What to watch out for when investing in Brisbane properties

As such, several investors are eager to capitalise on buying opportunities opportunities before property values start to increase.

In fact, according to Streamline Property Buying’s Melinda and Scott Jennison, a ‘healthy competition’ has already become prevalent in certain markets across the capital city.

Moreton Bay, in particular, has emerged as one of the top-performing markets across Brisbane, boasting one of the highest levels of growth among Australian shires, largely spurred by infrastructure spending and the increasing level of interstate migration and population growth.

According to Ms Jennison: “On top of supply and demand, it also comes down to having locations where people can secure good jobs, high-paying jobs.”

“We feel that Moreton Bay will gentrify quite quickly with young university students moving in, so we’ll see the types of accommodation gradually change over time to suit their preferences. There’s lots of opportunities within the area and the region as a whole because of this gentrification.”

Still, as good as the wealth-creation potential is, the buyer’s agent duo reminded investors that risks remain in the Brisbane property market, especially as it is yet to fully recover from the decline it witnessed following the Queensland floods and the end of the mining boom.

How can investors identify the red flags in the Brisbane property market?

Due diligence

Among the common issues for property investors in Brisbane – which they may not typically face in other markets such as Sydney and Melbourne – is the risk of flooding as the capital city sits on a flood plain.

Ms Jennison, therefore, strongly encourages investors to check on the flood maps of the city to find out which areas have the possibility to be impacted by flood in the future.

“We all know of the devastation brought by the most recent floods, and it’s possible that it reoccurs at some point in the future.”

While the lower prices of properties in flood zones might be enticing for investors, particularly those with limited financial resources, Mr and Ms Jennison actively try to avoid buying properties for their clients in these locations.

According to Ms Jennison, despite the growth that have been witnessed by some flood-prone areas, the risks usually outweigh the benefits.

“They are priced at a lower entry point, generally speaking, and some of the areas in flood-prone regions have experienced superior capital growth recently, but there is an increased risk for property buyers, particularly investors with higher premiums.”

“It ultimately depends on the investor’s risk appetite as to whether they would consider a property that’s in flood-affected area.”

On top of the risk of flooding, investors are also advised to be wary of ‘character homes’, or homes built before 1946, which are protected by a ‘character overlay’ within the council code, Ms Jennison said.

“Those types of homes have special requirements, like if you do want to change the front façade, add a set of steps, or renovate them – depending on the scope of the works – you would actually be required a development application.”

“For an investor who’s looking to purchase in inner city locations, certainly some of the blue chip suburbs, it’s really important for them to understand additional costs associated with any rectification works or any future planned renovations. An application to council automatically triggers additional expenses, and that’s okay as long as you’ve included that in the budget,” she highlighted.

Renovating in Brisbane

Being aware of the unique issues that homeowners face in Brisbane will allow investors to make smarter decisions moving forward, according to Mr Jennison, particularly when they decide to renovate their properties for profit.

Apart from flooding and the council protection on character homes, investors are also advised to be wary of ‘timber homes’ when renovating a property.

Mr Jennison explained: “In Queensland, we got a lot of timber homes. Things like LED paint, asbestos, those types of things, can really add costs on quite quickly.”

He also encouraged investors to minimise structural change in order to be in sync with the street’s overall character. Focus on simply improving the liveability of the home by keeping the interiors modern and in good condition.

“If you can just work with the property that you got, that would be great,” according to him.

“We have a bit of a saying, ‘You can’t change the location, but you can change the house.’ The change doesn’t always have to be dramatic. Work with the body of the building that you've got of the building and just try to change that around to suit the lifestyle that people like.”

Miss Jennison highlighted: “We have that ‘Queensland style’ and we do appreciate the character of our streetscape… At the end of the day, Brisbane as a landscape is based on the fact that we have those Queensland homes. We don’t want that to disappear.”

Tune in to Melinda and Scott Jennison's episode on The Smart Property Investment Show to find out how to maximise investment opportunities in the Brisbane property market.