Investors see signs of revival in Brisbane
BRISBANE property investors face tricky questions such as whether to buy cheaper on city outskirts or go for capital gain closer to the centre
OPTIMISM is returning but property investors face tricky questions such as whether to buy cheaper on city outskirts or go for capital gain closer to the centre
Investors appear to be returning to the Brisbane property market, with agents and analysts reporting more are either buying or preparing to buy.
Deciding on whether to go for a quick weekly return in terms of coming out ahead when comparing monthly mortgage costs with monthly rents, or a good capital gain will determine where many buy, according to property investment consultant Ayda Shabanzadeh of Grow Consulting Group.
She says that, while on paper, suburbs 20km outside the central business district would appear a good investment as they can return more in rent than mortgage payments, over the long term they may be slow to achieve a significant capital growth.
She believes investors should buy within 5km of the Brisbane CBD, particularly in areas that are undergoing renewal.
Ms Shabanzadeh says there is scope in these areas for significant future capital gains and potential strong rental growth as these are the areas which will increase in population.
She says savvy property investors will make their investment choices with changing lifestyle trends in mind.
"Investors who have purchased apartments in inner-city suburbs will be excellently placed for capital growth opportunities, due to demand from tenants looking for homes to rent that are conveniently located to public transport, areas of employment and recreational opportunities.''
She lists suburb such as Bowen Hills, Kelvin Grove and South Brisbane in this category.
Affordable suburbs rate the highest on the list of areas where median rentals out perform median mortgage repayments.
Using median house price data, and working out monthly mortgage repayments over a 30-year loan against monthly rents, units in Goodna, west of Brisbane comes out top of the list.
According to data collated by The Courier-Mail of properties newly listed for sale this week and using the present median mortgage repayment and median rent payments, the top investment for a dwelling this week is a unit at Dearness St, Garbutt, in Townsville.
It would return a potential monthly profit of $260.76.
Units feature prominently on the list including one on the Bruce Highway Woree in Cairns, which would deliver a potential monthly profit of $180.76.
In Brisbane a one-bedroom house in Warry St, Fortitude Valley, comes out $171.47 ahead a month.
Of the top 24 newly listed properties in the state that would return a monthly profit, none are priced more than $250,000.
Using suburban median house and unit price data and median mortgage payments and rents, a unit bought in Goodna at the median unit price of $175,000 could return a profit to the owner of $184.22 a month if it achieved the median weekly rent for the area.
In terms of houses, North Booval in Ipswich appeared the best investment proposition with the potential to return a profit of $79.54 a month.
The top 10 locations for investing in units were all outside 20km of the Brisbane CBD, according to the data, while the top 10 for investment houses were a similar distance.
The other common denominator for the suburbs were that all their medians slotted into the affordable category.
None of the unit suburbs had a median price above $268,000 while on the house list none of the medians were above $282,000.
According to RP Data chief Anton Kardash, investors have been returning to the market in recent months.
He says during March, 4500 properties were bought by investors.
"The 10-year average is 5000 dwellings per month so this is also the strongest level of activity from investors since early 2010,'' he says.
April is historically a slow month for investors with those figures down to 3600 buyers during the month, but expectations are that, as usual, those figures will rise again when the May data is released.