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Rental Prices Surge in the Brisbane CBD

By Sales IBA

The Inner Brisbane City property market has experienced the largest price increase in 15 years, with prices rising over 10% in the last 12 months. Market experts are predicting prices will continue to increase for inner-city apartments as Brisbane City has positioned itself as the optimum location for the astute property investor, capturing both high rental yields and further price growth.

Queensland recorded a population growth rate of over 2% for 12 months, twice the national average and the highest of all states and territories, with a large percentage moving back to the Brisbane Inner City. Employment growth, lifestyle, and affordability have all been factors driving migration from not only interstate but also internationally, who previously would have sought out living in Sydney or Melbourne.

Recent job growth in Brisbane is largely influenced by the substantial infrastructure in place from both the private and government sectors, adding to the demand for inner-city rental properties. Some of the major infrastructure projects around Inner Brisbane include the Cross River Rail, Brisbane Metro, Queen’s Wharf, Brisbane Live, Victoria Park, Waterfront Precinct (Eagle Street Pier), and the Olympic Games preparation set to start in the coming years. With the continuing improvements to transport infrastructure and entertainment standards in the City, Brisbane is maintaining desirability, attracting individuals with a higher net worth.

(Left to right: Cross River Rail, photo source crossriverrail.qld.gov.au. Queens Wharf Precinct, photo source queenswharfbrisbane.com.au)

Brisbane is leading the growth of capital city housing and apartment rents, with the lowest rental vacancy rates in our history, remaining below 1% for the last 12 months, with more upward pressure predicted over the next quarter. The rental properties managed by Ray White Inner Brisbane Apartments have had an increase in yields by up to 20% in the last 12 months alone. Our property owners are experiencing limited downtime between leasing, increased rental yields and extremely low levels of arrears.

Brisbane has long had lower rental prices than the other major cities in Australia, therefore
applicants that have migrated to Brisbane are generally used to paying and maintaining higher rents, making them more attractive to the property owner. We are receiving high volumes of quality applications per listing, with the majority tenanted before the existing lease expires, often with tenants renewing their leases out of fear of not finding adequate accommodation elsewhere.

Over the past decade the Inner Brisbane City property market has experienced limited price growth in comparison to Sydney and Melbourne. First home buyers often shy away from apartment purchases, consequently the Brisbane CBD hasn’t experienced accelerated capital growth over the past few years like the outer suburbs, due to higher entry price levels, greater deposits required by banks and rising operational costs.

In suburbs desirable to first home buyers, we predict that in the coming months we will see an influx of properties onto the market, and a reduction in property prices. The cost of living continues to rise and fixed home loans start maturing causing mortgage pressure. We do not anticipate this occurring in the Brisbane City due to rents outpacing interest rate rises and cost of living expenses.

The combination of increased rental growth, with property prices remaining steady, has opened a window of opportunity for property investment. The state government has also pulled back on proposed changes to land tax making the city desirable for interstate investment.

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