Where to Invest or Buy Investment Property in Brisbane?
Many of you who might be new to property investment hear all the expert reviews and opinion columns from property journalists that Brisbane is the place to invest. This is not a recent phenomenon. Around 2013, ever since Sydney and Melbourne started to rise, the natural response was that Brisbane would follow. And while, yes, Brisbane has gone up since 2013, it has not done so to the extent that Melbourne and Sydney have.
This means that while you would have probably achieved 10% – 15% growth over the last five years had you bought in Brisbane, you might have achieved up to 60%- 70% growth in other parts of Australia.
But where will Brisbane shine in the near term? What are the best suburbs to invest in Brisbane 2021?
First, it’s important to note that the ‘where’ you buy is more important than the ‘what’ you buy in property investing. 70% to 80% of the capital growth or positive cash flow is determined by where you buy. That’s where money is made or lost.
But the question remains: what are the best suburbs to invest in Brisbane?
To answer this, it is essential to look at the recent trends of investment property in Brisbane. The Logan City Council, Moreton Bay City Council, and Ipswich City Council regions (the south, north and west respectively of Brisbane City Council) have been where most investors have bought over the last 5 to 7 years.
This was where the positive cash flow opportunities were happening, and you could get 5%, 6%, sometimes 7% fairly easily. Many property marketeers and buyer agents will sell you on western areas, such as Ipswich, touting it as the next Parramatta.
But many of these agents and marketeers have a volume agender, needing to fulfil the client’s needs in these areas. But the problem is that those properties have almost experienced no growth. The data is not bad for these areas, but it isn’t great yet either.
The growth that will happen over the next 3 years in Brisbane will not necessarily be in these lower socioeconomic areas. For various reasons, whether it be their demand-supply ratio or balance (30 to 35 factors need to be considered!), these areas are not quite primed for growth.
When asking where to buy investment property in Brisbane, it’s important to remember that there are select pockets of Brisbane that will do well and other areas that won’t do well. The places where the data lines up are areas in the middle ring on the northwest of Brisbane and the southeast.
We’re talking around 10 kilometres from the CBD (despite proximity to the CBD having no statistical correlation with a capital price increase on a percentage basis). For various reasons, most suburbs in the next 2 to 3 years won’t do that well in Brisbane.
However, some select suburbs in the southeast, very close to Coorparoo and around the Hills district, will do very well. But these suburbs aren’t positive cash flow territory. These areas aren’t for investors who want $3,000 – $4,000 in their pocket every year from a cash flow perspective.
These areas are for those who would prefer $50,000 to $100 000 of capital growth in the next 12 to 18 months, rather than a positive cash flow property that provides $3,000 to $4,000 per annum. And there’s no right or wrong approach here.
Everyone’s strategy is different. But if you can afford it, if your long-term portfolio strategy and the lending environment you need allow you to buy around the $550,000 to $650,000 mark, these suburbs will go up in the next 2 to 3 years in Brisbane. And while the list of best suburbs to invest in Brisbane 2021 is limited, the opportunity is certainly there!
So, while Brisbane will do well, there will be a significant standard deviation between good and bad suburbs. It will be different to what occurred in Sydney and Melbourne 4-5 years ago, where everything went up. Rather, the list of suburbs to invest in Brisbane will be minimal because the underlying economy is not booming, as was the case in Sydney and Melbourne.
And of course, there are other opportunities across Australia for different strategies—strategies that need positive cash flow and growth.
But if you are sure about investment property in Brisbane, and if you want to buy a strategic asset that will grow (maybe with some potential for renovation, subdivision, or splitting)