Brisbane is one of the top 3 locations in Australia when it comes to property investing. So it’s no surprise that you’re looking to invest in this area. To add to the appeal, Brisbane experienced record-breaking double-digit1 growth over the past year.
The median property prices grew an incredible 13% 1 over 12 months. For some, this percentage increase on a property may exceed their annual income. So if you’re looking to invest long-term and turn a profit as big as your annual income, you may want to give investment properties a go.
This is just the median increase - some properties have exceeded 30% 1 growth. With the successful 2032 Olympic Games bid fuelling expansion, the region is only going to experience greater growth and a plethora of new jobs. This in turn means that property prices will keep increasing and it may become more difficult to afford as time goes on.
Double-digit growth in the median property price and forecasts of infrastructure growth are great market indicators. There are, however, some other objective ways of determining if a property is a wise investment. These indicators cater to long-term ownership and favour houses over units/apartments.
The impartial indicators:
- The number of residents in scarce skilled jobs (whose income is statistically above average).
- The median rental yield in these areas, which is linked to the point above. This affects passive income from investment properties.
- Demand for property outweighs the supply.
- Positive growth in the area, based on historical data.
- Projected improvement in the surrounding infrastructure.
Read on to see how the following 6 suburbs fare against the above criteria. Bear in mind that the stipulated rental yields in this article are for houses and not units.
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Sixth best to invest in
Bardon
- Median 3 bedroom house price: 1,100,000 2
- Year-on-year change in the median sale price: 10.1% 3
- Rental yield: 2.6% 2
Bardon is an inner-ring suburb which means its growth will benefit greatly from the lifestyle it offers. It still has the benefit of being a family-friendly suburb with a decent amount of foliage to give it that scenic, suburban feel. However, the location of this suburb — just 5km from the Brisbane CBD — has made it one of the more expensive options on our list.
Results from a 2016 survey also indicate that the average weekly household income of the residents is close to twice 4 the Queensland average. This may be partly due to the main demographic being mature and established couples/families 5 that have grown in their careers. Looking at the trend, it is likely the median household income will consistently grow.
The capital growth rate may not be as high as some of the other entries on the list. However, the median house price is higher overall. If the property is sold after several years, this could lead to a higher yield.
The population is hovering around 9,505 6 with 21.50% 6 of the residents living in rental accommodation. The percentage of tenants has slowly decreased 7 over the years with the majority of the residents being mortgage holders. The area has a 1.38% 6 vacancy rate and experiences an above-average demand. Each listing averages 1,389 5 visits per month and sits on the market for around 85 days 6 before being sold.
Pros
- Located in the inner-ring (5km from the CBD).
- Local demographic earns well above the average household income.
Cons
- Higher than average price point.
- A decreasing percentage of tenants.
- Year-on-year change in the median sale price is lower than other list entries.
Unloan Variable Home Loan (Owner)
Interest rate (p.a.)
5.99%
Comp rate^ (p.a.)
5.90%
Max LVR
80.00%
Application fee
$0.00
Monthly repayment
$2,695.08
Total repayment
$970,228.80
Highlights
- Get a rate discount every year.
- No application fees, no account fees, and no exit fees.
- Borrow up to 80% of your home’s value.
- Refinancing only.
Fifth best to invest in
Scarborough
- Median 3 bedroom house price: 600,000 8
- Year-on-year change in the median sale price: 25.12% 9
- Rental yield: 3.5%
A suburb with an affordable price point, Scarborough is a seaside village 35km from the Brisbane CBD. The suburb is close to Kippa-Ring train station which may alleviate the issue of being so far from the CBD.
The year-on-year increase in the median sales price is an impressive 25%, which is higher than the other entry-level options on this list. The rental yield is also higher than average making it a better investment for potential landlords.
The population sits at 15,470 10 with 32.80% 10 of the residents being tenants. The weekly household income of the residents is slightly above the Queensland average 11 with the majority of residents living in rental accommodation, and mortgage holders being a close second. 12 The age of the average resident is 49 years old 13 which may indicate a more reliable pool of tenants that plan to stay long term.
Pros
- Higher rental yield.
- Good Y-O-Y growth in the median sales prices.
- Entry-level price range.
- Mature demographic which is often desirable for investors.
Cons
- Far from the CBD.
- Possibly a difficult market to break into due to high demand.
Fourth best to invest in
Carina Heights
- Median 3 bedroom house price: 760,000 14
- Year-on-year change in the median sale price: 14.79% 15
- Rental yield: 3.2% 14
Carina Heights is deemed one of the top 5 growth suburbs 16 in Brisbane. It has a growth forecast of 24% 16 over the next 3 years. It is just outside of the inner ring at 7km from the Brisbane CBD and equally far away from Moreton Bay. It’s more affordable than its neighbouring suburbs and has an above-average rental yield.
The weekly incomes in the region have seen exponential growth over the last few decades 17. This trend is still being observed and a demographic with a high disposable income is always a plus. The largest demographic is mortgage holders 18, with tenants coming in second at 39.59%. 19 The area attracts relatively high demand with each listing getting 1,247 visits per month 14 and the suburb has a vacancy rate of 1.85%. 19
Older couples and families make up the largest portion of the demographic 14, and the average age of residents is 37 years old. 20 This option is best suited to you if you’re looking for a semi-affordable property that will experience high, long-term growth.
Pros
- A high percentage of residents are tenants.
- Deemed one of the top 5 growth suburbs in Brisbane.
- The local demographic earns a good income.
Cons
- Slightly lower Y-O-Y increase in the median sales prices.
- Neighbouring suburbs may seem more desirable to the public.
Third best to invest in
Keperra
- Median 3 bedroom house price: 607,000 21
- Year-on-year change in the median sale price: 21.6% 22
- Rental yield: 3.93% 23
Keperra is a wonderful option for those looking for an entry-level property. The suburb is 9km from the CBD and close to a railway station. The excellent transport facilities are usually a promising indicator of growth, and that goes for most suburbs.
The weekly household income of the occupants has steadily increased over the years and has always been higher than the Queensland average. 24 This generally means the residents have enough disposable income to enter the property market or dabble in it even further. It could also indicate that your potential tenants will always be able to pay rent on time.
The suburb is home to 6,814 25 people of which 30.91% 25 are renters. The area has few properties available and a low vacancy rate of 0.68%, 25 indicating high demand. Each listing has an average of 1,424 21 visits per month.
The main demographic in the area is mature and established couples/families which may explain the hesitancy to sell as well as the limited data on how long it may take to sell a property. However, the number of rental accommodations has been steadily increasing over the years. 26 This may be of interest to you if you plan on becoming a landlord.
Pros
- Entry-level price range.
- Very high demand for properties in this suburb.
- High rental yield.
- Excellent local public transport.
Cons
- Very low vacancy rate and a demographic that may not want to part with their properties.
- Lower than average population.
Unloan Variable Home Loan (Investor)
Interest rate (p.a.)
6.29%
Comp rate^ (p.a.)
6.20%
Max LVR
80.00%
Application fee
$0.00
Monthly repayment
$2,782.44
Total repayment
$1,001,678.40
Highlights
- Get a rate discount every year.
- No application fees, no account fees, and no exit fees.
- Borrow up to 80% of your home’s value.
- Refinancing only.
Second best to invest in
Salisbury
- Median 3 bedroom house price: 630,000 27
- Year-on-year change in the median sale price: 18.0% 28
- Rental yield: 3.6% 27
Salisbury is located 12km from the Brisbane CBD. The suburb offers many sources of entertainment for its residents. There are several sports centres, parks, reserves, and wetlands available for exploration. The suburb also has several tertiary education institutes. This may explain why around 15% 27 of the population are independent youths.
The suburb is home to 8,207 29 people with 38.75% 29 of its residents making use of rental accommodation. The area has a very low vacancy rate of about 0.59% 29 and it takes longer than usual to sell a property (210 days).
These properties do have renovation potential due to their entry-level price range. Some properties can sell for as low as an affordable $450,000. 30 The rental yield is also decent if you’re looking to become a landlord.
This suburb has a lot of potential and you may find a hidden gem with enough research. The reason being: the area isn’t being overhyped. Additionally, the potential for growth in the suburb is due to its proximity to Mt Gravatt 30 – the major transport hub with direct access to the CBD.
Pros
- Many entry-level properties to begin investing in.
- A high percentage of residents use rental accommodation.
- Located close to excellent public transport.
Cons
- The suburb may contain some properties with major aesthetic/functional issues.
- Low vacancy rates may make it difficult to enter the market.
The best to invest in
Ashgrove
- Median 3 bedroom house price: 950,000 31
- Year-on-year change in the median sale price: 34.0% 32
- Rental yield: 2.7% 31
Topping our list for investment potential is Ashgrove. Like Bardon, it’s also 5km from the CBD but still maintains a family-friendly environment. Ashgrove is very walkable and has enough nature and greenery to make it worth mentioning. This suburb is more affordable than Bardon, with the benefits of a much higher yearly growth.
There is some commercial development taking place which is a great non-numerical indicator of growth. There are rare architectural options in this suburb. There are also a number of wooden homes, colonial cottages, and properties dubbed ‘Ashgrovian’ (a unique style of the Queenslander home).
The weekly family income in this region is also more than double that of the Queensland average. 33 Well over 50% 31 of the demographic are mature and established people with families. This may explain the impressive local schooling district.
The area experiences the highest demand from the entries on the list, with properties averaging 1,678 31 visits per month and the average time to sell a house is around 70 34 days. The population is sitting at around 13,038 with 24.48% 34 of the residents being tenants. Mortgage holders have consistently been the largest percentage of residents. 35 This may be due to the high earning pattern of the locals.
Pros
- Very high growth every year.
- Very high demand for property in the area.
- Located in the inner-ring.
Cons
- The slightly higher price point.
- Lower rental yield than other list entries.
Further factors to consider
There is nuance in every suburb. While you might be able to afford a property in at least one of the areas listed, you will need to understand the location and demographic on a deeper level.
There are always some areas within a suburb that should be avoided. Or alternatively, you should manage your expectations when dabbling in these less-than-ideal spots. Some regions may be prone to flooding and other natural disasters, while others may just have poor reputations. You might struggle to find this information online.
Doing your own research outside of the internet will help you greatly. Interview the locals and spend enough time in the suburb of your choice. If you personally approve of the location, you’ll have an easier time convincing someone else to buy/rent your investment property.
Article sources
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