Confidence in the state’s capital city residential market continues to strengthen with listing numbers up over the year to February and continued improvement in time on market and the level to which vendors have to discount from their initial list price.
According to local agents Brisbane’s relative affordability and rental returns compared to Sydney and Melbourne is likely going to mean an increase in investor activity moving forward.
The unit and townhouse market continues to strengthen in the outer suburbs with the landscape set to change in the face of new townhouse and low-rise unit developments. Investors are being attracted to such properties given the strong rental returns they are achieving. Local agents across the Greater Brisbane area say there are a good number of great buying opportunities for investors to have a positively geared investment, particularly with current interest rate levels.
The 2014 Brisbane City Plan, which identifies key growth corridors and centres, has infrastructure such as public transport and road upgrades flagged as paramount to the future growth of the state’s capital city.
Over the March quarter, sales activity across the Brisbane statistical division was down 5 per cent however this trend was not consistent across each of the council areas, with Ipswich bucking the trend with preliminary house sales numbers up 7 per cent compared to the December quarter.
Ipswich agents say the region is well-positioned for strong capital growth in the coming years as the south-east property market strengthens further. With the region tipped to be the fastest growing region in SEQ, local agents are very optimistic about the coming years for their area.
Over the March quarter, median house sale prices remained flat or eased somewhat on the back of an increase in buyer activity in the $350,000 to $500,000 price point. Over the year to March however all regions posted an increase in median house prices.
Taking all market indicators into consideration, Moreton Bay appears to be leading the way with the greatest improvement in average days on market over the year, now rivalling that of Ipswich at 71 days. Moreton Bay also now has the lowest rate of average vendor discounting coupled with the strongest increase in its median house sale price compared to a year ago, up 3.9 per cent.
Unit markets across Greater Brisbane continue to strengthen, with sales activity up across all council areas over the quarter. Demand for this segment of the market is further evident in all areas except Redland, recording double digit growth in preliminary sales numbers over the year to March 2015.
While the upper end of the market saw an increase in the $500,000-plus price point over the quarter, so too did the affordable end, seeing unit and townhouse sales in the sub-$250,000 bracket record the highest number of preliminary sales.
This trend was strongest in Logan, which as a result saw its median unit sale price drop 5 per cent. Sales were up in the likes of suburbs such as Browns Plains where investors are getting healthy rental returns with the suburb well-placed in close proximity to Greenbank Military Camp, Logan Central and major arterial roads.
Strengthening demand for townhouses was evident across a number of suburbs with Kallangur, Griffin and Petrie in Moreton Bay all recording an increase in activity. According to local agents in Redcliffe the new rail line is a major boost for the area and is reportedly 6 months ahead of schedule.
Affordability continues to be king for the Greater Brisbane area, with vacancy levels holding steady across most regions. Ipswich, Logan and Moreton Bay all remained relatively unchanged since December, while a softening in demand was seen in Redland City.
After spending all of 2014 at a vacancy level sub-two per cent, Redland City has returned to healthier levels of vacancy, while Moreton Bay holds the tightest vacancy rate with local agents reporting continued strong tenant demand.
In Logan, vacancy rates held relatively steady at 2.1 per cent, however local agents say tenant enquiry levels are beginning to soften. Investor interest in the area is also said to be picking up, which indicates further easing in vacancy levels potentially to come.
Meanwhile in Ipswich, local agents are also saying their rental markets are quietening down, coupled with investor activity in new residential estates.