Brisbane's growth will fundamentally change its residential market

Currently Brisbane ranks as Australia’s third largest city with a population of 2,143,121.

Over the next five years the city is expected to grow by 11.2%, attracting some 215,000 new residents. By comparison Sydney is expected to grow by 8.1% and Melbourne 10.4%, while Perth is looking to out perform all its rivals with a growth rate of 16.5%.

Brisbane has a close association with the Gold Coast/Tweed and in combination this adds a further 605,134 to the population base of almost 2.8 million in the south-east region. The area is also expecting to grow at a rate of 11.2% over the next five years, which adds to the economic muscle and growth potential of the region.

However regardless of the continued rivalry between our capital cities, Brisbane appears to have all of the settings in place for a period of sustained expansion and that growth is going to change the character of the local real estate market, in particular the apartment market.

To look more closely, let’s first establish a general appreciation of the market in order to gain an understanding of the appeal of new developments in Brisbane. A brief summary of the immediate past and the big picture planning for the future will help take a fuller account of how Brisbane is now being propelled into the future and why it’s an emerging and appealing apartment market.

After 1982 and 1988 There’s Been No Looking Back

The 1970s Queensland, and particularly Brisbane had a somewhat dual character much of which was influenced by the Joh Bjelke-Petersen era. To some Brisbane was seen as a quaint place, where people ate their tea at 5.30pm, post cards featured jacarandas and poinsettias lining the streets, there were charity raffles and pesky paper-boys at the main city intersections and lots of bingo halls.

The city’s underworld of the 1970s and the 1980s was as active as anywhere else in Australia, but the Whiskey Au Go Go inferno of 1973 marked a turning-point of history. Then after hosting the Commonwealth Games in 1982 and The World Expo in 1988 Brisbane never looked back, the theme of Expo 88 was “Leisure in the Age of Technology” and it does appear that today some 26 years after Expo, that slogan appears to be a great combination of ideas for a city like Brisbane to prosper under.

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Future Vision

Brisbane’s ascendancy is also being directly strengthened by events such as the Group of Twenty (G20) Leaders Summit, on the 15th and 16th of November, the summit is Brisbane’s biggest event since the 1982 Commonwealth Games and Expo 1988. The Queensland government has also announced a four pillars policy to foster economic development and employment across tourism, agriculture, resources and construction.

The state government is also putting it’s efforts into the delivery of critical infrastructure, and has commenced work to ensure local councils have the power they need to better plan for the future growth of local communities. Policy settings will also include plans to create simplified, single state planning arrangements. Already the state government will transfer responsibility for South Bank to the Brisbane City Council along with management of the Roma Street Parklands.

While the CBD continues to evolve as an apartment market, the inner north (Bowen Hills, Fortitude Valley, Hamilton, Kelvin Grove, Newstead, New Farm and Teneriffe) and inner south (Dutton Park, South Brisbane, West End and Woolloongabba), inner east (Bulimba and Kangaroo Point) and the inner west (Milton and Toowong) are all popular developments and very diverse suburbs with a good variety of lifestyle and product options, which are of key importance for a flourishing apartment marketplace.

Price Indicators and Beyond

In the March quarter 2014 the value of the average Australian home was $546,000, the average weighted growth between the March quarter 2013 – and the March quarter 2014 was 10.9%, Sydney’s growth was 15.7%, Melbourne’s 10.9% and Brisbane 6.1%.

While in the June quarter 2014, the average Sydney apartment price was $650,000, in Melbourne $502,000 and in Brisbane $476,000 – and while Brisbane has seen a somewhat lower growth rate, it’s been consistent for eight consecutive quarters. However, average prices are to a degree an all-purpose measure and like all other capital city markets Brisbane has measured price variations across different areas.

We also appreciate that prices are just one measure, these figures are only part of the story, because clearly buyers and developers also need to be sure that other aspects of the market like lifestyle, infrastructure (both hard and soft or cultural), affordability (growth and employment) and new stock are all aligned.

Looking at Brisbane we see a number of dynamics coming into play. The variety of product being developed is now diverse, different locations are also responding with varied product and that diversity is welcome with appeal to both owner-occupiers and investors, the vacancy rate is tightening, approvals are growing and the population is growing while new projects are showing strong sales results, and it is generally agreed that in combination all of the indicators are positive.

As we start to see the state government’s vision for tourism, agriculture, resources and construction take shape the appeal of the Brisbane market, in particular the apartment market, is positive.