After falling behind Sydney, Perth, Melbourne and Darwin in house price growth in 2013 I have no doubt Brisbane will lead in terms of capital growth in 2014. Brisbane has been held back due to a few factors including the national downturn that hit after 2010, the devastating floods in 2011 and major job and spending reductions by the recently elected Newman government.
The market in Sydney and Melbourne will begin to slow down from rising unemployment and lower wage growth, according to the forecasts of two of Australia’s prominent housing economists.
Brisbane has all the right factors in place to suggest some very strong capital growth in 2014 and beyond. One major factor Brisbane real estate has going for it is its affordability, with the median house price at an affordable $445,000 compared to Sydney which currently sits in the low 700’s.
Combine affordability with strong rental yields, low vacancy rates, very low interest rates, major infrastructure investment and strong population growth and you have the right ingredients for solid capital growth.
There are currently 41 major infrastructure projects, worth $38.770 billion, underway or committed across Brisbane City. The majority of this ($29.442 billion) is located across inner Brisbane. Major infrastructure developments result in employment generation therefore increasing the demand for residential property.
Overall, Brisbane is set to become a key performer of the Australian property market during 2014 as investors take advantage of strong rental yields and the potential of strong capital growth. Some areas will obviously outperform others and investors should do the required homework in seeking the right area to invest. I am tipping capital growth of 5 – 7% in Brisbane with some outer suburbs achieving 10%+. Kelvin Grove, Toowong, Ashgrove, Indooroopilly and the western corridor are some of my favourites I am tipping to do well in 2014 and beyond.
David Chehade Founder and Managing Director of Real Estate Investment Finance is an active and passionate property investor who loves sharing his knowledge and helping others attain the dream of owning property and building wealth. Graduating in 2008 with a bachelor of commerce in Finance, Financial Planning and Accounting David continued his financial studies with a diploma in Financial Services specialising in Mortgage Broking. With an office in Brisbane and the Sunshine Coast he works with clients across South East Queensland and also work remotely with clients Australia wide. The benefits of working with a specialised property investment mortgage broker are endless as we pride ourselves on keeping up to date with the Australian property market and the wide range of suitable finance products available on the market.
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