train, tram and bus fares – cost $218.
A buoyant Canberra housing market is leading to healthy long-term investment options for savvy homebuyers, according to RiskWise Property Research.
While the Sydney market goes flat, many Sydney-based investors and buyers’ agents are looking to Canberra – which has a median house price of about $750,000 – as a solid long-term property market that delivers both capital growth and solid rental return.
Less than 300km southwest of Sydney, Canberra has enjoyed solid capital growth of 23 per cent over the past five years and 10 per cent in the past 12 months.
RiskWise Property Research CEO Doron Peleg said it was a trend set to continue.
“This will be driven by ongoing population growth due to the strength of the local labour market and its growing status as a city of choice for a growing number of Australians,” Mr Peleg said.
“Canberra is a rapidly expanding city with a stable property market that offers relatively affordable housing (in house-to-income terms). In addition, ongoing infrastructure projects, such as the Canberra Light Rail Network, will bring significant benefits to the area.”
An hour’s drive from the state capital Brisbane, the Gold Coast is the sixth largest city in Australia and is forecast to have 1.2 million residents living there by 2050, according to demographer Bernard Salt. The region has a stable property market that offers relatively affordable beachside suburbs, such as Miami which has a median house price of $749,000, according to industry experts.
CoreLogic’s regional market update to December 2017 places the median house price at $634,423, while the median unit price is $411,229.
RiskWise CEO Doron Peleg said that despite gaining infamy for violent incidences and drunken behaviour in Surfers Paradise, the Gold Coast was one of the most popular destinations for both owner-occupiers and investors in southeast Queensland.
“It has beautiful beachside and waterside suburbs, an unrivalled lifestyle, good infrastructure, a large number of well-off residents and locals who describe the Gold Coast as ‘heaven for children’,” Mr Peleg said.
“The Gold Coast has a stable property market that offers both affordability and excellent access to superb beach and coastal areas, and that is very appealing to buyers.”
But there are fears about what will become of the glitter strip’s property market once the Commonwealth Games, set to start this month, are done and dusted.
Collier’s Gold Coast International director Darrell Irwin said property market indicators showed the region had a “healthy sector” that would survive the exodus when the curtain closes on the Games.
“The Games has brought forward infrastructure investment in projects such as the light rail construction, and upgrades to the aquatic centre and Carrara Stadium, which have helped fuel demand across the board in the residential, commercial office, retail, and industrial sectors,” he said.
“We’ve seen commercial office vacancy rates continue to fall over the last three years to the current level of 10.3 per cent as reported in the most recent Property Council of Australia figures.
“With no new office buildings under construction, we expect to see that vacancy rate fall further.
“Similarly in the industrial market, there’s been strong demand, a falling vacancy rate and limited land supply.”