Why Hasn't Brisbane BOOMED

Interesting that one. Mining was so much talked about as economic recovery, but I always thought tourism in QLD was also big thing, no?

 

No. 1 income - but don't quote me, I haven't checked.

Edit: Mining brings more income but tourism provides the most employment.
Tourism in Queensland -Key Highlights

• Tourism is a $10.93 billion industry for the State.
• Tourism directly and indirectly employs 241,000 Queenslanders.
• Tourism generates $60 million per day in visitor expenditure across the State.

Employment

• In 2012-13 tourism directly accounted for 140,000 jobs (or 5.9%) and indirectly accounted for 101,000 jobs, or in total 10.3% of employment in the state. This is substantially more than the mining sector (74,000 direct jobs) and agriculture, forestry and fishing (66,000 direct jobs).
• Cafes, restaurants and takeaway food services had the largest share of tourism employment (26%), followed by retail trade (18%) and accommodation (13%).

(Source: Tourism Research Australia - State Tourism Satellite Accounts 2012-13, Queensland Government Office of Economic and Statistical Research)

• Tourism contributes $10.93 billion directly to the Queensland economy, accounting for 3.8% of Queensland’s GSP and indirectly contributes an additional $12 billion to the Queensland economy.

(Source: Tourism Research Australia - State Tourism Satellite Accounts 2012-13)

Tourism businesses in Queensland are small businesses

• No other sector of the economy has more small businesses, with 9 in 10 tourism business

These figure are from 2012-13 which was a pretty low point for tourism. At peak times, there is even more employment provided.

 

Why Brisbane hasn't boomed?

It's time hasn't arrived yet why
Sydney and Melbourne are still booming, most expected them to come to standstill early 2016 but now they expect another 5-6% still coming in 2017 where 5% of 800k is greater than 6% of Brisbane prices.
Jobs growth standstill, so interstate migration is reduced.
Miners doing building construction thereby increases apartment supply.
Current QLD government worst for economy whereas previous government bad. Bcc vs state government keeps fighting.
Overseas wealthy investors doesn't prefer Brisbane compared to Sydney or Melbourne.
Tourism support gold coast and even sunshine coast. Tourists land in Brisbane airport and head off to gold coast to start spending money. Maybe 1 day they stay in Brisbane compared to 5 days.
Overseas students doesn't prefer Brisbane universities compared to Melbourne
Some minor people are slow to forget major flooding or thunder storms yet.
Imo Brisbane will grow in a sustainable manner say 5% growth for next 2 years and then bang 20-30% in 12-24 months thereafter. Good luck everyone.

 

nice post

 

Like the bang 30% gain....let me see....7 properties current value $2.5m...........in 12-24 months it is worth another 750k...I can handle that...and that might only be the start until say 2021!

 

I hope you're right @ndpjai, I really hope you're right……… just hold for me another PPoR, close to the river (but not in the flood zone - some sections of Hawthorne and Bulimba are lovely…..) without the 20-30% price increase, please…..

 

It has and it still is.
Inner city though plenty of OO action.
Brisbane did not boom but it did grow
The question then becomes will it continue to grow as Sydney and Melbourne come off the boil? There's a lot of upsides indicating that it will: investors, increased migration, huge infrastructure expenditure and a recovering economy

 

I agree with you most of their property predictors that are reported in the mainstream media seem to put Brisbane as growing around that 4 to 6% mark most saying at least on par or slightly ahead of Sydney and Melbourne seems to be the general prediction. I can find multiple links where this is reported from property commentators/analysts (not apparent bne spruikers) in the last couple of months.
So that modest growth combined with the attractive yields which investors are seeking in a capital city would seem to make Brisbane quite a reasonable proposition and yes historically when Brisbane has boomed it has happened fairly quickly and it has been a pretty solid boom at least that's what investors I know who have lived here for many years and have multimillion-dollar BNE portfolios have told me about the history (I'm not saying they shouldn't have also diversified).
Let's see what the Commonwealth Games do and the mega projects like Cross River , Metro, Queens Wharf.

 

That's a case study in point for BNE if you have yourself a PPOR in Bulimba very close to the CBD a nice little ferry ride across to New Farm/ Tenerife you are obtaining lifestyle for value that you cannot get in any other capital. I agree you need to get in quick to Bulimba if that's your goal. Yes of course nothing beats Sydney Harbour but the prices are just too attractive in Brisbane considering the amenities that you can get if you've got the dollars to get an inner city house walking distance to CBD - and that is still achievable under 1 million.
I live in East Paddington. I can walk down to Southbank and the cultural Centre. I can walk to the river the CBD, west End. The CBD has more and more happening as it's getting a huge makeover. There's cafes bars everywhere near me Given Terrace, Caxton Street/Barracks, Roma Street Parklands, Park Rd, Milton markets. And there's still plenty available under 1 million dollars. And for those properties in my suburb that are closer to 1.7m theres plenty of sydneysiders buying those because as they are quoted they would be looking at 3 million for an equivalent in Sydney.
I see big value in Brisbane I really do it's just so obvious (15 years ago when it was more culturally devoid and less metropolitan I could see the difference but now it's trendy and modern).
I'm not disagreeing with the fundamentals that @MTR and others have pointed out but we're going to see a catch up inevitably. The lifestyle and amenity for the price - there has to be a change.

 

I'd have to sell the IP's to get a PPoR in Bulimba (and even then, I think it would be tough) - not really an option at this point. I'll just have to stay where I am, and keep holding out for that lotto win, @Whitecat …...

 

Yes it is confusing as people get sucked into without making the appropriate due diligence there was one newbie who bought there I believe and was saying it ticked all the fundamentals but was negatively geared. I thought you go to Brisbane/SEQ to be positive as it was far cheaper than in Sydney or Melbourne. Just like the granny flat story (I am still confused why would anyone spend such a huge amount on it) when the median of the suburb is not even high enough to justify. I have a granny flat in vic (and it's cost is only 39K). it is true to buy in a rising market as in a boom market like Sydney or melb but as @MTR said the fundamentals are not there

 

Spot on. There aren't even proper flights to Brisbane more to Gold Coast Universities (really only UQ) - Europeans like hot weather year out but I can tell you SE Asians not so. Even Central Queensland University had to open up in Melbourne branches to get students in. The floods although a while back reminds people of earthquakes in china or japan. Of course it will grow but I don't think logan will boom like a mt Druitt.

 

I am sure Brissy will boom eventually, but really the point is not when but WHY it did not boom in 2014/15? and I think the link has pretty much identified why.

Perhaps investors also did not recognise the significant impact of the mining boom dying, QLD is a State very much reliant on mining. What I also found interesting about Brisbane is the oversupply of apartments is actually effecting the overall property market/values, yet cities like Melb and Syd also have oversupply of apartments but this has not impacted negatively on property prices overall.

Another thought..... the recent property booms in Syd and Melb did not start in inner city areas/suburbs, why? because of immigration ...... these people were looking for affordable areas with infrastructure in place also foreign buyers in these States looking for desirable locations in certain school precincts.

Perhaps those looking at areas in Brisbane to rise should look outside the square and look at drivers that could push prices north, ie Gold Coast may be a better option, tourism, Australia $ down etc will this push a certain product up? is it already happening and investors are focusing on the wrong areas? Just my thoughts

MTR

 

yup - gold coast better attractions and drivers. at least they got the beach and parks etc.

Tourism, ease of transport, education wise. if you look at the airasia website (of all the cities in the world it goes to, why isn't Brisbane in the Australian destination, Gold Coast, Darwin is). Forgot about their reputation or safety, just know they bring heaps of ppl when they do come over which spend $$ and $$ that goes to a lot of things. Coz they isn't demand for it atm.

 

Just a few points, I wasn't going to respond but you have made quite a few weak assumptions.
Several reasons but Brisbane airport is near capacity with the parallel rwy not due to open for many years. As a consequence excessive traffic holding hurts airline profit margins and cheap budget carriers work best when this can be avoided. Coolangatta airport is only about 50nm from Brisbane so it's a smart option.

Air Asia is an airline with a shocking safety record and appeals to a certain segment of the tourist market. That's it.
I don't know why you keep mentioning this.

Sorry but your geography is out, CQU is based in Rockhampton and has satellite uni's everywhere. It's part of their business model.

Agreed, but they are only approximately one hour away. No further than a typical big city suburban commute.

I thought you go to Brisbane/SEQ to be positive as it was far cheaper than in Sydney or Melbourne. Just like the granny

I must have been asleep and missed this point but when did anyone suggest that BCC property was positively geared?....
Most purchases may be negatively geared positive cashflow but that's it.
What would be more correct would be to say that you generally don't purchase places with horrible 2% yields.

Tip- After Hobart and Sydney, have a look which capital has the least number of days with temperatures above 40c.

 

Weak assumptions or not - it is all subject to discussions.

LIke I said don't hit on the record, their flights to Melbourne and Sydney are nearly full everyday. Certain market ? they are people who buy million dollar properties and travel airasia back and fort to melbourne and Sydney. Maybe business class for you but don't mock those travelers.Tourist, students, investors or not - they do bring dollars to the economy and I know ones who do buy property in the millions.

I think you must have. People go to logan to be positive am I correct? It is cheaper than Melbourne and Sydney? How many houses can you buy in Ringwood (Vic) Vs Logan? I can't recall the exact words but it was out of pocket every month - I maybe wrong in interpretation but that's how I read it. and I don't know how exp building costs are in Brisbane but 160K to build a granny? Are you saying that's cheap or it's the norm?. I have build a few turnkey houses in vic before for less than that each and they're inc everything from driveways, landscaping, fencing etc. is it wrong to ask that question that I think it is expensive ? which really it is or we can't even ask that now. Seems like everytime someone questions or asks something about the glorious brisbane is like you're in Thailand where you can't say anything against the monarch or like you're being slammed down by the Taliban in Afghanistan.

Why don'y you thrown in housing commission (does having more housing commissions increase prices? )

having a few 40 degrees days - is nothing than overall year around.

As for unis, only UQ is the reknown university most students aspire to. maybe CQU should call itself CMU or something to avoid mistaken as a uni from queensland.

Look I am not mocking Brisbane - just throwing it out there why there wasn't a boom. By all means say as much as you like negatively abt Melbourne or other places. Any feedback is better than just following the herd without asking questions as much as they are weak, strong or valid, everyone is entitled to their opinion at the very least.

 

Here's a thought as to why in prior cycles Sydney booms first, then Melb, then Bris catches (and the Gold Coast booms absolutely nuts).

Most of the heads of all major banks, and media companies, are based in Sydney. Hence there is a self serving and natural bias towards investing in Sydney first, lending in Sydney first, and discussing Sydney in broad media first. (Also with more financial professionals in Sydney people have more access to money, leverage, instruments etc). But, over time, there is a natural arbitrage that flows through other locations.

Thoughts?

 

Spot on.

 

Current boom started in Western Sydney. How many CEOs live in Fairfield?

@Whitecat said it best above, there is A LOT of value in Brisbane. What a lot of people are saying about there being no major corporate HQ up there, this will change. Melbourne was a lot like that too 25 years ago. Business does look for value too and as the cbd catches up culturally with its southern neighbors the prices will follow. It will never fully catch up to Sydney and MeBourne in my life time but the gap is going to close.

 

Reading through the many posts in this and another threads, there seems to be Abit of a backlash by some whenever Brisbane's 'hotspot' status or 'set to boom' postition is questioned.

From an investment perspective I looked at the Brissie market late last year/early this year... It's a very fragmented market to say the least.. While some areas have done/will do well...others have remained relatively the same. I really don't see the fundamentals for a Sydney/Melb type of boom.... Rather than a more steady type of increase..

Immigration, lack of supply and jobs...combined with super low interest rates is what drove the booms in Syd, Melb..

There are still some affordable markets in Melb ... These are hot and still rising.. Once these peak and flatten out. The Melb boom is done for this cycle.