Why hasn't Brisbane boomed?

I think this resonates when comparing Sydney vs other main cities. Logically, moving cities makes sense, but I think most people also have (consciously/ unconsciously) strong idea where they want to be and should be. Sometime these preconception make them feel quite hopeless and especially so in Sydney market.

I was just talking to some colleagues recently on how hard it is to get to the next home i.e. from apartment to townhouse/ house. I told them to look a bit further out. It didn't go down well and I don't think I deliver the message properly either, I was going to say look at different cities, but that'll probably go down even worse as they have their family in NSW.

You call Sydney winter hardcore??

 

Sometimes the temperature plummets down to 15 deg C !

 

I agree - Sydney winter is terrible! Very underrated. We are so in denial in this city about our weather, meaning we're never prepared when the inevitable bitter cold hits.

 

Or much less.

 

Its pretty chilly here in Syd today. Meanwhile yesterday in bne I was swimming in Enoggera Reservoir. But everyone has different tolerances.

I understand that people have some aversion to leaving Sydney if that's where their friends are and that's where they grew up and they feel that's where all the action is however we have now reached the point where it's not just about having mortgage pain to stay in Sydney it's actually near on impossible for a lot of people. And that will be the way it is from now on. There's just too much foreign money can be allowed in if house prices even look like they are starting to slip.
So if people can't afford much at all even with a life-restricting loan, many are going to look at other places.
So by arbitrage Brisbane will do a catch up. It's just too cheap for the third largest city

 

It can get down to -2 or even -3 at my place at about 5am on many days in winter.

 

I work in the transport/logistics industry and the performance of our depots based on state ranks like this:

1. NSW
2. VIC/TAS

3. QLD/NT
4. WA
5. SA

From a receivables point of view QLD/WA/SA tend to be the slowest payers in general as well.

 

In the 10-15 year range 2 bedroom units within 10klm's on the inner southside Brisbane in blocks of 4 ,they have been hammered in price over the past year..
Our daughter just settled on one yesterday in inner Brisbane the title holder paid 75kmore then the settlement price 7 years ago,but then you have development blocks in those same area's 800m2 have seen significant price changes in the very limited supply of double blocks,so many different markets within the BCC footprint..

 

right it comes down to the product. Also with the oversupply of apartments probably wont help the unit market?

 

• fall in jobs (leading to slower population growth)
• state government $40bn underwater (no room for meaningful stimulus)
• completion of construction phase of major LNG projects (end of the "boom")
• apartment oversupply (the other side of the supply/demand equation)
• no wage growth

The better question is; why would you even expect Brisbane to boom?

(hint: the answer isn't "because Sydney investors are priced out")

 

Agreed. Most important catalysts of wage growth/employment/new investment are not really there

today's job figures shows jobless rate holding at 5.9% (aus wide)
some improvement in unemployment in QLD which led by adding 28,800 jobs and jobless rate fell from 6.6% to 6.3%. However that is still worse than national average. W.A went from 6.1% to 6.5%, S.A went from 6.6% up to 7% - ouch -

Keep in mind these figures are pre-Debbie.

 

So as I can answer the poll correctly I needs to know......
Does wooden teeth count as toothless or not ?
Plus I have spent quite a while deciding between those last options.
Darn tricky quizzes.....

 

You can only look at it one way,in that small hillside city mountain views from the top floor deck area there are very few small 4 units blocks ,maybe less the 20 sales last year and my daughter missed out on the only 2 sales this year so i knew the value range..
As far as the over supply this area is a small niche market and as all the other Tenant's are private owners with a very healthy sinking fund it's worked out well..Plus striking the right R E agent who told it upfront that helped..

 

I think there are some longer term issues at play as well as the short term - where the mining/gas boom has lost its steam.
A lot of the "froth" in Sydney/Melbourne is from investors looking to park money. Many of these use historical returns to predict the future and thus Brisbane has done worse.
Second - and back to the 1800's, there was a major riot, where the locals chased out a large proportion of the Chinese population. To this day, Brisbane is less international than Melb/Sydney.
For Chinese investors, they arrive in Sydney/Melbourne and they feel (relatively) at home. There are some areas - often quite desirable ones, which are very Chinese. Brisbane has some small pockets of this, but they are not as desirable. This is changing - Sunnybank and CBD areas have increasing asian populations, and for the Chinese visitor (who we have to remember are more likely to be prejudiced towards living in a familiar ghetto).
Brisbane is becoming an international city - but will take some time. And not helped by the re-incarnation of Nativist politicians.

 

You are missing some huge infrastructure coming or being built
Queens wharf
Cross River Rail
Brisbane Metro
Cruise Terminal
Howard Smith Wharves (not so huge but a good one from amenity pov)

 

$9.5bn over 7 years is just shy of Victoria's Metro tunnel alone. i also hate to think how much of their rail investment goes to their indian built trains (opposed to Victoria's Vitorian built trains).

Don't get me wrong, they are some massive projects and will definitely help the QLD economy during those years. But are they big enough to pull a state in to real boom-territory amid rising interest rates and falling construction jobs in the resources and housing sectors? I doubt it.

 

These are all Brisbane projects. Enough to spur Brisbane? Likely yes.
Queensland as a whole? No

 

Would love to see Brisbane boom, but we as investors gotta remember that property investment is a long term game, I will be happy to wait for another 5-7 years for the massive spike to that we have been experiencing in Sydney and Melbourne, That means we will have time to accumulate more before it goes up. my first investment in Sydney didn't move at all for 6 years, and all the sadden, the value tripled in the last 3 years(Rossmore).
The price gain in both Sydney and Melbourne is a good thing for Brisbane investors, it will present the city in a very good value proposition for people to move, live and invest there. The massive price difference certainly put entice people who want to have a decent life style.

 

Correct. The other point, which I forgot to include in the poll was the Chinese and other emerging markets money. Sydney and Mel have it. Brisbane does not, but is slowly increasing as it's prominance grows.. But slowly... It will take at least 10 years (most likely 15 years or more ) I think to get a proportionately high BRICS bankroll in Brisbane as Sydney and Melbourne have now.

 

not many consider the possibility that Syd/Melb prices are in a bubble and could actually deflate down to Brisbane levels rather than Brisbane prices increasing to Syd/Melb bubble prices. Just like Perth prices which had boomed and bubbled and is now deflating back towards a lower more "normal" level.

If current migration trends continue, Syd/Melb are still going to be the major population growth centers, so it will be very hard for Brisbane to catch up.

Biggest factor I reckon would be jobs, without jobs, no one is gonna wanna migrate here.

QLD economy is still very commodity dependent and Brisbane as the capital, will follow the fates of coal/gas commodity prices, just like W.A./Perth economy follows iron ore prices. With the current underinvestment in other industries, it is very unlikely for brisbane to catch up or diversify into productive export industries like biotech/pharma/semiconductor/technology.

This is unlikely to change as the state gov is already struggling to pay its debts and will have to seriously cut back spending at some stage. The projected infrastructure spending can only provide limited support to a struggling economy. New investment in commodity sector is sorely needed in order for economy in QLD or Brisbane to improve.