Properties within a 10km radius of the Brisbane CBD are tipped to boom as oversupply issues that have plagued the market disappear, industry experts have suggested.
During a recent taping of the Smart Property Investment webcast, CoreLogic head of research Tim Lawless predicted properties just outside the Brisbane capital as the next hotspot.
When asked to give his tips on where to invest based on suburbs, Mr Lawless said Brisbane, which has previously been plagued by oversupply, is the big winner in the property market.
“I’d be buying... My first option would be buying a detached house within Brisbane, an established home within 10 kilometers of the CBD, at least 607 square meters of land, that’s your classic 24 perch block there,” Mr Lawless said.
“And you’re going to be renting it out for 650 to 750 bucks a week, so classic 5.5 per cent yield. Really good value there. Values haven’t really moved too much in that bracket, and you got inherent scarcity there as well,” he continued.
While highlighting that Brisbane’s apartment construction peaked four year ago, Mr Lawless said he still believes certain parts of the capital are better buys than others.
“If I was buying in Brisbane though, I’d really be trying to target, well, first of all the best suburbs around the inner city. So looking at areas like , South Brisbane, New Farm, Teneriffe, , those sort of areas,” Mr Lawless said.
Pure Property’s Paul Glossop offered a similar sentiment, noting the real value showing up in Brisbane is in the freestanding established housing market.
“If I was in Brisbane, I’d be wanting to live in Brisbane or looking to downsize or buy my first home, I’d like it as that option. Still probably question whether four to 500 grand in that particular property in that market is the best place for my money at the stage.”
However, Mr Lawless acknowledged he has been waiting for the Brisbane market to peak for a number of years now.
“I’ve probably done my fair share of suggesting Brisbane would show a much better performance, to be honest. So, I need to be careful what I say. But, once again, I think it’s probably one of the best options to be buying into around Australia at the moment. It’s incredibly affordable,” he said.
“Look at the last 10 years, values have risen less than incomes. They drop like 1.5, 2 per cent per annum, mixed with some subtle rises, some subtle falls. So it’s a very affordable market, Australia’s third-largest city, very strong population growth,” Mr Lawless concluded.