The media continues to raise alarm bells surrounding an impending housing bubble as prices in Sydney and Melbourne hit record highs.
A property bubble occurs when prices increase at a rapid rate, reach unsustainable levels and ultimately drop by a significant amount. But many buyers may not realise that the Brisbane market remains largely unaffected by what’s occurring in the southern states and housing here is significantly more affordable.
If you are thinking about buying in Brisbane but have been worried about the bubble, you shouldn’t be. Here’s an overview of the current property market and how it compares to the rest of the country.
Average house prices in Brisbane are competitive
Data from Domain shows that Brisbane houses sold for an average of $490,855 in 2015, compared with $1 million in Sydney and $660,000 in Melbourne. House prices in Sydney and Melbourne have increased by 48% and 32% respectively since the current property cycle commenced in mid-2012. Meanwhile, Brisbane house prices have only increased by approximately 14.2% in five years, which is a far more sustainable rate.
It is predicted that the market will grow by 3–4% in 2016. This is consistent with recent years and provides a stable environment for purchasing.
Brisbane still has a number of affordable suburbs
As new apartment buildings continue to pop up across inner-city suburbs, many are looking to the middle ring and outer suburbs for more affordable options. A recent PRD report outlined Brisbane’s most affordable hotspots: Runcorn, Keperra and Wynnum West. These are all located between nine and 19 kilometres from the CBD and the median price in these areas ranges from around $465,000 to $519,000.
The same report also identified Mount Gravatt East, Corinda and Cannon Hill as Brisbane’s most affordable suburbs for units. Prices here range from $415,000 up to $460,000.
Investors are taking notice
Experts are predicting that strong rental yields, record-low interest rates and value for money will see more interstate investors turning their attention to Brisbane. New infrastructure projects and the upcoming Gold Coast Commonwealth Games are also drawing attention. Units are performing particularly well in Brisbane, growing by 5.3% in 2015, which is well above the national average of 4.3%. However many are wary of a potential oversupply of apartments in the CBD.
Top tips for buying in Brisbane
- The best value is being found in the middle-ring and outer suburbs that are 6–20 km from the CBD.
- Be wary of the oversupply of inner-city apartments.
- If a particular area is experiencing high growth, consider looking at neighbouring suburbs where you may find more affordable options but still benefit from the area’s growth potential.
- The highest rental yields are occurring in the Logan and Ipswich areas.
- Inner-city suburbs like Woolowin, Ascot and Hamilton are also tipped to grow this year.
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