The latest from the Brisbane property market

Predicting the property market can seem a bit like predicting stock trends — banking on the future can seem daunting — it’s a commitment to the unknown. But with plenty of research, data and strongly-supported analysis, you can be more certain than the weatherman when banking on Brisbane’s future.

Who is buying property in Brisbane?

Demographic analysis is one of the key factors when predicting trends in the property market. Over the next 5 to 10 years, the South-East Queensland property market will see a drastic increase in activity for first home buyers and downsizers. According to the latest report by Matusik Property Insights, these two groups will be dominating the market over the next decade. The number of first-home buyers expected to increase 314% over the next few years, occupying 20% of the market, with young renters making up an additional 9%.

With overseas migration booming in the Sunshine State once again, a large proportion of these international buyers are purchasing their first home too. With $1.4 million dollars the average price for a one-bedroom apartment in Beijing, it’s no surprise young Chinese citizens are making the move to Queensland and diving head first into the property market when they get here. With all countries of origin considered, the average age of Queensland’s overseas migrants is 29 years old. Interstate migration to Queensland is also at a resounding high, with young professionals moving from Sydney where they’ve been priced out of the market.

To cater for this increase in first-home buyers, the Brisbane property market is expected to shift towards smaller land packages (under 400²) to increase affordability, as well as reasonably priced house and land packages in newly developed estates in middle ring suburbs about 10km to 20km out of the CBD.

With baby boomers beginning to retire, properties suitable for downsizers are also surging in demand and in popularity. While not quite rivalling the 314% increase of first-home buyers, the number of downsizers active in the property market is forecast for a 112% increase and will occupy 20% of the market.

Downsizing from their large family home, this demographic isn’t interested in freestanding homes, instead are shifting to apartments, villas and townhouses. Properties with easy access, plenty of storage, spare rooms for the grandkids to stay and strong communal facilities are very appealing to baby boomers looking to start the next chapter of their lives in a smaller, more manageable space they can call their own.  This type of home, that straddles the fenceline between an apartment and a detached home is what Matusik Property Insights calls the “missing middle”. Currently, only 5% of new and off-the-plan properties cater to this, this number is expected to jump to 20% over the next few years.

So what does that mean for Brisbane property prices?

With increased demand comes increased prices, meaning investors will benefit greatly from properties which are attractive to downsizers and first-home buyers (at price points under approximately $550,000).

This plays into yet another trend in the market, the growth of multi-generational living. With young adults staying at home longer in order to save for their deposit, and grandparents looking to downsize and needing care, it’s becoming more and more common for three generations of the same family to be sharing the same space.

The focus on multiple-occupancy property is clear throughout both first-home buyer and downsizer trends. While downsizers want room for the family to stay, first-home buyers are likely to want roommates to help with mortgage repayments. Overall, the need for user-friendly space and homes geared towards multiple living areas are really on the rise.

And what does that mean for Brisbane buyers?

Looking to the immediate future, buying a property that’s attractive to first-home buyers and downsizers is likely to see very positive capital gains in the next few years, as prices for these types of homes skyrockets as a result of the increased demand.

Written: 9 August 2018

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