This week we meet with Shannon Davis, Director of Metropole Property in Brisbane to discuss the latest on the recovering Brisbane property market. Brisbane’s population continues to rapidly grow, rents are on the rise and now looks like a ripe time for investors. Find out the areas to look out for in Brisbane..

Listen to latest podcast by using the player embedded into this page OR read the transcript below :

PODCAST TRANSCRIPT :

Andrew Mirams (AM): Sitting here with me today is Shannon Davis, director of Metropol Property’s in Brisbane. Thanks for joining me Shannon.

Shannon Davis (SD): Thanks Andrew.

AM: I guess with the Brisbane property market we’ve had a couple of interesting years with some floods and things like that. Tell me a bit about what’s happening up there in the Brisbane market.

SD: After the floods a lot of investors and developers bided their time and now we’re sort of coming out of that now. One of the results is, we’ve still had a gain in population and rents have been rising. Brisbane offers investors quite an attractive yield at the moment, about 5%, which isn’t really matched by any other capital cities at the moment and therefore it’s driving a lot of interest to our market.

AM: Absolutely. I think for super funds and things like that, that are a little bit more yield conscience, that would represent good buying.

SD: Yeah, definitely. It won’t last forever as prices start to move and just before this last quarter we were the strongest performing of the capital cities. The gross yield will drop away a little bit and when it drops to a more traditional, sort of, 3% maybe you’ll see less investor interest.

AM: But at the same time, if yields drop the counter to that is, obviously, we’ve got some capital growth and it appears to be right at a good time to be getting into the Brisbane market. Would that be fair to say?

SD: Yeah and it’s about time. Brisbane investors have been patient, they’ve been rewarded for their patience now with a bit better in average capital growth and I hope it’s the start of a long way to go.

AM: If we’re buying in Brisbane and we’ve got clients, I’ve got clients from all over Australia, in particular they might be in Melbourne or Sydney or somewhere else like that, and their looking at the Brisbane market, tell me about some of the properties in the areas that you look to buy in.

SD: With Brisbane we can come a little bit closer than maybe the 15 km ring. Look at, sort of, the 10 km out  but you can some really blue chip suburbs, like your New Farm, Paddington, Bulimba, and you can still get really good apartments and units for about $450,000 to $500,000, you might even sneak in a city view.

AM: Therefore I guess other people around there, actually right inside that 5 km radius, aren’t they, the suburbs you’re talking?

SD: Yeah, that’s the city fringe and very high owner/occupier percentage. It’s really walkable, lots of lifestyle and amenities. That’s what we look for when we’re trying to buy.

AM: That’s an interesting thing you just said. Walkable. Why would you say walkability or why is that important?

SD: We’ve seen that those properties that have access to these type of precincts perform about 20% better and that’s what the smaller the place, the dwelling is, the more important that it has access to be able to do some errands on foot rather than always having to drop into your car or get in a train to go and pay bills and shop or do what we do in our spare time.

AM: Amenities and things like that are obviously very important. It comes back to the old saying of ‘location, location, location’. It sounds like that’s what you’re getting in Brisbane.

SD: Yeah and we can at this time of the property cycle, we’re getting better value, our purchases for our investors, and they can probably get something they might be able to afford in the southern states.

AM: What type of property do you get in a, let’s say…you mentioned New Farm and sort of along bordering the river and around the city fringes, as you mentioned? What type of  property does $450,000 to $500,000, which would be a entry level probably for Sydney and Melbourne, what does that get you in Brisbane?

SD: You’ll get a big generous, sort of,  brick enclosed unit, may have a river or city view, it won’t have expensive gym, pool or lifts, but it will be generous in its scope, big bones, both bedrooms, extra parking and visitor parking and it really represents a good purchase with not much maintenance or ongoing expense. But, if you couple that up with a cosmetic renovation you can add instant equity.

AM: You just mentioned a very interesting point. No gyms or pools or lifts. Why is that important?

SD: I think investors need to look after the reoccurring expenses, they’re the ones that really count, and when you get a really expensive body corporate and a sinking fund from the start, that’s really going to drain away at the investors returns as that building depreciates and get’s older.

AM: Well, I think there are some great tips for our investor market out there. Brisbane seems like a very good place to be buying. thanks for joining me today. Thanks Shannon.

SD: No worries Andrew, thank you.