The Performance Property Advisory (PPA), who are property investment specialists, has conducted a property investor market update and as per the update, Brisbane ranked as number 1 residential investment location.
The update is conducted 4 times per year. Property investment marketing conditions in Brisbane, Sydney, Melbourne and Adelaide are examined using research from the ABS, Real Estate Institute, SQM Research, RP Data, Pricefinder, Residex and statistics from multiple government agency websites. Perth has not been added to this list as there is no available PPA in that location.
The key indicators that were used in the detailed and accurate insights into these cities and their sub-markets are; rental growth, price growth, affordability, housing vacancy rates, population growth, employment, supply of housing, income growth, size of population, infrastructure spending and availability of stock.
The PPA calculates a yield figure which is based on the company purchases that have been made for their clients in each of the capital city markets. The sample size across all four capital cities came to 300 properties. The yield figure for Sydney is 2.6 per cent, Melbourne is 2.8 per cent, Adelaide is 3.8 per cent and Brisbane is 4 per cent.
With Brisbane’s outer metro area slightly over-valued and over-supplied it has become increasingly off limits. While not investing in the apartments in the CBD and on the city fringe is suggested as the market is transitioning from neutral to over-supply. The suburbs that are choice investment prospects are Stafford, Kedron, Nundah, Mitchelton, Camp Hill and Morningside which are in the city’s middle ring.
Brisbane’s residential population has grown from 1.7 to 2.1 million people over the past decade or so with a prediction of a further 820 000 over the next 2 decades. From 2008-2015 housing prices have increased by 15 per cent while income has grown by 31 per cent.
Ongoing population growth, low levels of unemployment and a continued undersupply of housing put Brisbane’s affordability index at 27 per cent. This makes Brisbane one of Australia’s most affordable cities to live in.
PPA’s Director of Acquisitions, David McMillan said; “With the fact that the infrastructure spend is up $1.07 billion on 2015 and you have a very positive story for Brisbane.”.