‘Best and worst’ Brisbane investments – claims

If you’re thinking of investing outside of the over-heated Sydney and Melbourne property markets one Brisbane-based expert has identified the city’s best and worst suburbs for investment.

And strata-minded potential purchasers will doubtless be interested in his claim that the best prospects include townhouses in three suburbs while among the worst are units in another.

PK Gupta of Consulting by PK claims there are excellent investment opportunities in Brisbane, but a strategic selection of the kind of assets and the suburbs where they sit is the key to success.
“Brisbane definitely has more upside than either Sydney or Melbourne when it comes to investment opportunity,” Mr Gupta says. “At the beginning of 2021 you could throw a dart at a map of Brisbane map while blindfolded and you would have hit a growth location.

“But things have changed. Now it’s not should I buy in Brisbane, but where and what should I buy. Some markets are still at the start of their growth cycle for certain types of properties, so the long-term upside is excellent.”

He says townhouses in Taigum, Northgate and Clayfields are among the three best suburbs for Brisbane investors and units in Toowong are among the worst.

“Taigum is positioned 13 km north of Brisbane and offers a mix of accommodation types from established housing to townhouses and units,” he explains, adding that the price difference between townhouses and detached homes reveals substantial growth potential.

“House values have risen considerably in the past 12 months with a median price of approximately $600,000 for a detached dwelling. In comparison, units and townhouses have a median of approximately $400,000.

“This is a huge disparity. I expect the value gap between them to close in the medium term. Townhouses are the most likely to rise in value as affordability drives more homeowners and investors away from housing. Those who invest in townhouses here will see excellent value growth over the coming year
or so.

“Taigum has had a stigma as a low socio-economic area, but if you purchase the right kind of
property this suburb will deliver excellent price-growth potential regardless.”

Northgate is closer to the CBD, at 8km and has a range of housing types on offer.

“Gentrification is the big driver here – I’d even say Northgate is Brisbane ‘hidden secret’ when it comes to investment,” Mr Gupta says. “The demographic is shifting solidly away from blue-collar workers and toward upwardly mobile young professionals.

“The suburb is highly accessible with easy access to the Bruce Highway, the Gateway Motorway, major retail outlets and the airport. I think the prospects for this area continue to get better and better.

“Again, townhouses offer the best potential at present. The median townhouse price sits at $450,000 compared to detached houses at $1 million. Buyers are sure to recognise the excellent value townhouses offer relative to detached houses, and this gap will close rapidly.”

Clayfield is among Brisbane’s best inner northern suburbs, says Mr Gupta, and the area is already well regarded but recent events will bring increased demand for housing in the near future.

“A huge driver here is schooling – specifically Clayfield College. The school has recently moved from being an all-girls institution to co-education. It has an excellent reputation and there’s already been a spike in families moving to the area, keen to have their sons attend the school.

“On top of this it’s a very accessible suburb with heaps of retail outlets and lifestyle options on offer. Townhouses again offer the best prospects with a median price of $500,000 sure to attract both homebuyers and investors.”

When it comes to the “worst” suburbs for investment Mr Gupta says Toowong might seem like a controversial choice but explains that he is specifically focussed on investor units there.

“Toowong is an inner-city western suburb with great facilities and infrastructure. The nearby University of Queensland is also a huge source of tenants. But attached housing is oversupplied. The amount of unit construction underway in Toowong is enormous.

“Unit prices have only gone up 2.2 per cent in the past 12 months, while house prices rose 24.4 per cent during the same period. That speaks volumes about the demand/supply imbalance of units.

“And they just keep building units in the area. I don’t see much potential for units to
increase in value here at all.”

Another area that gets the thumbs-down for investment is Woodridge: “The big problem for Woodridge property is that the suburb is dominated by tenants. Around 65 to 70 per cent of all households are renting. This is fine when a rental boom is underway, but if measures are taken to ease the housing crisis, Woodridge will suffer greatly.

“As vacancies rise in the future, landlords will be competing against each other to attract tenants – and there will be a lot of property on the market.

“Most of Woodridge’s value gains have been made in the past three years. Its prices will flatten and could quite reasonably be expected to soften in the medium to long term.”