Brisbane's tight rental market is experiencing record high rents and putting landlords in the driver's seat.
House prices have increased by a staggering 32 per cent in the past 12 months, but it is still one of the most affordable capital cities in Australia and one of the reasons why it is attracting masses of interstate investors.
Here is the latest insight into the Brisbane housing market and where we believe the opportunities are for investors right now.
Rents are at a record high
Brisbane’s median rents have increased to a record high of $500 a week, the highest annual increase in the city’s history. According to the latest Domain’s Rent Report the rents have increased by 14.9% or $65, in the 12 months to March 2022, and 4.2% for the quarter. This has been spurred on by low stock (Brisbane’s vacancy rate was at 0.7% in March 2002; SQM Research), delayed development and interstate migration, as well as the added pressure from the Feb/Mar flood events pushing more people into the rental market.
House price growth expected to continue
Brisbane’s house prices have increased by a staggering 32.1 per cent in the past 12 months (as at March 2022), with the median price now $856,731, according to Corelogic. Thanks to the relative affordability, continued demand and lack of supply, the prices are not expected to lose steam over the next year. The top 4 banks are forecasting house prices to jump between 5 to 10% during 2022. The 2032 Brisbane Olympics are expected to push prices higher in the next decade which will be supported by new infrastructure around the event as well as the recently confirmed $1.8 billion SEQ City Deal.
Opportunity for investors
According to Federal Government forecasts, Queensland’s population is expected to grow by more than a quarter of a million people in the next four years, thanks to internal and international migration. Overseas arrivals such as international students and long term migrants generally rent when they first arrive here so this will place more pressure on the already tight rental market. This perfect storm is creating opportunities for investors to get into the market now to reap benefits into the future.
The next property cycle (7-10 years) provides opportunity for prolonged capital market growth - particularly if demand keeps outstripping supply, backed by prospects of population and job growth, infrastructure investment, appealing lifestyle and affordability.
EKR Property is currently working with several interstate investors who find Brisbane relatively affordable and see the potential for long term capital growth. We are seeking opportunities for them in South East Queensland, in particular within the Brisbane LGA, near key employment and transport nodes in areas that are starting to regentrify.
Considering how competitive the market is, we are finding the most feasible option for investors right now is to buy an existing property, a post-war home on a 600sqm block or bigger, that can be rented now, with minor maintenance or improvements required, and a plan to redevelop later. The real growth lies in these areas undergoing regentrification with the potential to add more value in the future by redeveloping the property, or potentially selling it to an owner occupier who wants to build their own large family home with a back garden and space to add a pool.
Qualified property investment advisory
EKR Property is a property investment advisory (QPIA® certified) that assists first-time and seasoned investors in sourcing, negotiating and securing their next investment property and building a property portfolio.
We have an A grade team of professionals that we can put you in touch with and a network of property developers and builders nationally. We align ourselves with only the best providers who have been tried and tested to ensure your investment journey is memorable and hassle-free.