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Commercial Market Update – Brisbane Fringe Cityscope February 2020

Commercial Market Update - Brisbane Fringe Cityscope February 2020 (1)

The latest research from Brisbane Fringe Cityscope shows property sale numbers have remained steady but sales figures have increased in the past three months. The last three months to the beginning of February 2020 recorded 15 sales for a total of $216.5 million, with $194.7 million for commercial, $3.8 million for commercial strata, $6.5 million for retail, $100,000 for retail strata and $10.5 million for other.

In comparison, the last three months to the beginning of November 2019 recorded 17 sales for a total of $55.5 million, with $4.3 million for commercial, $3.7 million for commercial strata, $5 million for retail, $200,000 for retail strata and $42.4 million for other.

The 12 months leading up to early February 2020 recorded 70 sales for a total of $536.1 million, more than $693.2 million less than the same time last year.

The table below shows sales recorded for the past eight updates of Brisbane Fringe Cityscope:

Commercial Market Update - Brisbane Fringe Cityscope February 2020 (2)

Significant sales recorded this quarter total over $189 million, these sales include:

An 11-storey office building at 757 Ann Street, Fortitude Valley has been sold for around $94 million on an initial yield of 6.6%; settlement is expected in April 2020. The 9,422 sqm building includes ground floor retail space, nine levels of office space, a rooftop bar and car parking for 48 vehicles. The sale was negotiated by Mike Walsh and Peter Court of Cushman & Wakefield Brisbane. It last traded for $65.5 million in 2014.

19 Lang Parade, Milton, comprising two office buildings, has been sold off-market for $85.2 million to Nikos Property Group Pty Ltd. The site includes a two-storey building, known as Terrace Suites, which was was built prior to 1990 and sits behind a seven-storey commercial building which was built in 2009 and extended by one floor in 2011. Together the buildings have a gross floor area of 31,567 sqm. Mike Walsh and Peter Court of Cushman & Wakefield Brisbane negotiated the sale which represented an initial yield of 8.35% on a passing income of $7,114,200 (net).

Three warehouse/workshop buildings with frontages to Crombie Street, Cribb Street and McDougall Street were sold together for $10.5 million to Clare Cribb Pty Ltd. The three buildings are comprised of a two-level, 2,514 sqm building, a 565 sqm workshop/warehouse building to Crombie Street and a 723 sqm workshop/warehouse building to the corner of Cribb and Crombie Streets. Andrew Gard and Michael Nick Spiro of Cushman & Wakefield Brisbane negotiated the sale. The property last traded for just over $13.7 million in 2015.

Commercial Market Update - Brisbane Fringe Cityscope February 2020 (1)

Properties for sale include:

  • Vaya Place, 451 St Pauls Terrace, Fortitude Valley – a six-storey, 1,553 sqm office building with a ground floor cafe. For sale by offers to purchase; agent, Cushman & Wakefield Brisbane (Michael Gard and Andrew Gard).
  • 107 Warry Street, Fortitude Valley – a two-storey, 279 sqm building used commercially. For sale by expressions of interest; agent, Cushman & Wakefield Brisbane (Sam Callanan and Michael Gard).
  • 16 Julia Street, Fortitude Valley – a two-storey, 424 sqm office building with basement car parking for eight vehicles. For sale by expressions of interest; agent, Elders Commercial Brisbane (Clinton Mallan and Jordan George).
  • The Dorchester Inn, 484 Upper Edward Street, Spring Hill – a two-storey building with 12 self-contained units, laundry facilities and car parking for 10 vehicles. For sale by offers to purchase; agents, Ray White Commercial Brisbane (John Dwyer and Jason Hines) and HTL Property (Glenn Price).

Properties under contract (conditional or unconditional) include:

  • Humanity Place, 49 Park Road, Milton – a three-storey, 2,638 sqm office building with car parking for 57 vehicles. Under contract unconditionally with settlement expected May 2020; agents, Colliers International (Hunter Higgins, Nick Wedge and Guy Wells) and Knight Frank Brisbane (Blake Goddard and Christian Sandstrom).
  • Industry House, 375 Wickham Terrace and an adjoining car park at 21 Lilley Street, Spring Hill – a two-storey, 1,840 sqm office building and an adjoining paved car park. Under conditional contract; agent, JILL Brisbane (Sam Bryne, Tim Jones and Seb Turnbull).

 

 

This article is republished from www.corelogic.com.au under a Creative Commons license. Read the original article.

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Brisbane

Revealed: The 10 Brisbane suburbs in which to buy property in 2020

Revealed The 10 Brisbane suburbs in which to buy property in 2020 (7)

These are the 10 up-and-coming Brisbane suburbs tipped to pay dividends for property investors in 2020.

THEY are called the up-and-comers; suburbs that buyers may have turned their noses up at five years ago, but which now have the potential to boom.

Brisbane’s housing market is ripe for investment as cheap money, buyer confidence and a lack of supply drive demand for property.

Industry experts are saying now is the time to buy, so using their tips, The Courier-Mail has compiled a list of the 10 best suburbs in which to buy property in 2020.

The results are based on criteria such as infrastructure, public transport, dining precincts, buyer demand, school catchments, neighbouring suburbs, capital growth and affordability.

And so as not to ignite a turf war, the chosen Brisbane suburbs are a mix of north and south locations.

1. BRIDGEMAN DOWNS

Distance from CBD: 13km

Median house price: $785,000

Number of house sales in past 12 mths: 137

This under-the-radar suburb was once only considered for prestige, rural residential properties, but is evolving into a solid investor option, according to ASPIRE Property Advisor Network.

“Increasing rents, falling vacancies, a rising population and affordable property options

are the gold standard when it comes to selecting promising investment locations and

Bridgeman Downs ticks all those boxes,” ASPIRE managing director Richard Crabb said.

“Most long-term Brisbane residents probably wouldn’t think of Bridgeman Downs as

an investor enclave, because it is so tightly held at approximately 85 per cent or more

owner-occupied, but this is exactly why we have pegged it as a great investment

opportunity.”

Latest figures from SQM Research, a data company, show that the rental vacancy rate in Bridgeman Downs tightened from 4.5 per cent in November 2016 to 3.2 per cent in November 2019.

“A combination of rising rents and tightening vacancies is a key indicator of

investment income growth potential,” Mr Crabb said.

He said the suburb’s population had grown about 13 per cent over the past five years.

Revealed The 10 Brisbane suburbs in which to buy property in 2020 (12)

2. CARINA HEIGHTS

Distance from CBD: 8km

Median house price: $667,500

Number of house sales in past 12 mths: 60

Carina Heights set some records last year at the entry level price range, which has pushed

the average house price higher, to $667,500, according to Realestate.com.au — not bad for a suburb that once struggled to crack an average of $600,000.

“It’s the first-home buyers, the investors and, interestingly, the upsizers who have been attracted to this little pocket in the south,” independent buyer’s agent Wendy Russell said.

“Knock-downs and rebuilds are on the minds of home buyers who see value in Carina Heights now that an average house in neighbouring Camp Hill will set you back a whopping $220,000 more, at an average of price of $910,000.”

Ms Russell said she believed Carina Heights would continue to see the knock-on effects of being the next suburb over from blue-chip suburbs of Camp Hill and Norman Park.

Revealed The 10 Brisbane suburbs in which to buy property in 2020 (16)

3. EVERTON PARK

Distance from CBD: 9km

Median house price: $605,000

Number of sales: 110

If you haven’t checked out the newly opened ‘foodie laneway’ — Everton Plaza’s Park Lane, you’re missing out.

Described as the foodie epicentre for northsiders, Everton Park has hit the mark when it comes to attracting those who enjoy the café/foodie lifestyle, but don’t want to head into

the city to get it.

Ms Russell said lifestyle suburbs attracted home buyers and renters.

“Keep an eye on this little northside suburb because at an average house price of $605,000, it will undoubtedly attract the attention of investors and first-home buyers in 2020,” she said.

Revealed The 10 Brisbane suburbs in which to buy property in 2020 (11)

4. FERNY GROVE

Distance from CBD: 13km

Median house price: $620,000

Number of sales: 60

Ferny Grove has experienced a 23 per cent rise in views per home listing on Realestate.com.au, a property listings website, over the past quarter as buyers start to realise its potential.

Realestate.com.au chief economist Nerida Conisbee said the suburb was well catered for when it came to schools and parkland.

“It also has a train station, which is popular with buyers,” Ms Conisbee said.

“With a median of $620,000 it is a bit more affordable and is a price point that is appealing to investors.”

Revealed The 10 Brisbane suburbs in which to buy property in 2020 (10)

5. KEPERRA

Distance from CBD: 10km

Median house price: $550,000

Number of sales: 81

Keep following the train line northwest and buyers with a budget of $600,000 or less will find Keperra.

Ms Russell said the flow-on effect from the suburb’s neighbour, Mitchelton, should guarantee property prices in Keperra rise this year.

“Just 10km from the CBD and with the train at your doorstep, the suburb is certainly an affordable option for first-home buyers looking to enter the market,” she said.

Revealed The 10 Brisbane suburbs in which to buy property in 2020 (15)

6. LOGANHOLME

Distance from CBD: 29km

Median house price: $395,000

Number of sales: 95

In Greater Brisbane the suburb of Loganholme has experienced strong growth in its median house price in recent months, according to Real Estate Institute of Queensland (REIQ) southern Brisbane zone chair Rebecca Herbst.

“The attraction of Loganholme is its easy accessibility to the M1, whether you work in Brisbane’s CBD, or are heading to the Gold Coast on the weekend,” Ms Herbst said.

“Lifestyle is easy, the Logan Hyperdome is close by and the houses are affordable. It is easy to pick up a nice home for between $350,000 and $450,000.”

Other suburbs in Logan City that have experienced above average price growth and have further capital growth potential include Crestmead and Hillcrest.

“In Crestmead, affordability is the key,” Ms Herbst said. “Where else can you pick up a three-bedroom brick home for $250,000, only 30 minutes and 30km from the Brisbane CBD?”

Agent comparison site OpenAgent found Logan had some of the highest rental yields for houses, with Logan Central at 6.49 per cent.

Damian Piotto of Ray White Marsden said Logan was ideal for investors, particularly those from interstate.

“Entry-level housing is always appealing, especially to interstate investors when they compare local house prices — NSW in particular — and see significant value long-term,” Mr Piotto said.

“Rental returns are always going to be strong with the area located right in the middle of Brisbane and the Gold Coast, great public and private schooling, and the blue-collar industry within a 10 minute drive of these areas.”

Revealed The 10 Brisbane suburbs in which to buy property in 2020 (14)

7. MANSFIELD

Distance from CBD: 10km

Median house price: $685,000

Number of sales: 112

School catchments are all the rage in Brisbane and one of the most sought-after includes Mansfield.

Ranking number 2 in the 2019 Better Education Top 100 Public High Schools in

Brisbane, with a state overall score of 99, the Mansfield State High School catchment has become a hot spot for families.

Property Club president Kevin Young said homes in good school catchments could command an extra 10 per cent weekly rent, compared with suburbs outside the catchment area.

“The focus on property buyers moving forward is to identify new investment in schools that will boost demand for homes in the local area,” Mr Young said.

“With the start of a new school year, it is timely that property buyers in Queensland start to target areas where government is going to invest significant amounts of money in new educational facilities, which will boost the future demand for housing in these areas.”

Revealed The 10 Brisbane suburbs in which to buy property in 2020 (13)

8. OXLEY

Distance from CBD: 11km

Median house price: $572,500

Number of sales: 10

Let’s not forget Brisbane’s southwest, where one suburb to watch is Oxley.

A train ride from Oxley Station to Brisbane Central takes about 27 minutes and with an average house price of $572,500 it should be on the watch list for first-home buyers and investors.

“With neighbouring house prices up to $360,000 more (Corinda, $787,000, Sherwood, $932,500 and Graceville, $912,000), Oxley has the recipe for growth as an outlying

suburb on the train line with an affordable entry price for homebuyers,” Ms Russell said.

Revealed The 10 Brisbane suburbs in which to buy property in 2020 (9)

9. STAFFORD HEIGHTS

Distance from CBD: 8km

Median house price: $611,000

Number of sales: 115

Stafford Heights popped up on the radar of buyers in 2019 because of its affordability and accessibility.

“With an average house price of $611,000 it’s hard to pass up this suburb as an alternative to the more expensive neighbouring areas of Kedron and Gordon Park that had their day when the M6 Tunnel opened,” Ms Russell said.

She said the suburb’s proximity to Prince Charles Hospital and Westfield Chermside Shopping Centre made it appealing, along with the fact it was flood-prone.

“Stafford Heights could very well be in for continued growth in 2020 with so many ticks against it’s name — affordable, accessible and it doesn’t flood,” Ms Russell said.

Russell Duplock and Larissa Lawrence recently bought an investment property in the suburb through Ms Russell.

“We liked the general feel of Stafford Heights,” Mr Duplock said.

“There are a lot of young families in the area and a lot of property renovations happening too.”

Mr Duplock said the property was in a good school catchment and close to shops and restaurants, which he hoped would support capital growth.

“I feel Stafford Heights in the next couple of years is going to go well, considering it’s still affordable,” he said.

The couple also had no trouble leasing the property.

“We had four applications from the first open home and had it rented two days after, so plenty of interest,” Mr Duplock said.

Revealed The 10 Brisbane suburbs in which to buy property in 2020 (8)

10. WYNNUM

Distance from CBD: 14km

Median house price: $625,000

Number of sales: 204

The bayside suburb of Wynnum offers lifestyle, infrastructure and affordability.

InSynergy chief property investment advisor Richard Sheppard said investors should consider the middle and outer rings of Greater Brisbane for houses, because the boom had largely started in the inner-ring housing suburbs and was rippling its way out.

Mr Sheppard said Wynnum, and the neighbouring suburbs of Manly and Lota, had strong market fundamentals that would underpin property price performance in the years ahead.

“That’s because, not only are they in the middle to outer ring areas, they offer

lifestyle while also being close to new and expanding infrastructure like the airport

and port, as well as road upgrades that will improve access to the CBD,” he said.

Revealed The 10 Brisbane suburbs in which to buy property in 2020 (1)

 

 

This article is republished from www.news.com.au under a Creative Commons license. Read the original article.

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Brisbane

How is Brisbane’s unit market faring?

How is Brisbane’s unit market faring

While the Brisbane housing market remains in full swing, a senior researcher has questioned the value of units in the Queensland capital.

In a recent blog post, Eliza Owen, head of research at CoreLogic, discussed whether Brisbane units were still in oversupply.

“The narrative of oversupply and underperformance in Brisbane units has dominated conversations around south-east Queensland property for almost five years,” Ms Owen wrote.

“At January 2020, Brisbane unit values remain 11.5 per cent below their 2010 peak to be at similar levels to 2007. But the latest data on property values, construction and population growth suggest that the story is changing.”

Ms Owen said it is worth noting that oversupply is “very much a unit-centric story”, with houses across Brisbane posting strong capital growth in recent years, “except for a brief, cyclical downturn over part of 2019”.

“In the previous trough-to-trough cycle that lasted between 2012 and 2019, annual house value growth outperformed unit growth by an average of 290 basis points. This is larger than usual discrepancies and is above the series average difference of 130 basis points,” Ms Owen said.

“In other words, the past cycle saw units significantly ‘underperform’ relative to housing stock in Brisbane. The rolling annual growth figure shows that unit values have largely declined since July 2016.

“2016 was a time when units were being built across Brisbane at an unprecedented level. ABS completion data suggests 21,342 units were completed, against a historic average of 11,585 per year. In the December 2016 quarter, the number of unit completions even eclipsed the number of houses delivered across the state.”

Furthermore, Ms Owen noted both CoreLogic and ABS data shows there’s been a convergence between the number of dwellings required and supplied since the beginning of 2018.

“With approvals data suggesting a decline in construction, and steady estimates of population growth, Queensland dwellings may fall into undersupply in the year ahead. Rental yields are also well above the capital city average at 5.3 per cent gross, meaning there could also soon be a turning point in investor demand.

“However, one unknown in this analysis would be projects that have stalled due to falling unit values in the past few years. If these re-commence, added supply could once again weigh down growth.

“The turnaround in the supply-demand dynamic is already being seen in unit values. Since bottoming out in June 2019, CoreLogic indices show the Brisbane unit market has recovered 2.2 per cent. This fits in with a more broad-based recovery, as reductions in the cash rate have reduced the cost of servicing debt, and increased incentive to purchase property,” Ms Owen concluded.

 

 

This article is republished from www.smartpropertyinvestment.com.au under a Creative Commons license. Read the original article.

 

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Brisbane

Are Brisbane Units Still Oversupplied?

Are Brisbane Units Still Oversupplied (1)

The narrative of oversupply and under-performance in Brisbane units has dominated conversations around south-east Queensland property for almost 5 years.

At January 2020, Brisbane unit values remain 11.5 per cent below their 2010 peak to be at similar levels to 2007. But the latest data on property values, construction and population growth suggest that the story is changing.

It is worth noting that oversupply is very much a unit-centric story. Houses across Brisbane have actually seen quite strong capital growth returns in the past few years, except for a brief, cyclical downturn over part of 2019.

In the previous trough-to-trough cycle that lasted between 2012 and 2019, annual house value growth outperformed unit growth by an average of 290 basis points.

This is larger than usual discrepancies, and is above the series average difference of 130 basis points.

In other words, the past cycle saw units significantly “under-perform” relative to housing stock in Brisbane. The rolling annual growth figure shows that unit values have largely declined since July 2016.

Are Brisbane Units Still Oversupplied (2)

In 2016 units were being built across Brisbane at an unprecedented level. Australian Bureau of Statistics completion data suggests 21,342 units were completed, against a historic average of 11,585 per year.

In the December 2016 quarter, the number of unit completions even eclipsed the number of houses delivered across the state.

It is difficult to understand the exact impact this supply has on the Brisbane unit market, given that ABS completions data is currently unavailable beyond a state level on a quarterly basis.

However, cross-referencing the approvals dataset with the ABS data by region series, suggests about 75 per cent of state-wide unit construction was centred within the greater Brisbane metropolitan region.

The time series suggests that the lag between approvals and completions varies from about 1 to 2 years.

Since 2015, unit approvals have been moderating in response to subdued capital growth performance. The latest quarter of data shows approvals are 46 per cent below the decade average of approvals.

This means the delivery of new units across Queensland is likely to be subdued over 2020.

Corelogic project data suggests unit completions across Brisbane over 2020 will average about 4,000 per quarter, reflecting the long-term average.

But supply is only one side of the story. Looking at how population growth has tracked relative to unit completions brings further clarity to value declines in units over 2016.

The figure below shows “housing demand” relative to completions across Queensland. Housing demand represents the number of dwellings needed to accommodate additions to population at each quarter, divided by household density of 2.6. The housing demand is presented as a rolling annual average.

Future housing demand is also estimated based on the Queensland government “median” scenario of population projections, suggesting about 8,000 dwellings are required to house the growing population each quarter to June 2021.

Are Brisbane Units Still Oversupplied (3)

There has been a convergence between the number of dwellings required and supplied since the start of 2018.

With approvals data suggesting a decline in construction, and steady estimates of population growth, Queensland dwellings may fall into undersupply in the year ahead.

Rental yields are also well above the capital city average at 5.3 per cent gross, meaning there could also soon be a turning point in investor demand.

However, one unknown in this analysis would be projects that have stalled due to falling unit values in the past few years. If these re-commence, added supply could once again weigh down growth.

The turnaround in the supply-demand dynamic is already being seen in unit values. Since bottoming out in June 2019, Corelogic indices show the Brisbane unit market has recovered 2.2 per cent.

This fits in with a more broad-based recovery, as reductions in the cash rate have reduced the cost of servicing debt, and increased incentive to purchase property.

 

 

This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.

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