Within the Brisbane property market we have seen a mixed bag of results across our multifaceted marketplace.
In general, the Brisbane market has seen steady growth, and increasing interest from both Local home buyers and interstate investors, but this buyer demand has really focused in on key pockets of Brisbane and certain types of real estate.
In 2016 we witnessed a large drop off of buyers interested in the brand new Units and Apartments as negative publicity outlined an imminent oversupply of stock this has made many investors and also home buyers review their investment strategy to perhaps move away from that segment of the market place and consider other opportunities. I do believe the Brisbane unit and apartment market is being over supplied and in the next 12 months as we see development come to completion this oversupply will start to take effect. I Believe we will see Vacancy Rates of units and apartments slightly increase, and gross rental yields will slip as well, this issue will be compounded when investors reach the end of their “Rental Guarantees” which is one of the marketing tactics we have seen developers use to entice investors into a false sense of security around the unit and apartment market.
But where have we seen the more promise and potential in the market?
Well in 2016 we have seen some great growth within the established housing market, this activity is really focused within the 15km Ring around the Brisbane CBD, specifically in the northern and southern corridors. In the second half of the year we witnessed a softening of our rental market as Tenants become home buyers, and also tenants look to make a transition to higher density living due to affordability.
But not everyone in Brisbane wants to live in an apartment, the great Aussie dream of a backyard for the Slip and Slide, and a BBQ on the back balcony is still alive and strong. Although tenants’ expectations have increased, with several non-negotiable items needing to be in your property to ensure low vacancy and strong rental yields.
So what about my property predictions for 2017?
I think for many people “property wise” 2017 will mean one of two things, Firstly for those who might not have the borrowing capacity for another purchase, these people will look to reinvest back into their current portfolio to improve rental returns, and unlock equity. Whether it be undertaking a minor or major cosmetic renovation, I believe some investors who already have strong property holdings in the Brisbane market will look to improve the performance of their investments and lower LVR’s (Loan to Value Ratios) to position themselves for possible interest rate rises.
On the other hand, for those who find themselves sitting on the sideline of the property market or possibly really underutilizing their borrowing capacity. I believe these fence sitters should hit the market hard in the next 12 months to try and make up for lost time. Brisbane’s Established house market has really only seen the tip of the iceberg when it comes to growth in my opinion and we still have a lot of potential, and I believe 2017 will be the year that potential comes to the surface.