As Australia’s third-largest city, Brisbane offers a large and diverse market for the property investor.
Brisbane is one of the fastest-growing capital cities in Australia in terms of population and employment. With population growth widely considered to be one of the key contributors to property value growth in Australia, Brisbane is predicted to climb well over three million people by 2035.
To add to that, liveability, affordability, scale and future economic prospects all suggest that Brisbane is a market where you can confidently buy.
It’s true that Brisbane is likely to be the best performing property market over the next few years, however while some locations in Brisbane have strong growth potential, and the right properties in these locations will make great long term investments, certain submarkets should be avoided.
What Makes a Good Investment Property in Brisbane?
- Location – is the property located near to jobs, services, infrastructure and amenities? Is it a nice place to live?
- Property Type – is the property a flexible configuration that suits a wide range of buying and renting demographics? Does it suit the area it’s located in?
- Design – is the property desirable to live in? If not, can this be fixed at a reasonable price?
- Price – is the property priced below its intrinsic value? Can we achieve a meaningful discount?
There are hundreds of properties in many different markets of Brisbane that would make strong investment, but exactly where and what type will depend on your own personal financial situation and goals.
What Makes a Bad Investment Property in Brisbane?
- Buying the wrong property type – many investors will not understand what property types are best for Brisbane’s current and future housing needs. As a result, they will purchase a property that is poorly positioned to attract future asset price and rental growth.
- Buying in the wrong area – not all parts of Brisbane will deliver equal results. There are many suburbs in Brisbane that will suffer from oversupply of property relative to demand, which will prevent price growth and often force investors to sell at a price below what they paid for.
- Overpaying – unfortunately, many companies take advantage of the investor’s lack of Brisbane knowledge to sell properties that are not only the wrong types in the wrong areas, but are too expensive to boot. This is a lethal cocktail for investment returns, as it will take many years just to get back to your starting point.
While Brisbane has produced great returns for property investors over the long-term, many investors make basic mistakes which prevent them from enjoying these returns.
Tips to Buying an Investment Property in Brisbane?
Every Australian capital city has its ups and downs when it comes to property investment. But before you launch into investing in Brisbane it’s worth doing your research and seeking expert advice. We have put together three important points to guide you on your investment property journey. So all you need to do is pour yourself a cup of tea, sit back, and relax (well, as much as you can when house hunting).
- Stick to areas and properties with owner-occupier demand
- Look for suburbs in Brisbane where there is consistent owner-occupier demand. Check out the owner-occupier to renter ratio to find this out for each suburb. Buy the kinds of properties owner-occupiers want – detached houses, well-designed townhouses and bigger apartments in smaller locations – these grow in value faster and are price movements are less volatile
- Don’t steer too far from Brisbane’s median price
- The median house or unit price is there to tell you how where most of the sales transactions are occurring. If you go too far away from it, you’re increasing your risk of owning a property that not many people want (or can afford to buy). That’s when you can get into problems as a property investor.
- Avoid high-rise apartments, big townhouse complexes and new development areas
- There is ongoing issues of oversupply, too many investor owners (and therefore too many renters) and poor capital growth. You can do a lot better than that for your investment.
What to Consider when Investing in Brisbane?
1st: The presence of flood zones
Know that a big flood occurred in 1974 and another one happened again in 2011. Most of the houses were underwater and in a number of cases, were significantly underwater. It is inevitable that you must go and check the Brisbane City Council’s flood maps in case you’re eyeing a property. This is free of charge – so might as well establish the fact if a property has experienced under water recently.
So, 37 years apart, 1974 to 2011 – it pays to study and understand where these sample marks are so we can avoid this. But the thing is that you can really search and find some notable investment grade properties which are past the flood prone areas.
2nd: The type of Brisbane’s lifestyle
It’s definitely distinct – and very much relaxed or laid back! That’s Brisbane for you! You would have to realize what the locals’ wants or idiosyncrasies versus insisting your interstate mindset.
Let’s take for instance – a carport is totally okay in Brisbane but if you go to the cities of Sydney and Melbourne – you would desire locked-up garages. You will also need you have an air conditioner to endure the extreme heat, specifically for the summer months of December to February. There are lovely period homes which are scarce but everyone likes them. For Brisbane though, you would need to do a lot of maintenance for this due to the severe effects of the sun on the building materials used for construction. Thus, you really have to know the various quirks in this market. It will be best for you not to impose interstate standards as it’s not quite appropriate in an entirely different market like Brisbane.
3rd: Brisbane’s Main Drivers: proximity to the river and proximity to the city
They do not conform to that “traditional western suburbs vibe” because if you consider the Brisbane River running through the city, most of the best suburbs are on the western side of the river.
The thing is, you do not really go to Brisbane for a beach lifestyle. Brisbane is not all about the beach as what the usual first thought of going to Queensland is. Brisbane city has no beaches but Brisbane has North Stradbroke, Moreton Island and if you go a little further in the North, there is Bribie Island that actually breaks the surf coming in. The first swimming stop to go when you reach up north is Calloundra on the Sunshine Coast, while down south is the Gold Coast.
So consider this, when if you’re investing in Sydney –it’s about the beach culture or lifestyle. Conversely, this is not true for Brisbane. Most often, it’s all about the proximity to the major roads to get you to the Gold Coast or Sunshine Coast to indulge in such lifestyle options on weekends and holidays.
4tH: Welcome to the hills!
If you want to reflect on the climate they have at Brisbane, in particular the north portion– it is really on the hilly side so people there really embrace it. The reason: they like the breeze passing through to remove some of the harsh heat. In the cooler days, everybody adores this amazing outlook and outdoor lifestyle. Be cautious though that there are also residential locations which can have that westerly sun – which is a real concern on sweltering afternoons. If you happen to drive by Brisbane – particularly the western part, you will observe that they’re using mostly shutters in their windows for sun protection. Be extra wary if you have a property which has that westerly feature looking at water because every time sunset comes, the bounce off the water that goes directly to building can be really harsh and extreme.
5th: Presence of one big City Council
There’s just one big City Council in Greater Brisbane unlike in Perth, Melbourne and Sydney where there are a number of suburbs in one council and a few more in another council. There may be differences on what you can do for the suburbs in different councils because the councils usually have varying rules.
Generally, it is a real benefit in Brisbane because there is just one same set of policies. This means that it’s not as if you need to immensely follow different set of rules for each suburb — because there’s really just one council, you are allowed to do the same for all suburbs.
So if you’re a borderless investor and you would like to go into this specific market – whether you are in Hobart, Melbourne or perhaps in Perth or Adelaide, the questions to ask are: Where are the ‘cream of the crop’ locations for a Brisbane property? Which suburbs are the top-notch to invest in Brisbane? Is there a property below $500,000 in Brisbane that you can acquire with a rental yield of 5% and above? Where can we find these properties?
The good news is, we’ve already done those hard work for you. Within seconds, you’ll be able to identify which suburb in Brisbane you should buy a property based on your budget.
By just filtering and sorting, you’ll be able to identify which suburbs in Brisbane and the rest of Queensland
- Have a median price that will suit the amount you’re willing to invest, especially the suburbs with a median of $400k and below
- Have More than 4% Annual Capital Growth
- Have More than 5% Rental Yield
- Have Less than 3% Vacancy Rate
It is the most comprehensive investment location data of all suburbs in Australia – with linked state, suburb, postcode, average annual growth, median property value, median rent, gross rental yield, vacancy rate, population, gross weekly income, median monthly mortgage repayments and more. It’s perfect for property investors, buyer’s agent, real estate agents, property managers, mortgage brokers, valuers, and even property developers.
Once you’ve identified which suburbs in Brisbane are the best for investing a property don’t forget to do your due diligence and check if the numbers stack up.
Check out our All-in-One Investment Property Calculator
The most simple and easy to use tool to calculate Rental Yield. It gives you a quick way to compare returns on different investment properties (or investments). It’s a Rental Yield Calculator, Mortgage or Homeloan Calculator, Cashflow Calculator, Purchase Cost Calculator, and it also calculates the Forecasted Property Value by Capital Growth. It’s perfect for property investors, buyer’s agent, and real estate agents.