Revealed: Brisbane’s top 30 suburbs for property investors
Brisbane has emerged as one of the best Australian capital cities to get rich in with new data revealing a massive list of 30 suburbs that tick every box for property investors as demand hits hyper-drive.
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The Courier-Mail in partnership with realestate.com.au today launches Make Your Move, a data-based guide to property investing. Today we reveal at the top 30 performing Brisbane suburbs for capital gains, rental yields and rental demand. Tomorrow we cover the best performing regional areas. For more stories plus tips for beginner investors go to couriermail.com.au.
Brisbane has emerged as one of the best Australian capital cities to get rich in with new data revealing a massive list of 30 suburbs that tick every box for property investors as demand hits hyper-drive.
Spurred on by record low interest rates, surging home values, historically tight vacancy rates and major plans in the pipeline, the Queensland capital is no longer just an affordable option but one that makes investment sense, according to experts.
New analysis by realestate.com.au picked out the top 30 investor suburbs in Greater Brisbane that hit highs for key things that investors want – 10 year median price growth, rental yield and annual change in rental demand – with some surprise exclusions and inclusions.
Two-thirds of the top 30 list were made up of suburbs where houses were hitting highs for all three investor metrics, with median prices rising as much as 54.9 per cent (Arana Hills), rental yield as high as 5.3 per cent (Silkstone), and rental demand up as much as 27.2 per cent (Bongaree).
Suburbs with lower-income demographics are now investor dreams for house purchases such as Deception Bay which joined the top 30 alongside Bracken Ridge, Clontarf, Kippa-Ring, Arana Hills, Algester, Alexandra Hills, Cleveland, Redland Bay, Mount Cotton, Wynnum West, Springfield, Bellbird Park, Silkstone, Warner, Strathpine, Bray Park, Murrumba Downs, Bongaree, Banksia Beach and Mango Hill.
Suburbs that stood out for unit returns saw median prices rise as much as 6.2 per cent in the past decade (Kangaroo Point), though rental yield was as high as 6 per cent (Calamvale), and annual rental demand up by as much as 17.1 per cent (Kallangur).
Back in the investor spotlight after taking hits during Brisbane’s apartment building boom five years ago are the inner city suburbs of Spring Hill, Fortitude Valley, South Brisbane and Kangaroo Point, while those close to transport hubs were also ticking the right boxes such as Nundah and Chermside, alongside suburban Everton Park, Calamvale and Kallangur.
Some star Brisbane performers were left off the list because while they topped one category, they did not cut across all three, such as New Farm which had Brisbane’s highest median price growth in 10 years – almost doubling in price with a 96.4 per cent rise. Likewise, the highest rental yield came out of Laidley at 6.5 per cent, while Taigum in Brisbane’s northside roared in with the biggest annual rise in rental demand off a massive 50 per cent surge.
Interstate buyers were among the biggest drivers of demand, with Dilleen Property buyers agency founder and prolific investor Eddie Dilleen, 29, among those who’ve bought the most during the post Covid-19 period, with 14 of his 32 properties located within half an hour of the Brisbane CBD.
“I’m planning to buy at least another $5m worth of property in Brisbane over the next six to 12 months” Mr Dilleen said, much of which was being propelled off equity gains on his list of properties which had accelerated post Covid-19.
“I have been able to restructure finances since I bought so many smaller ones that are all worth a lot more now. I bought one in Marsden at auction for $309,000 last year and 12 months later it’s valued at $550,000. I bought during peak Covid and I knew it was worth $400,000 at the time and they were desperate to sell. The market’s returned since then and it’s a 1,000sq m block, those kinds of properties are worth a lot. I’m buying (another) one now in Yamanto, a 2,500sq m block so about half an acre for $450,000. I’m also working on one in Stafford Heights on the northside in an off market deal worth $900,000.”
He said as an investor Brisbane’s affordability, good rental returns and room to grow were its biggest pulls.
“Affordability, it’s the third largest capital city but has areas within 30 minutes of Brisbane that are even lower priced than regional areas. Good rental returns, it’s very easy to find yields between 5 to 9 per cent for residential property within a metro Brisbane location. It has room to grow further with low interest rates and shortage of housing. Compared to the other major capital cities, Brisbane’s rental returns are almost double.”
His buyers agency was also going gangbusters for its clients. “I’ve seen a huge rise of investors from New South Wales, Victoria and South Australia buying in Queensland sight unseen. The agency has definitely seen a huge rise in buyers wanting to buy in Brisbane, houses, duplex, townhouses and units ranging from $200,000 to $900,000.”
PRD Nationwide research director Dr Diaswati Mardiasmo said Brisbane had always been a “safe choice” for investment with its steady increase in median house price without major fluctuation (except GFC), its rental returns and capital growth.
“Right now, we know that Brisbane has been won the Olympics 2032. Based on median house price growth patterns over the past 46 years, experience throughout COVID-19, and projected prices with lessons from Expo 1988, G20 Summit, and Sydney Olympics 2000; there is a potential for immense growth in the next 11 years,” she said.
“Not only that, we know Brisbane’s vacancy rates have been declining since peak COVID-19, our vacancy rate is below Sydney and Melbourne; so we have a tighter rental market. All together this brings an attractive package for investors to enter the market.”
Brisbane vacancy rates hit an 11-year historic low of 1.3 per cent in June, and remained under the REIA’s healthy benchmark of 3 per cent, she said – except for a two-year period during its apartment building boom (July 2016-July 2018) which had since been soaked up.
“The continuously declining vacancy rate and historical low figures for Brisbane suggest there is room for investors to enter the market, to provide supply. Overall – the combination of Brisbane’s rental market (that is 0.5 above on extremely low vacancy rates) and projected prices due to winning Olympics 2032 suggest that now is the time for investors to re-enter the market. Both from a rental returns perspective and also potential capital / investment growth for the future.”
Peter Koulizos, chair of Property Investment Professionals of Australia, cautioned investors to seek advice from licensed specialists and stick to fundamentals with the right type of property in the right suburb.
“High rental yield is good but don’t sacrifice this for capital growth.”
“Ideally you want to be buying houses as they have some land component, which is what drives capital growth.”
“If your budget only allows for units, buy in a small group where the body corporate fees won’t be significant,” Mr Koulizos said.
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