Suzana Wade, Principal of Locate Property, presents the latest insights into Brisbane rental properties located within the greater Queensland market amid the ongoing housing crisis.
Recent data from property research group Proptrack has unveiled a staggering trend: rental properties in Queensland are capturing an overwhelming interest, with more than 120 inquiries per property on average. Notably, the top 10 properties attracting the highest number of inquiries, as reported on realestate.com, are all nestled within Brisbane.
Of these Brisbane rental properties, a residence situated in Bowen Hills, an inner-city suburb with a median rent of $520, garnered a notable 127 inquiries, showcasing the high demand in prime locations.
Interestingly, the fervor for properties extends beyond the city center, with suburbs like Loganlea, Richlands, Berrinba, and Doolandella each receiving over 100 inquiries for individual properties. Notably, both West Ipswich and Ellen Grove saw a considerable influx of around 120 inquiries per property.
The classification of inquiries encompassed engagements with real estate agents or interactions with the property advertisements, according to the data.
This surge in demand doesn’t come as a surprise to locals like Clayfield resident Shoshana Huppert, who faced numerous rejections for rental applications in the previous year. Huppert shared her experience of settling for a townhouse with friends due to prior rejections, highlighting issues with its maintenance and cleanliness.
Huppert discussed her ordeal and the difficulties she had finding suitable housing, stating that she had initially wanted to live independently but had to compromise because of cost. Eventually, she found a rental in Clayfield, opting to live with multiple roommates to navigate the competitive rental landscape.
Proptrack’s figures reinforce the tight vacancy rate in Brisbane, standing at a mere 0.86 percent. Senior economist Eleanor Creagh from Proptrack emphasized the persistence of these conditions, indicating an unlikelihood of immediate relief for renters in the foreseeable future. Creagh stressed the pressing need for an increase in rental property supply as a sustainable solution to the crisis.
Expanding the scope, CoreLogic’s data shed light on more affordable rental options within a 20-kilometer radius of Brisbane’s city center, showcasing areas like Ipswich, Logan, and Beaudesert with comparatively lower median rents for both houses and units.
Capitalizing on this trend, Eliza Owen, Head of Research at CoreLogic, highlighted the overall spike in capital city rents across Australia, attributing it to factors like limited stock availability and shifts in population movements between urban and regional areas. Owen pointed out the increasing attractiveness of previously overlooked suburbs, now experiencing heightened rental demand from professionals working or studying in city centers.
These statistics for Brisbane rental properties paint a vivid picture of the intensifying rental landscape, urging stakeholders to consider sustainable solutions to address the pressing housing challenges faced by renters across Queensland.
Suzana Wade of Locate Property is a local Brisbane property management expert who is on the ground in Brisbane, speaking to tenants every day. Her insight is invaluable when actually trying to ascertain investor sentiment and tenant feedback for Brisbane Properties, and right now is a bad time to be a tenant.
Property rents are increasing, and vacancy rates are at an all-time low. However, this should be an excellent time to be a property investor. However, why hasn’t this translated to more investors buying right now?
Tenant demand is robust, rental prices are rising, properties are in little danger of sitting empty, rental returns are strong, and it’s starting to shift to be a buyer’s market in many locations thanks to recent declines in purchasing prices.
However, investors have been noticeably absent from the festivities. According to Australian Bureau of Statistics data, the value of investor lending for homes in February was down 32.6% year over year. Overall, house lending was down 30.9%.
It’s crucial to emphasise that a lack of investors isn’t the only reason for our housing crisis; governments and a lack of development are also to blame (the number of dwelling approvals in February 2023 was down 31.1% from the previous year).
However, investor participation helps to alleviate the crisis.
The main obstacle, according to PropTrack economist Angus Moore, has been interest rates, which have crushed investors due to limited borrowing capacity and higher mortgage rates.
repayments just like everyone else. The Palaszczuk government’s new tenant legislation is a close second in terms of the reasons keeping investors out of the Brisbane property market.
Although prices have retracted by on average 5–10% over the last 18 or so months, investing in Brisbane Properties is unquestionably more expensive thanks to interest rates and hidden investment costs. “During the pandemic, we actually noticed more investors selling than buying,” Suzana said.
“Many people saw their overall wealth decline as a result of falling home prices.” “Also, given the low number of property listings and limited new homes to buy, there hasn’t been a large selection of investment property options for investors to purchase with an attractive price discount incentive.”
Investors for Brisbane properties have the opportunity to profit.
Experts believe the moment is now, with capital city vacancy rates still falling and rental prices rising as housing supply is limited and population growth is high.
According to PropTrack statistics, a vacancy rate of 3% is considered desirable as a market equilibrium between tenants and owners; however, capital cities recorded a rate of only 1.43% in March 2023, down 55% from March 2020 and 0.66% from March 2022.
Sydney and Melbourne experienced the most significant quarterly declines, while Brisbane, Perth, Adelaide, Hobart, the ACT, and the regions experienced modest rises.
According to the ABS, 303,700 people are predicted to move to our shores in the year ending June 30, 2022; a larger proportion of them than the average population is likely to seek rental accommodation.
Meanwhile, advertised rental prices on realestate.com.au rose 2% nationally in the first quarter of 2023 to a median of $500 per week, representing an 11.1% increase over the previous year and the fastest rate of rent growth since well before the pandemic.
“Given how tight rental markets are and how competitive they are, we’re seeing rents grow extremely quickly across the country.”
“The only long-term solution is more housing.” “And more investors are purchasing such homes.”
Investor demand is expected to rise.
According to Warren Hogan, an economic advisor with Judo Bank, the present rental problem would certainly encourage additional investors to enter the market.
“We know there will be a supply squeeze and that the population numbers are there.” Rents will continue to climb, as will rental yields; prices will not fall much further and will most likely begin to rise.
“This is an excellent time to enter the market for a long-term investment.”
Some investors appear to be in agreement.
Despite borrowing less, their share of all borrower-accepted loans is increasing.
According to the ABS, investors accounted for 33.7% of all transactions in February 2023, up from 24.2% in February 2021 and 27.3% in February 2020.
Locate Property’s Suzana Wade predicts that renting in Brisbane is about to get even harder with record rent increases over the next 12 months. According to recent PropTrack statistics, tenants across the nation have another challenging year ahead of them as rental costs rise. According to the data, rentals across the country have increased by 2 percent in the first quarter, to a median of $500 per week.
In the past year alone, rents have increased by 11%, which is the biggest annual increase seen since before the epidemic. Rents in the nation’s capital increased by 4% from the last quarter of 2022 to the March quarter, bringing the yearly increase to an astounding 13%. Meanwhile, rents in the region have climbed by 2.2% from the fourth quarter of 2017 to the first quarter of 2018 (an annual increase of 4.5%).
Particularly in Brisbane but also in Sydney, Adelaide, and Perth, rents are rising “at an extremely rapid pace,” as the paper emphasises. In fact, Perth rents increased by 9 percent in the most recent quarter. PropTrack’s analysts are sounding the alarm that rent increases are likely to persist due to the current tight rental market. Particularly true in nation’s capital, where rent hikes have remained steady since they first began to accelerate in early 2022. As the pandemic has progressed, rent rises have slowed in the regions.
Except for the Australian Capital Territory and remote South Australia, rental prices rose across the country in the March quarter. The Reserve Bank of Australia (RBA) has lately paused its long-running cycle of interest rate hikes, opting to maintain a cash rate of 3.6 percent instead of raising it. However, rising rental costs show little signs of slowing down. Therefore, renters everywhere will be hit even harder than usual this year.
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Suzana Wade, a Brisbane real estate expert and principal/licensee at Locate Property, has seen firsthand how rapidly the Brisbane landscape has changed, especially for first-home buyers looking to enter the market for the first time.
To help make the process easier, Suzana has now published her list of the top 10 suburbs that first home buyers should be looking into when making their decision on how to source an area that will allow them to enter the property market.
Brisbane is wide and diverse and Suzana’s greatest advice for first home buyers is be flexible, this isn’t your forever home, this is your first home.
About 40 kilometres west of Brisbane’s CBD is the developing suburb of Ripley. It’s the ideal combination of metropolitan conveniences and natural beauty, thanks to the abundance of parks, lakes, and hiking trails. Single-family homes in Ripley cost about $440,000 on average, while a unit will cost about $295,000 on average.
Ipswich, a historic suburb of Brisbane, is located 40 kilometres west of the city proper. It has easy access to major roads and public transportation, and it is home to both historical sites and modern amenities. Houses in Ipswich cost about $330,000 on average, while apartments cost about $235,000 on average.
Caboolture is a developing suburb 45 kilometres north of Brisbane’s central business district. An up-and-coming suburb of Brisbane, just a short drive from the Sunshine Coast’s idyllic beaches. The area is rural and charming, with plenty of parks, shops, and schools. The average apartment price in Caboolture will run you around $210,000, while a house will set you back around $325,000.
Just 35 kilometres north of Brisbane’s central business district, Burpengary is another promising suburb on the city’s periphery. There are plenty of parks, stores, and schools, and the area has a rural, quaint feel. 10 min Drive to Westfield, Costa & Ikea. The median house price in Burpengary is around $430,000, and the median unit price is around $290,000.
Approximately 20 kilometres east of Brisbane, along the coast between Wynnum and Manly, you’ll find the suburb of Lota. All the perks of a beachfront location, without the hefty price tag. Parks, cafes, and shops abound in this area, making it feel like both a suburb and a beach town. In Lota, an apartment will run you about $380,000, while a four-bedroom house will set you back around $660,000.
About 20 kilometres south of Brisbane, in a diverse and increasingly desirable suburb known as “Logan,” As the neighbourhood undergoes gentrification and becomes a more viable option for first-time homeowners, this is a great choice. It combines the conveniences of suburban life with the beauty of nature by providing access to numerous parks, lakes, and hiking trails. In Logan, a one-bedroom apartment will set you back about $255,000, while a four-bedroom house will set you back about $380,000.
Approximately 26 kilometres north of Brisbane, in the Moreton Bay Jurisdiction, the family-friendly suburb of Kippa Ring has been Brisbane’s top performer for many years. It’s got all the conveniences of a suburb and the allure of the coast, like good parks, stores, and institutions of higher learning. Kippa Ring has a median house price of $477,500 and a median Unit price of $360,000.
Approximately 30 kilometres south-west of Brisbane’s central business district, Redbank Plains is a developing suburb in the Ipswich Jurisdiction that borders Springfield Lakes. The Cross City Rail Project is important because it involves the extension of a rail line through the suburb and its eventual connection to the Brisbane Central Business District. Redbank Plains has a median house price of about $410,000 and a median unit price of about $290,000.
The family-friendly suburb of Narangba can be found about 26 kilometres north of Brisbane’s CBD. This suburb, which has already seen substantial growth, is on the cusp of seeing some massive school projects from the Catholic Church come to fruition, which will completely transform the area. There are plenty of parks, schools, and shopping centres, and the area has a rural, quaint feel. In Narangba, a median house price of $524,000 and a median unit price of $348,000 can be expected to be paid.
Located next to Springfield Lakes, the family-friendly suburb of Bellbird Park is often seen as a classier alternative to Redbank Plains, which appeared earlier on our list. It is only 22 kilometres south-west of Brisbane’s central business district, making it conveniently close to a major transportation hub. It’s got all the amenities of a typical suburban area, like parks, stores, and institutions of higher learning, and then some. Bellbird Park has a median house price of around $430,000 and a median Unit price of around $335,000.
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Suzana Wade, Principal of Locate Property says that the current batch of buyers is responding to interest rate hikes by purchasing Brisbane real estate at the lower end of the market.
There’s no denying that the increase in interest rates is working, but thus far it seems to be affecting only the higher end price range. As people consolidate or relocate to the properties that represent the best value on the market, the lower end of the spectrum has remained stable, and in certain circumstances a marginal increase in value has been witnessed.
It is now far more difficult for customers to be approved for high-end loans, and most lenders blame APRA for making banks more cautious than before. APRA has set the serviceability buffer at 3% for the time being.
Ms. Wade explains that rising interest rates have a knock-on effect in that “when the financing capability of a buyer declines, this will produce higher demand for residences at the lower end of the property market.”
The data show that, since the end of 2022, high-end housing prices have fallen 3.8% while low-end home prices have risen 12.8%.
According to data from CoreLogic’s national House Value Index, property values in Sydney and Brisbane fell the most among the nation’s capitals in September (HVI). Tim Lawless, director of research at CoreLogic, says it’s too soon to say the housing market has fully recovered from the recession.
Mr. Lawless speculated that the market had recovered from the “initial shock” of a rapid rise in interest rates and that borrowers and prospective homebuyers had already “priced in” more rate hikes. Nevertheless, if interest rates keep climbing as rapidly as they have since May, the rate at which property prices are falling could accelerate once more.
What does the near future hold for buyers? Ms. Wade claims that additional interest rate increases are possible in the near future, so buyers may not have much wiggle room for a while.
There will come a day when the market is unaffordable to first-time purchasers. As a result, there should be less upward pressure on prices at the lower end of the market. We don’t expect a major price decrease at the bottom of the market until then.
In order to make smart decisions in this market, first-time buyers need to know what they want and how flexible they can be with their offer.
If their demand is highly malleable, they can further navigate by weighing the cost-benefit of lesser borrowing power versus the purchase price.
Your borrowing power could decrease by 5% if interest rates were to rise in the future, but you’d still come out ahead if the median home price in the areas you’re interested in buying into dropped by 7% to 8%.
So to conclude, Brisbane Real Estate has been quite resilient. Owners with buffers that have budgeted well will remain relatively unaffected in the short to medium term, however, clients that took out mortgages in the high end or are coming off fixed interest rates later this year will continue to experience further pressures. Long story short, the competition remains feirce in the lower price point that are in blue chip suburbs or offer great rental yields.
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Suzana Wade, Principal of Locate Property has compiled a list of the best suburbs to buy in Brisbane for 2023. The list is broken down into two sections. Established versus emerging These are based on Suzana’s experiences as a Brisbane Property Management expert and someone who is regarded as Brisbane’s Best Property Manager or BDM
Best suburbs to buy in Brisbane “Established”
New Farm. With a median home price of $1.65 million, is a highly sought-after neighbourhood approximately 2 kilometres from Brisbane’s central business district. New Farm provides a cosmopolitan lifestyle and high rental yields. It is well known for its hip cafés, bars, and restaurants as well as for its lovely parks and river vistas.
Wilston. A lush, family-friendly neighbourhood with a median house price of $1.14 million, located only 5 kilometres north of Brisbane’s central business district. Wilston provides a high-quality lifestyle and robust rental income. It is well known for its superior schools, parks, and boutique shopping districts.
Wynnum Manly– A lovely bayside suburb with a median home price of $900,000. It is situated 15 kilometres east of Brisbane’s central business district. Wynnum Manly offers a laid-back coastal lifestyle and high rental yields. It is well-known for its breathtaking water views, parks, and beaches, as well as for its lively restaurant and cafe scene.
Bulimba – An upscale, trendy neighbourhood with a typical home price of $1.47 million, is situated 6 kilometres east of Brisbane’s central business district. Bulimba, which is well-known for its upscale commercial districts, riverside parks, and top-notch schools, provides a cosmopolitan lifestyle and high rental returns.
Camp Hill– A family-friendly neighbourhood with a median home price of $1.1 million and is situated 6 km south-east of Brisbane’s central business district. Camp Hill provides a comfortable lifestyle and high rental yields. It is well known for its top-notch schools, parks, and commercial districts as well as for its simple access to public transportation.
Narangba– A fast developing neighbourhood with a typical home price of $540,000, is situated 26 kilometres north of Brisbane’s central business district. Narangba, which is well-known for its top-notch schools, parks, and shopping areas, provides a family-friendly way of life and high rental returns.
Ripley- 39 kilometres south-west of Brisbane’s central business district lies Ripley, a master-planned neighbourhood with a median home price of $390,000. Ripley offers a laid-back lifestyle and high rental returns, and is well-known for its inexpensive housing alternatives, parks, and recreational facilities.
Ipswich, a historic city with a median home price of $350,000, lies 40 kilometres west of Brisbane’s central business district. Ipswich, which is well-known for its quaint heritage structures, green spaces, and cultural attractions, provides a distinctive way of life and high rental yields.
Redland Bay is a lovely bayside neighbourhood with a median house price of $590,000. It is situated 35 kilometres south-east of Brisbane’s central business district. Redland Bay, which is well-known for its breathtaking water views, parks, and beaches, provides a laid-back lifestyle and high rental yields.
Birkdale- A family friendly suburb 19 kilometres east of Brisbane’s central business district, has a median home price of $615,000. Birkdale, which is well-known for its top-notch schools, parks, and closeness to the lake, provides a high-quality lifestyle and good rental returns.
A notable mentioned just outside of the Brisbane jurisdiction is Pimpama. Pimpama in the past has had outrageous number of tenants competing for properties which is our view would be a great addition to the must buy suburbs list
Pimpama Just 45 minutes from Brisbane lies the northern Gold Coast community of Pimpama. In recent years, this area has grown quickly, adding new housing developments and infrastructure. Ms. Wade says Pimpama is a fantastic choice for investors searching for reasonably priced homes with good rental yields. In Pimpama, the median home price is around $515,000, and the rental return is roughly 5.7%.
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