Infrastructure Investment Drives Woolloongabba

23 June 2016

Read our latest Brisbane Market Update to find out what’s driving opportunity and growth in Australia’s new world city.

Economic stability, business opportunities, and a rising population, coupled with world-class educational, leisure and cultural institutions, continue to attract property investors to Australia’s new world city. In this Market Update, we look at the appeal of Queensland's capital, Brisbane, the huge potential of its property market and why inner suburban areas such as Woolloongabba are set to rise up the ranks of investment hotspots.

Brisbane fundamentals

Brisbane is Australia’s third-largest city, and one of the fastest-growing mature cities in the world, with an economy that is expected to be worth more than AUD217 billion by 2031. From a population of 2.3 million in 2015, by 2061 the population is set to more than double to 4.8 million.

shutterstock_220500574.jpg

Brisbane has been identified as a major global market for inward investment for a while now. The multi-billion dollar Queen's Wharf Brisbane development is one such example; an integrated resort that will house hotels, restaurants, sport facilities, retail, repurposed heritage buildings and apartments when it opens in 2022, in turn creating more than 8,000 new jobs. Multiple regeneration projects are taking place across the city centre, forming employment and residential hubs and showing that Brisbane, as its Lord Mayor promotes, is open: open for business and open to people from around the world.

New residents are drawn to the swelling number of jobs – predicted to increase to 1.5 million jobs in 2031, up from 1 million in 2012 – and world-class education in the city, as well as the city’s agreeable climate, lifestyle and rich cultural and leisure offerings.

Businesses favour Brisbane’s port, expanding airport and status as a strategic trade hub as the closest state capital city to Australia’s three largest export markets: Southeast Asia, East Asia and North Asia.

Infrastructure is also key and South East Queensland is investing heavily – earmarking AUD9.2 billion for transport upgrades before 2031. Much of this funding will bring inner city suburbs within even closer reach of the bustling CBD, spurring an increase in demand for accommodation in these areas.

Local market trends

Property prices in Brisbane have been on an upward trajectory with the Brisbane LGA recording an average annual growth rate of 4.1% for residential units and 5.3% for houses in the ten years to September 2015. Brisbane also offers relative affordability compared to Australia’s other major capital cities with a median unit sale price of AUD431,000 – that's AUD294,000 more affordable than Sydney in September 2015.

There has been a global trend towards apartment living and Brisbane is feeling the shift too, with apartment transactions expected to represent a majority in Brisbane by 2031 according to Urbis. According to Brisbane LGA, the apartment market has shown a long-term trend of rising median prices, growing an average of 5.3% per annum over the ten years to September 2015.

A limited supply and strong demand has increased competition for rental dwellings in Brisbane where vacancy rates remain tight at 2.7% in March 2016.

Investing in Woolloongabba

A key location we’ve been keeping our eye on is Woolloongabba, a suburb known primarily for containing some of Brisbane’s major sporting venues, including ‘The Gabba’ – Brisbane Cricket Ground.

shutterstock_190595945.jpg

On the brink of a development boom that will see the area’s population soar, Woolloongabba offers excellent modern amenities and fast connections to key areas such as Brisbane’s CBD, just 3km away. Connectivity is set to further improve. The recently announced AUD1.54 billion Brisbane Metro project includes plans for a dedicated route linking Woolloongabba to Herston via Brisbane CBD in less than seven minutes.

Known as the 10th most walkable neighbourhood in Brisbane, out of more than 400, Woolloongabba is also home to retail and entertainment hotspot Logan Road, Queensland Cultural Centre and South Bank Parklands. Also nearby; The University of Queensland, Queensland University of Technology, Griffith University, TAFE Queensland, and Central Queensland University, which engage more than 138,673 students and 21,000 staff who in turn drive local housing demand. Healthcare is prominent too with five hospitals in the area.

Woolloongabba is a hub of industry and business and is expected to grow – 20,549 new jobs are predicted to be created by 2031, attracting more people to an area already populated by a well-educated and affluent demographic. Some 38% of the population is aged between 20 and 39, with the household average weekly income sitting at AUD1,329; 8% higher than the State average. The population of the area is expected to grow from 5,082 people in 2011 to 16,930 in 2036.

This high level of popularity has seen local housing start to rise rapidly in value, with apartment prices growing by 14.6% in the 12 months to September 2015. This recent spike is underpinned by long-term, sustainable growth in key investor segments. In the ten years to September 2015, one and two-bed apartments in the Woolloongabba catchment area demonstrated an average annual rental growth rate of 7.5% and 7.3% respectively. Driven by this young, professional rental demographic, off-plan apartment sales for September 2015 offered a rental premium of 12.8% over the established market.

Woolloongabba’s property market is set to continue soaring. To find out more about our latest project in this promising neighbourhood, get in touch.


 

Scott Hagerman

Written by Scott Hagerman

Scott has over ten years experience in investment advisory and financial planning services for individuals and businesses. His career began advising wealthy individuals and small to medium sized enterprises on risk management in the UK and the US, and has focused on wealth management and real estate investing since moving to Hong Kong in 2010. He has six years experience evaluating real estate investment opportunities in the US, Canada, UK, Malaysia and Australia.

Related posts