Why Hasn't Brisbane BOOMED

Discussion in 'Property Market Economics' started by MTR, 28th Dec, 2016.

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  1. MTR

    MTR Material Girl Premium Member

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    Source - Brisbane Property Market Outlook 2016 - Aqullia
    Brisbane Property Market Outlook

    Extract below -

    Why hasn’t Brisbane boomed?
    Put simply, Brisbane has not experienced the population or jobs growth of Sydney and Melbourne. Population growth is down substantially on its average, particularly amongst interstate migrants, which is the kind of population growth that leads to more property being bought (as opposed to babies being born!). Migration is heavily influenced by jobs growth, and Brisbane has only produced 8000 new jobs in the last 12 months (half as many as the Gold Coast). Income growth has been subdued as well.


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    The boom in Brisbane apartment supply has stopped any price growth in this segment

    At the same time, there are has been some major issues with oversupply in the unit market. The number of units settling in Brisbane in 2016 is double the total number of average yearly unit sales (both new and established). This is an extraordinary figure. This wave of new supply isn’t getting soaked up, because there is not the demand either among the young professional or downsizer markets these properties cater for. As a result, prices are falling and vacancy rates are rising in these areas of new supply.

    It does mean that investors hoping to buy in the market and experience the kind of lazy capital growth seen in Sydney are likely to be disappointed. You’ll need a more strategic approach than that. We’re now going to dig a little deeper and see how events have unfolded on the ground in Brisbane’s individual property markets, and what to expect in the future.

    What property in Brisbane has performed well in 2016?
    As predicted, the most consistent growth has occurred in detached housing in Brisbane’s inner to middle ring suburbs. Brisbane’s northside has generally performed better than the southside, with growth rates on average between 4-5% versus 2-3%. Brisbane’s inner west has also been a strong performer. Some of the standout suburbs have been:

    • Nudgee: 11.0%
    • Everton Park: 10.0%
    • Kenmore 8.4%
    • Toowong 8.4%
     
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  2. Sonamic

    Sonamic Well-Known Member

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    Because Brisbane is not Sydney or Melbourne and the past does not always predict the future.
     
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  3. MTR

    MTR Material Girl Premium Member

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    The booms we have recently seen in Melb and Sydney have not followed previous pattern/boom cycles either.....in terms of where they started, history did not repeat.

    I would say the impact of the downturn in mining played a factor on Brissy property market not going gangbusters.
     
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  4. Sonamic

    Sonamic Well-Known Member

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    My point exactly.

    The sheep following previous historical boom paths have poured into Brisbane. They should now be pouring into Perth. Because historically it goes Sydney followed by Melbourne. Check. Next is Brisbane right followed by Perth.

    Oh wait. BAH BOW!

    I could be well wrong. But the newer generations banking on Brisbane following the rags to riches recent booms of Sydney and Melbourne will be disappointed that history is NOT repeating so much this time round. Brisbane HAS moved somewhat, don't get me wrong. Perhaps the internet has broken the old wheel that dealt the same easily played cards in boom times past. Now it's everyman for himself.
     
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  5. Drizzt Do'urden

    Drizzt Do'urden Well-Known Member

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    As the politicians like to say ... jobs, jobs, jobs, jobs, jobs, jobs ...

    It would also help if they could get their train timetable/driver issues sorted out.
     
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  6. Biz

    Biz Well-Known Member

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    Hardly call it a boom but it hasn't done too badly. A lot of areas are up between 20-40%.
     
  7. Sackie

    Sackie Well-Known Member Premium Member

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    Hasn't boomed but like @Biz said, there are areas that have gone up substantially in the last 24-30 months.

    Some very, very good investments missed. I've seen great:

    - Fixer uppers
    - Renos
    - Structural deals
    - Straight out ips
    - Development deals

    You don't need a whole state to 'boom' in order to grab your small part of the pie and do very well imho.
     
  8. BB5

    BB5 Well-Known Member

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    The top 2 suburbs listed are full of recent new builds. Have they really shifted that much?
     
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  9. MTR

    MTR Material Girl Premium Member

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    That's Trumps... calling card....JOBS JOBS JOBS
     
  10. MTR

    MTR Material Girl Premium Member

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    I am sure there are some that have done OK, but this market is fragmented unfortunately, hit and miss.
     
  11. MTR

    MTR Material Girl Premium Member

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    ...... but what investors don't actually realise is that ..............
    Sydney, Melbourne and Perth were actually booming at the same time would you believe. The difference however is that Perth only boomed for a very short period (2 years, 2013-2014), this was driven by FHB market sub 500K.

    Melbourne flew under the radar because investors got stuck looking for value, and Brissy ticked the box, however what they did not realise was that there were areas/suburbs 17 km from CBD in Melb that were as cheap as chips on large/development sites in 2013/14, they are now long gone due to the boom.
     
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  12. MTR

    MTR Material Girl Premium Member

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    I agree, but when developing you have to be strategic, I would want to know that developers have already jumped in and there is plenty of fat in the deals. In booming markets its much easier to make money because as they say the trend is your friend, its almost bullet proof if you get in early enough.
     
  13. RetireRich101

    RetireRich101 Well-Known Member

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    Here's what is going down in my diary as the year ends...

    Brisbane has done its "green shoot" in the last 2-3 years for most suburbs..

    If it doesn't boom in the next 3-5 years, I will edit my dairy as a "mini-boom"

    This mini boom will be written ( in my diary ) as similar to Sydney 2010-2011 and Perth 2013-2014.

    Sydney then had a dip in 2012 and then follow a boom 2013-2016. Could Brisbane 2017 resemble a Sydney dip right now?
     
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  14. MTR

    MTR Material Girl Premium Member

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    The question is what % are we talking for Brissy .... in terms of mini boom.?

    For example Perth's mini boom is more about time frame, some investors doubled their money by buying the right properties that were earmarked for rezoning, perhaps 40%+.
     
  15. Sackie

    Sackie Well-Known Member Premium Member

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    From a development perspective I agree, but keep in mind all the other strategies/investors who do B&H, renos etc. For them, if they didn't seriously investigate Brisbane over the last 2 years then they would have missed some great opportunities imo. Nothing wrong with that either because they may have bought else where, but doesn't change the fact that Brisbane has had some great deals, especially in the inner/mid rings imo.
     
  16. BarneyRubble

    BarneyRubble Well-Known Member

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    Agree.

    Tell me which companies have their head office or if international, their main Australian office in Brisbane?

    There are a some of cause - Collection House, TechnologyOne, Data#3, Anglo American, Virgin. Unfortunately now I am starting to run out of names.

    Brisbane just is not the major employment centre like Sydney and Melbourne.
     
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  17. MTR

    MTR Material Girl Premium Member

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    When there are no jobs you get what we are now seeing in Perth a falling market, market sentiment is not good and people don't buy because they are either worried about losing their job or have lost their job. You do not get booms when you have this, in particular Perth.

    I find it ridiculous when I read posts by members predicting a boom in Perth in 12 months time, show me the jobs first...... no jobs no boom, its that simple. Any State that is booming usually means it is prospering.
     
  18. RetireRich101

    RetireRich101 Well-Known Member

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    me thinks some suburbs did 10-15%, some did 15-30% for the last 2 years, so we're looking annualized 5-15%... bit scattered I know..
    We arnt talking about zoning, reno, development, just regular buy n hold scenarios...
    I know someone purchased a property in Logan in 2015 prior to rezoning, and on sold 12 months later for 25% profit... but this minority reference isn't what we're looking for to compare apples to apples..
     
  19. MTR

    MTR Material Girl Premium Member

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    Yes, I think some would have done OK. But the *******s that purchased in Syd/Melb are the real winners.... damn them.....LOL
     
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  20. ellejay

    ellejay Well-Known Member

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    Unless holding longer term I would guess that the gains most have made would be swallowed up by buying and selling costs, stamp etc. Makes it tricky to turn a profit short term and move on to the next deal. Not saying it can't be done.
     
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