Residential property near Brisbane's Cross River Rail pinpointed as investor opportunity: John McGrath
The latest figures from the Australian Bureau of Statistics show the value of new loans to investors (excluding refinancing) across Australia jumped by 4.7% in July – the highest monthly gain since September 2016.
On the east side of the country, Canberra led the way with a 22% spike in the value of loans from June to July, followed by Queensland at 8.1%, Victoria at 5.7% and NSW at 2.0%.
John McGrath told Switzer readers, "My best piece of advice for property investors is to buy quality and focus on location and aspect."
"Go for a quality property in a great street, in a desirable neighbourhood, with plenty of amenities such as cafes, shops and public transport. These properties might cost a bit more, but you’ll get better capital gains."
"In terms of locations, I think a good strategy is buying close to new infrastructure. There is so much building going on and this is creating opportunities for investors to capitalise, especially in areas where prices have fallen during the downturn," he added.
He analysed the impact and reasons that investing near the Brisbane Cross River Rail which is starting at the end of 2019, with the aim of opening 2024, may have potential.
Impact: Stretching from Dutton Park to Bowen Hills, the 10.2km line will provide a second river crossing so more trains can run. It will include four new stations and revitalised precincts at Boggo Road, Woolloongabba, Albert Street and Roma Street, with upgrades to existing stations at Dutton Park, Exhibition, Salisbury, Rocklea, Moorooka, Yeerongpilly, Yeronga and Fairfield.
Opportunity: We tend to see a lift in property values when projects are announced, commenced and completed. Using Woolloongabba as a case study, the median house price sat around $770,000 from 2015 to 2018 but is now starting to grow. It’s $822,000 today, up 7.9% over FY19. The median apartment price has been drifting down since 2015 from $526,500 to $405,000 today.
Prediction: CoreLogic-Moody’s Analytics predicts 1.2% growth in house prices and 9.1% growth for apartments over CY20 and CY21 in Brisbane-South, which incorporates Woolloongabba, Fairfield, Dutton Park and Yeronga.
He also looked at the latest Melbourne, Canberra and Sydney infrastructure developments and the impact they have had and will continue to have.
JOHN MCGRATH is the Founder & Executive Director of McGrath