Why hasn't Brisbane boomed?

Discussion in 'Property Market Economics' started by JDP1, 11th Apr, 2017.

Join Australia's most dynamic and respected property investment community
?

Why hasnt brisbane boomed ?

  1. Because it's a country town

    5 vote(s)
    7.7%
  2. The state government is innefective

    10 vote(s)
    15.4%
  3. We are a bunch of toothless rednecks

    4 vote(s)
    6.2%
  4. Jobs? What's that? Isn't that what welfare is for?

    31 vote(s)
    47.7%
  5. All of the above

    11 vote(s)
    16.9%
  6. All of the above

    4 vote(s)
    6.2%
  1. JDP1

    JDP1 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    4,244
    Location:
    Brisbane
    Why hasn't Brisbane boomed like Sydney and Mel and what will it take?
     
  2. Colin Rice

    Colin Rice Mortgage Broker Business Member

    Joined:
    9th Jul, 2015
    Posts:
    3,183
    Location:
    Perth
    Supply and demand?
     
    Frazz, Anthony Brew, Gingin and 2 others like this.
  3. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,784
    Location:
    My World
    I started a thread on this subject and this link explains why? jobs, economy, oversupply of apartments impacting on all aspects of property


    QLD - Why Hasn't Brisbane BOOMED
     
    JL1 likes this.
  4. teetotal

    teetotal Well-Known Member

    Joined:
    7th Nov, 2015
    Posts:
    736
    Location:
    Sydney
    Supply and Demand +1
     
  5. hash_investor

    hash_investor Well-Known Member

    Joined:
    11th Oct, 2015
    Posts:
    2,439
    Location:
    Sydney / Canberra
    Jobs. It is just not as big a brand as Sydney.
     
    MTR likes this.
  6. JDP1

    JDP1 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    4,244
    Location:
    Brisbane
    Why should we work in Brisbane when Sydney and Melbourne are doing such a fine job of keeping the country afloat :p:D
     
  7. Ko Ko Naing

    Ko Ko Naing Well-Known Member

    Joined:
    10th Aug, 2015
    Posts:
    619
    Location:
    Melbourne
    Because it's in a sunshine state? Personally, I'd migrate to Brisbane, if there are many jobs for my profession.
     
  8. highlighter

    highlighter Well-Known Member

    Joined:
    2nd Jun, 2016
    Posts:
    930
    Location:
    Australia
    You know, I suspect Brisbane is going to replace Sydney and Melbourne as our next bubble.

    Hear me out.

    So, in USA, many cities (LA included) saw an extensive correction after a speculative bubble not unlike Australia's. Investors flooded in, construction exploded, oversupply hit and it eventually all went pear shaped. But cities in California at the time weren't really in a terrible bubble, with the exception of LA (on a median multiple of 11.4 - less than Sydney now, but still pretty damn scary - much higher than Ireland's peak).

    When USA's market corrected hard, most major bubble cities (LA included) lost between 25 and 70%, typically in the middle of that range. After the recession, however, investment had to go somewhere. A lot of it went into California. Part of it was a clever effort by California to attract business, especially around Silicon Valley with the tech boom (recessions are actually brilliant for entrepreneurship and industry disruption - it helped companies like Netflix, Amazon etc get a real foothold and oust competitors that had previously dominated the market). Part of it was the fact that bubbles depress economies - when people owe too much they stop spending. Another issue is when people are all investing in real estate they're not investing in business growth.

    Major cities in California had strong industries and self-sustaining economies that, even through a recession, kept chugging along. Investment flooded in, needing somewhere to go. So basically LA went right back into a bubble (it's on 9.2) and other Californian cities became bubbles too. I honestly don't think they're near bursting, as USA's economy is picking up - they're where Sydney was in 2009, in a bubble but one with too much momentum to be going anywhere soon.

    Suppose Sydney and Melbourne correct hard - a real possibility, at least. Where are investors going to go? Southern Queensland has the weather, tourism, size - and through the worst of the bubble it's just been plodding along in the doldrums. For this reason (uh and full disclosure also because I live and invest there) I think Brisbane has some real hope.

    It's not just Brisbane though - our less bubbly big cities (Adelaide, Perth etc) are of a size where their economies are usually self driving (as opposed to small economies like say Darwin, Port Macquarie, Hobart where there's a lot of sensitivity to industry waxing and waning). Brisbane is always going to do its thing - it's diverse, popular, and it could just come to benefit someday from being not Sydney, and not Melbourne. If a lot of people nope out of these locations (and you could argue this is already a trend, though whether it will continue is hard to predict) Brisbane is a likely destination.

    Why hasn't it boomed? It's been on the nose a bit. It's been overshadowed by Sydney and Melbourne, with their stronger returns. Brisbane is actually barely a bubble. But if Australia's bubble does burst, and any significant correction occurs, Brisbane is in a great position to pick up the slack.
     
    Propin and Blueskies like this.
  9. WattleIdo

    WattleIdo midas touch

    Joined:
    18th Jun, 2015
    Posts:
    3,429
    Location:
    Riverina NSW
    Tourists - where are they?
     
  10. zzzzz

    zzzzz Member

    Joined:
    22nd Feb, 2017
    Posts:
    13
    Location:
    AUs
    Because the Chinese aren't piling into it like they do with Syd + Melbourne. In Brisbane, they all move to Sunnybank which has surged in recent times, with most properties being close to $1mill. Go just 10 minutes out (e.g. Inala) or 15 minutes out (Springlakes) and most properties are still around $350k. This tells me, immigration plays a major part in price rises.
     
    highlighter, HUGH72 and Marg4000 like this.
  11. Kangabanga

    Kangabanga Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    1,497
    Location:
    Brisbane
    It's better to be on the dole in sunny QLD?? :D

    but seriously, there's just too much land eveywhere. For anyone interested, there a massive heap of H&L lala land in ROCHEDALE. Yep. Just go have a look, its just past the big rubbish dump..

    Also a lot of Brisbane's population is spread out over Sunshine coast and Gold coast as well.

    Lastly of course the mining boom has just fizzled out hence money flowing into the state is not much and QLD is also neck deep in debt, we had to lease some core assets and think we are still deep in debt after that..

    Oh yah and bad weather. Cyclones floods and such are a common occurence and only to become more frequent as global warming gets worse.

    And yes chinese , indians and pommies not piling in as much as Syd/melb. And when they do its pretty limited to just a few suburbs
     
    Tenex, Gockie and MTR like this.
  12. Inov8ive

    Inov8ive Well-Known Member

    Joined:
    17th Jul, 2015
    Posts:
    709
    Location:
    Sydney
    Probably gold, blue chip stocks or international markets. I don't think that Brisbane will benefit from a hard correction in the southern states but in fact the exact opposite. If the prices in Sydney and Melbourne plummet how will that make Brisbane more appealing? I mean with lower wages, smaller economy, less demand, less fundamental attributes for investment. Brisbane will benefit from the continued growth or at least "lack of price drop" in Syd and Melb. Why? Well the gap between them needs to be large enough in comparison to wages and house prices to be appealling to investors. If prices plummet 20% in Melbourne, I don't think Brisbane would be a more appealing prospect.
     
    Tenex, Marg4000, Invest_noob and 3 others like this.
  13. JDP1

    JDP1 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    4,244
    Location:
    Brisbane
    yes, i did want to include another option in the poll ' because it does not have foreign money' or the like, but i couldnt once the poll was created- ie edit button did not allow me.
     
  14. JDP1

    JDP1 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    4,244
    Location:
    Brisbane
    to a degree yes, but i would not think to a large enough degree. If syd/mel tank, then some investors who only are familiar with property will only look at property markets- and brisbane will likely be the next best thing given its buy in price and where its at in the cycle and its fundamentals. Some will go into other classes such as gold, cash, or simply do nothing a while.
    Personally, I bought more into aggressive growth incl emerging mkts funds during the last bear market. It was not leveraged like property ( thus not a big $ gain) but its shot up large % wise that makes sydney property cg look modest.
     
    Whitecat and highlighter like this.
  15. Sonamic

    Sonamic Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,340
    Location:
    Sunny QLD
    Sunshine Coast and Gold Coast are not Brisbane.
     
    Cactus likes this.
  16. Matthew

    Matthew Active Member

    Joined:
    8th Dec, 2016
    Posts:
    27
    Location:
    Sydney 2125
    I've held off buying in Brisbane because it's always lack lustre. Like the others have commented, I don't see anything changing soon either to make it boom.
    The other worrying trend is vacancy rates rising to over 3% in a lot of the Logan and Ipswich areas. I was looking at a property in North Booval online recently and on doing more research the vacancy rate was 3.5%. Yikes
     
  17. Northboy

    Northboy Well-Known Member

    Joined:
    1st Dec, 2016
    Posts:
    128
    Location:
    Sydney
    I still reckon people are going to get frustrated with Syd and Melb - not just the exxy prices but the fact that the cities are getting absolutely rammed. It's not fun anymore. I've spent my whole life in Sydney and I've always been so proud of the city. But I am now, for the first time ever, actively looking for opportunities to move elsewhere and get away from the craziness. Queensland is high on the list. I'm pretty confident I won't be the only one.
     
    mitsui, JMSmith, Whitecat and 5 others like this.
  18. Gockie

    Gockie Life is good ☺️ Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    14,736
    Location:
    Sydney
    Great post. All this and a lack of jobs equals no boom....
     
    Invest_noob likes this.
  19. Creamy

    Creamy Well-Known Member

    Joined:
    27th Aug, 2015
    Posts:
    105
    Location:
    VIC.
    I'm the exact opposite. I moved away from Brisbane due to lack of job prospects, not enough going on in the city and the humidity. Brisbane weather is great...6 months of the year.
     
  20. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,626
    Location:
    At work

    Bad weather? Do you really live in Brisbane?
     
    Whitecat and HUGH72 like this.