Brisbane, Australia's growth market in 2017

SEQ indicates leading property market for 2017

While Sydney still holds the current title for strongest year-on-year growth on CoreLogic’s Capital City Dwelling Index (October 31, 2016), Brisbane has overtaken both Sydney and Melbourne for growth in houses and units last month. Darwin bucked the trend to have the strongest growth across both dwelling types for the month, but the safe bet is on SEQ to surge ahead over the next year to be the strongest growing market in 2017.

While SEQ (Brisbane, the Gold and Sunshine Coasts) will see positive growth exceeding most other locations, growth is unlikely to become an official ‘boom’ as a number of economic factors continue to hold the region back from double-digit levels. The uncertainty about the local and global economy are holding many buyers back from committing. No one is really sure how Donald Trump’s rise to power will affect the world – and we may not know for some time. Although he has already softened his approach which indicates his campaign outbursts may have just been marketing strategies rather than policy promises. We can only hope.

Domestically, there is talk of a lower cash rate this coming year, but without banks passing on the full rate cut, this is having less effect on the housing market than hoped. The government’s tightening of the rules for foreign buyers is also holding markets back, although Brisbane is not subject to the same international spotlight as Sydney or Melbourne.

With all things considered, Brisbane is likely to be the best performing market over 2017 as Sydney tapers off rapidly and Melbourne slows down over the first half of the year. Strong population growth, particularly from overseas, as well as record infrastructure spending continue to push Melbourne’s property market forward albeit at a slower pace over the short term.

The oversupply of Brisbane’s unit market has been talked about ad nauseam for the past few months. However, it still managed to show 1% growth last month according to CoreLogic. Inner city apartment prices may be experiencing some softening but other areas are still performing well, particularly quality projects near transport infrastructure and amenities. The detached housing market is performing pretty well on a more broad level with 1.1% growth across Brisbane/Gold Coast markets last month. Quality estates close to transport and schools will do well, as will infill developments and renovation projects in good locations.

So why not treat yourself to one of our SEQ Regional Reports for Christmas? We can bet there will be nothing else in your stocking that will make you more money next year!

All the best for the Christmas holidays.

Until 2017, Josh Green

Geelong Library and Heritage Centre

Geelong, Ballarat – Coming through a successful transition

Melbourne has been on an upward trajectory longer than most, including myself, thought it would sustain. However, with closer inspection, Victoria as a whole has some strong fundamentals going for it.

We’ve recently begun work on a series of Victorian reports covering regions such as Geelong, Ballarat, Melbourne West, Melbourne North and Melbourne East among others and some interesting themes are at play here.

Ballarat Rail Line upgrade

The Ballarat Rail Line to Melbourne is about to undergo a duplication upgrade.

The State Government is spending $7 billion on transport infrastructure – that’s 3.4 billion more than last year. With five times the density of the rest of the country, Victoria is in a unique position. While Melbourne is voted Most Liveable City in the World for the sixth time in a row, the city struggles to maintain that status with such a growing demand on its infrastructure. The Liveable label has certainly fuelled recent population growth of staggering proportions; some 90,000 people move to Melbourne every year (it was 91,600 in 2014-15). Transport infrastructure is at breaking point and the State Government is taking serious action to maintain its highly-rated living standard by spending up big on infrastructure.

Some of the key projects in Melbourne with big ticket price tags include:

  • Western Distributor – $5.5 billion
  • Metro Tunnel – $10.9 billion
  • Port of Melbourne upgrades – $1.6 billion

But the city can’t handle all this growth on its own and luckily it doesn’t have to. The satellite regional centres of Geelong, Bendigo and Ballarat are instrumental in Victoria’s plans to manage growth over the long term. All three cities are receiving a reasonable share of the State’s funds to build infrastructure that will entice people to these regional centres with the promise of affordable housing and a high standard of living. Our recent report on Ballarat certainly illustrates how significant their role is in planning for growth. The forecast population growth for Ballarat supports the theory that the push to encourage people to these cities is working. Growth of 1.9%pa is forecast for the city just 120km to the west of Melbourne compared with 1.6%pa for the State.

Geelong is much the same. Both cities are in the process of transitioning away from car manufacturing as Ford Australia closes operations. But with proactive councils and help from the State and Federal Governments in the way of innovative manufacturing grants, both Ballarat and Geelong seem to be handling the transition better than expected. A good indication that Geelong in particular, is past the pain point is in its unemployment rate. From a high of 8.4% in 2015, the unemployment rate (5.5%) is now below the State’s (5.6%).

On the housing front, population growth remains strong in Geelong as well (2.01% in 2015) and parcels of land close to infrastructure and even the city CBDs are being released in both places in order to attract new residents with affordable living options in master-planned communities. Affordability is the key here. Land is much, much cheaper than in Melbourne. In fact, Ballarat is close to 1/3 of the median price for Melbourne. That’s a lot more house for your dollar. The question is, will it stay affordable? Ballarat and Geelong Councils both seem to have a pretty good handle on the supply of new housing stock, ensuring approvals keep closely in line with population growth. A constant release of new stock keeps price growth to a minimum of course, but both regions seem to be growing steadily and for the most part, the days of double digit growth are done. You could do worse than investing in Victoria’s satellite cities that will continue to grow strongly in size and clout.

Download a sample report on any of our regions throughout Victoria or Queensland.

University of the Sunshine Coast, Petrie Campus

Moreton Bay Region – A new train line opens

Our Moreton Bay Region update – transport infrastructure in overdrive

Our Brisbane North Regional Report was released the same week the new Redcliffe Peninsula Rail Line opened to the public. As transport infrastructure is rated as the number one driver of capital growth, the $1 billion rail project has opened up a host of opportunities in the Moreton Bay Region for investors.
Continue Reading →

Sunshine Coast University Hospital

The Sunshine Coast – an employment hotspot

Welcome to our latest blog. This one is the Sunshine Coast Regional Update.

In our latest edition of the Sunshine Coast Regional Report, we can’t help but show some enthusiasm for this corner in South East Queensland at the moment. For what seems like forever, the Sunshine Coast has played second fiddle to Brisbane and the Gold Coast which have outshone in both economic growth and infrastructure funding. But that is changing.
Continue Reading →