Brisbane set to boom in 2014

Why 2014 is the time to Invest into Property in SE Queensland

If you have been invested in the Property Market in SE Queensland over the past 7 years you may have been disappointed with your results.

If fact the SE Queensland property market has been a terrible place to have been invested as property prices have remained flat or even gone down a little in some cases.

So why would you want to consider investing into a area which has underperformed for so long.

Well there are a couple of factors that drive property prices, and they are pointing to the likelihood of SE Queensland being the market where the best returns will be in 2014.

There are 5 main ones we will discuss :-

  • Population Growth
  • Interest Rates
  • Economic Activity, and
  • Infrastructure and access to amenities.
  • The Property Cycle

Population

Recently the Australian Bureau of Statistics released their Population growth numbers.  By 2040 the population in Queensland will have grown from 4.6 million people to over 7.3 million, with the largest majority of those in the SE corner of the state.

These people will require a roof over their head, consequently pointing to a continuing demand for property.  We are also starting to see a pick up in interstate migration as job opportunities increase in Queensland.

Interest Rates

When it comes to interest rates we have been at very low levels for a while now.  This has been great as it has meant that we have been able to get the mortgage under control, but it has also meant that the returns that have been achievable on our investments has been underwhelming.

We are starting to see investors looking to gain greater returns by looking towards the property and share markets.  With interest rates likely to remain around the current levels for the near future the number of people looking for greater returns will be increasing.

At some stage though interest rates will start to move up again.  Interest rates rise when economic activity is strong and the RBA is trying to slow the economy.  During times like these traditionally what this has meant for the value of Investment Property, is that prices rise and rental returns increase as well.

Economic Activity

The 3 fastest growing economies in Australia are WA, NT and Queensland with growth well above the national average.  Higher levels of economic growth lead to increasing employment and increasing population.  The mining sector has remained strong in Queensland and now the Tourism sector is rebounding quite strongly leading to greater confidence.

Infrastructure and Access to Amenities

The list of new infrastructure projects in the SE Queensland region are way to long to mention, from new airports in Toowoomba and new runways in Brisbane, to tunnels and highway upgrades.  To new tourist projects, casinos, cruise line terminals, the list is quite extensive.

Major retailers are also very active with Ikea building a new store at North Lakes, and major upgrades to almost all of the large shopping centres.  Public transport is also very important and the Gold Coast light rail will become a significant feature of the transport system in that city.  New train lines are also being built to Redcliffe and Springfield.

These projects do not go ahead unless there is a demand for them, and they are wonderful at creating more new jobs.

The Property Cycle 

It is fair to say that the SE corner of Queensland has missed out on the latest property market advances.  This is clearly evident when you look at the Median House Prices in the major capital cities across the country.

MarketMedian Value
Sydney$749,500
Melbourne$603,500
Darwin$573,500
Perth$521,000
ACT$527,500
Brisbane$445,500

Source Residex October 2013

When we consider the Brisbane, Melbourne and NT property markets which were all about even in 2007, since the GFC, we can see that the capital gains have been significantly greater in these other areas.

 

investment property brisbane

source ABS

So the SE Queensland property market has some catching up to do with the other marketing in Australia.  We can have a good deal of comfort knowing that the fundamentals that lead to investment property capital gains are all in place.

If you would like to discuss how we could partner with you to achieve your financial goals through safe property investment just give us a call on 0409228554 to arrange an appointment or click on the button on this page.

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Geoff
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Geoff

Senior Client Adviser at Success In Property
With over 30 years experience in Finance, Financial Planning and Real Estate, Geoff is ideally suited to show you how to build your Property Investment portfolio.Call on 0409228554
Geoff
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