Stories of cash flow properties in regional Queensland and outer-lying Brisbane areas have received a lot of attention in recent years. Yet they still don’t stack up to a carefully researched and selected property in an inner or middle-ring suburb of Brisbane, let me explain.
Throughout the years I’ve never budged on my opinion that metro properties are a much better long-term choice. In fact, while some property experts have shifted back and forth on their opinion, I’ve been telling my investors and journalists it’s metro all the way.
So why metro? It comes down to the stable population growth, employment and greater likelihood of infrastructure upgrades.
As property cycles rotate over time we often see a ripple effect from the capital cities outwards. So when times are good and the market starts to move we see this upward trend always begin in the inner and middle ring suburbs. In times of downturn the metro properties generally remain more sheltered than those further out, this comes back to jobs.
In Brisbane at the moment we are seeing a rising property market with limited supply and higher levels of demand than we have seen for some time.
Recently I was in a suburb out in the Ipswich council area about 40km west of the Brisbane CBD. We were conducting a vendor advocacy service, helping the client sell an underperforming asset.
When speaking to the selling agent I asked what the average time on market was, how the overall conditions were, who was buying and what are buyers paying? Here was the agent’s first response: “Average time on market is 2–3 months if it’s priced right.” This sent alarm bells ringing for me straight away.
The agent then proceeded to tell me that the market is: “Just starting, but it still pretty soft.” He said that 12 months ago he was getting one or none through his weekend open homes, now he says he would get between 3 and 5 people. It was then I realised this area was years behind Brisbane inner and middle-ring suburbs.
Based on my conclusion, this suburb could take years to start simmering like the Brisbane market currently is. And what makes things worse is that banks take even longer then the general public to pick up their confidence and value properties confidently, even more so in the outer areas.
So what this means is that, generally speaking, outer-area properties lag behind the properties located in the capital city inner and middle-ring suburbs.
Zoran Solano – Senior Buyers Agent