Property Market News: Brisbane unit market set for investor growth

By the resi financial blog team, 30 January 2014

Brisbane units good for investment

Property investment has always been a great way of supplementing your income and accumulating wealth. Building a wide, expansive property portfolio is a great way to aid your investment successes.

For example, now could be the perfect time to consider investing in Brisbane apartments. According to the latest Inner Brisbane Apartments 2013 to 2020 report released by BIS Shrapnel, the next two years are expected to see great growth in unit values across the Queensland capital city.

Angie Zigomanis, senior project manager at BIS Shrapnel and the author of the report, said the inner brisbane apartment market is becoming increasingly attractive to investors for a number of reasons.

The current circumstances are aligning to provide a fantastic opening for investors to add Brisbane apartments to their property portfolios - low vacancy rates, lower interest rates, attractive yields and an overall strengthening Brisbane residential market have all contributed to these positive trends.

"Initial yields in many new apartment projects in Brisbane have been above five per cent for some time now," said Mr Zigomanis in a January 30 statement.

"However, with many expecting that the Brisbane market has now bottomed out and the risk of further price declines is dissipating, the impetus to enter the market has increased."

This could be a great chance for those interested in expanding their property portfolios to investigate the market and make some wise, informed decisions about the potential of investment in the Sunshine State.

It isn't only local investors that are getting interested. The report highlights an increasing number of interstate investors looking for a market to move into, with a wide variety of different circumstances encouraging them to look outside their home states.

"In previous market upturns, interstate investors have accounted for up to 40 per cent of off-the-plan sales in inner Brisbane," said Mr Zigomanis.

"In particular, buyers from New South Wales are likely to find the value proposition for apartments in Brisbane more attractive compared to prices of apartments in inner Sydney after the recent rises that have occurred there."

This growing strength is enough to underpin the overall development of the market heading into the future, especially with the expected population boom on the horizon.

With a number of new residents looking for accommodation in the state's metropolitan hub, securing investment apartments could be a great way to generate wealth in the near future.

The current market indicators show an average completion rate for off the plan apartments of 2,700 per annum over the next three years. This is significantly higher than the previous peak of 2,250 per year back in 2005/06.

"This level of completions is likely to result in excess supply pressures emerging in the inner Brisbane market by 2015/16," said Mr Zigomanis.

"Together with the likelihood of interest rate policy being well into a tightening phase by this point, this will signal the peak of the market and the window for developers will begin to close."

Categories: Home Loans, Property Investment