Brisbane - Affordable & Liveable Property Guide 1st Half 2019
Affordable Suburbs - Brisbane
Between 2017 and 2018/191 the number of houses sold in the Brisbane City Local Government Area (LGA) grew by 8.1%. During this time, the median house price remained stable, growing by 0.7% (to $675,000) and showing market resilience. The Brisbane LGA unit market has seen a sustainable level of price growth, with a median price of $450,000 in 2018/191.
key finding in this report was that we were able to find affordable and
liveable suburbs in different pockets of Brisbane, resulting in a good spread
geographically. This contrasts with the 2nd
Half 2018¥ report, where all identified affordable and liveable
house suburbs were concentrated on the northside.
Queensland (QLD) home loan affordability has continued to decline. The proportion of income to meet home loan repayments increased over the past 12 months to 28.1%3 in Q4 2018, and first home buyer loan activity decreased by -5.7%3. These figures suggest that QLD housing affordability has further declined, as over the past 12 months to Q4 2018 the number of first home buyers increased by 13.4%3.
Table 2 provides the percentage of suburbs in Brisbane that are available for house buyers across various price ranges.
Liveable Suburbs - Brisbane
The Brisbane property market is currently at its prime for first time home buyers, with the under $500,000 price bracket reaching a record high percentage of available suburbs, at 42.4%. This is extremely encouraging news for Brisbane first home buyers, as it signals a flip in the market from being a $500,000-$800,000 market, to an under $500,000 market.
There has been a dramatic decrease in the number of suburbs priced at $800,000-$1,000,000 and $1,000,000-$2,000,000, declining from 21.2% and 11.1% respectively in the 1st Half 2018µ report to 9.3% and 6.7% in the 1st Half 2019 report. This further confirms that the Brisbane market is becoming more affordable for property buyers, and that now is an ideal time to enter the market.
On the flip side, these price shifts may be concerning to owner occupiers and investors, as a key strategy is to hold property until the next property cycle upswing. Developers may also need to re-evaluate their strategies and product offerings to be able to deliver properties that match market expectations.
Affordable house suburbs (those with a maximum property sale price of the QLD average state loan plus a 75% premium, as per the 2nd Half 2018¥ report) exist. Examples include: Ferny Grove, Chermside West, Tingalpa, Ellen Grove, Bulimba, and Bardon.
Although affordable, these suburbs fail to meet the liveability criteria. To do so, an 81% premium needed to be added to the average QLD loan. Aspley and Geebung were identified as affordable and liveable house suburbs in the 2nd Half 2018¥ report, and recorded lower rental yields than Brisbane Metro, higher crime rates, and a lower estimated value of project developments. However, within only 6 months, these two suburbs no longer meet affordability criteria.
all methodology criteria (property trends, investment, affordability,
development, and liveability), Tables 3 and 4 identify key suburbs that
property watchers should lookout for.
Affordable & Liveable Suburbs - Brisbane
Over the past 12 months to Q4 2018, rental prices have remained stable4, confirming the Brisbane rental market as having a sustainable level of growth. Brisbane Metro’s vacancy rates continue to trend downwards, with interstate migration being the main driver. Vacancy rates were recorded at 2.3% in December 2018, well below the Real Estate Institute of Australia’s healthy benchmark of 3.0%. This suggests Brisbane is heading towards a healthy rental market and is no longer oversupplied. Brisbane Metro’s rental yields of 3.8% for houses and 5.2% for units were well above Sydney Metro’s 2.9% for houses and 3.8% for units, as well as Melbourne Metro’s 2.9% for houses and 3.9% for units.
Brisbane is set to invest approximately $4.4B into projects commencing in the 1st half of 2019, with mixed-use ($1.5B or 34.6%) and residential ($1.4B or 31.6%) accounting for the majority, which will create new property stock and commercial activity opportunities. West Village Mixed-Use Development ($800.0M) is the main mixed-use project, set to deliver 1,250 units, shops, restaurants, and child care. The main industrial project is the Dexus Industrial Estate Warehouse ($40.0M), while Air Services Australia is a key infrastructure project ($100.0M).
This affordable and liveable property guide for Brisbane analyses all suburbs in the Brisbane City Local Government Area (LGA), within a 20km radius of the Brisbane CBD. The following criteria were considered:
- Property trends criteria – all suburbs considered have a minimum of 20 transactions for statistical reliability purposes, with positive price growth between 2017 to 2018/191.
- Investment criteria – as of December 2018, all suburbs considered will have an on-par or higher rental yield than Brisbane Metro, and an on-par or lower vacancy rate.
- Affordability criteria – all identified suburbs required a median price below a set threshold. This was determined by adding percentage premiums to the QLD average home loan, which was $346,3834 as of Q4 2018. Premiums of 81% for houses and 17% for units were added, which were below those required to reach Brisbane Metro’s median prices (95% for houses and 30% for units). This places the suburbs below Brisbane’s median prices, meaning that the affordable and liveable suburbs identified within this report are more affordable for buyers.
- Development criteria – all suburbs reviewed have a high total estimated value of future project developments for the 1st half of 2019, as well as a higher proportion of commercial and infrastructure projects. This ensures suburbs chosen show signs of sustainable economic growth, which in turn has a positive effect on the property market.
- Liveability criteria – this included ensuring all suburbs assessed have low crime rates, availability of amenities within a 5km radius (i.e. schools, green spaces, public transport, shopping centres and health care facilities), and an unemployment rate on-par or lower in comparison to the state average (as determined by the Department of Jobs and Small Business, December Quarter 2018 release).