Feb
20

Focus on | 10 reasons to invest on the Gold Coast

KNIGHT FRANK

Find out why it is the right time to invest in this rapidly emerging city. 

 

High Ranking Liveability 

When measured against other cities around the world, Brisbane is placed well for liveability. In 2018, the Economist’s Intelligence Unit ranked Brisbane in 22nd position from 140 global cities based on stability, infrastructure, education, health care and environment. Mercer placed Brisbane in 37th position from 233 cities in their Quality of Life index. At the last Census, the ABS ranked Brisbane 53rd most advantaged local government area according to the relative socio-economic conditions of people and households.

Government Investment 

The Queensland domestic economy (GSP) is projected to strengthen to 2.8% in 2017-18, and accelerate to 3.0% in 2018-19, according to the Queensland State Budget. In the short term, this will reflect further improvement in domestic demand as business spending continues to pick up along with a recovery in coal exports following Severe Tropical Cyclone (STC) Debbie. Over the medium term, household consumption is expected to gain some momentum, and a contribution to growth from the trade sector, as imports ease.

Business Confidence Grows

Business confidence has rallied in Queensland, to sustain +8pts in August 2018, on the back of business conditions (+18pts) according to the NAB Monthly Business Survey. This improved confidence has flowed through to the labour market with the unemployment rate averaging 6.3% in the year ending August 2018, down from 6.4% the previous year.

On the Itinerary for International Visitors

International departure capacity at the Brisbane Airport expanded by 25% between 2012 and 2017 as reported by OAG Schedules Analyser. This is earmarked to grow further opening more routes to South-East Asia in the coming years and when the second runway opens in 2022. Each year since 2012, Tourism Australia has calculated international visitors to Brisbane has grown on average by 6.1%.

Growth in International Students

The number of international students enrolled to study in Queensland education facilities rose 11.2%, in 2017, according to the Department of Education and Training. Higher education facilities saw growth of 8.6%, while international school-aged students grew by 13.8%. Brisbane is fortunate to accommodate seven world-class university campuses and numerous private schools accepting international students. The SSVF has made the process of applying for a student visa in Australia easier to navigate for both students and guardians.

Relative Value to other Major Capital Cities 

Brisbane houses and apartments are relatively well-placed for value on the East Coast. The median value for an apartment in June 2018 was $379,000 in Brisbane, whilst Sydney was $737,000, and Melbourne $496,000 according to APM. This was similar for houses in Brisbane with the median value being $566,500; significantly lower than Sydney ($1.14m) and Melbourne ($882,000). Those now priced out of the these southern East Coast cities are looking for value in the Brisbane market.

Houses Capital Value Growth

The strongest annual capital growth across the four major capital cities was recorded for Brisbane houses at 2.0%, in June 2018 (APM). This is ahead of the national annual capital growth of –1.0%. Over the past ten years Brisbane houses have averaged capital growth at a sustainable 2.9% per year.

Lowered Vacancy as Less Apartments Being Built 

With less apartment projects starting construction, the Brisbane market is now absorbing the recently added rental stock. As a result, total vacancy has lowered to 2.3% at the end of June 2018, as reported by REIQ. In the medium term, as the population growth picks up and the economy strengthens, additional apartments will be required to meet the changing demand for low maintenance, high-density living. Growing the share of apartments in Brisbane to beyond the national average, will accommodate workers required to foster the new world city.

Wealth Flows 

Brisbane saw a net inflow of up to 1,000 HNWIs in 2017; taking up to one-tenth of the 10,000 new Australian HNWIs each year, according to data released on the Australian market by New World Wealth. This is someone with net worth of US$1 million, excluding their primary residence. Australia remains the top country ranked by HNWI net inflow for the third consecutive year.

Rise of Prime Property 

As the number of HNWIs rise, Brisbane prime property prices continue to strengthen growing 3.4% in the year ending June 2018. Knight Frank considers prime property to be the most desirable and most expensive property in a given location, generally defined as the top 5% of each market by value. Similar to Brisbane’s mainstream market, the value proposition for a prime property is relatively cheaper than other cities in Australia. In Brisbane, US$1m can buy 122 sqm of prime property in June 2018, while only 50 sqm can be purchased in Sydney and 94 sqm in Melbourne.

 

Source: 14 January 2019 – https://www.knightfrank.com.au/blog/2019/01/13/focus-on-10-reasons-to-invest-in-brisbane-

Leave a Reply