There is no question about it.
Queensland is THE state of choice for property investors looking to buy. It beat its traditional rivals, New South Wales, Victoria and Western Australia by 4 to 1, according to property investment advisers MRD Partners. That compares with 6 to 1 for South Australia, 32 to 1 for Tasmania and a by a whopping 48 to 1 for ACT and Northern Territory.
Over 50% of the respondents to MRD’s Australian Property Investor Survey indicated that Queensland was the preferred State for their next investment and there are other studies which also indicate a similar trend of investor opinion.
Market analyst Eliza Owen, who helped put the figures together for web based company On The House, said Queensland was “a clear victor in the rental investment market” defeating New South Wales 41-18 in percentage terms.
“The data revealed 56 suburbs across Australia where rental yields are above 5 per cent and have a capital growth prediction of at least 3 per cent over the next eight years. Of these suburbs, 41 per cent were found in the Queensland area, while New South Wales boasted only 18 per cent of suburbs on the list,” she said.
While some may scoff at the idea of the Queensland market emerging on top given recent surges in the NSW property bubble, Core Logic RP Data figures showed the state was giving the southerners a good run for their money.
Nick Lockhart, MRD Partners’ Managing Director, said that seasoned investors would recognise that South East Queensland in particular was the next boom market because it was following the classic ‘property cycle’. Typically, in such a situation, a boom is followed by a flat market with some underlying price correction. This precedes a lift in property prices. Since the Global Financial Crisis Brisbane is the only capital not to have experienced a substantial lift so it is overdue for an upturn in prices. And this is the ‘Go’ flag for investors in the know.
Mr Lockhart said “The Brisbane market has moved from recovery to growth but has not yet entered what we could call a ‘boom’ market, so there is plenty of opportunity for people to get in now and buy before that growth comes.”
They felt that New South Wales and Victoria were peaking (although they will continue to be popular because of their history of strong growth), whilst the property market in Western Australia and the Northern Territory were ‘in a slump’. The State of Opportunity for the majority of those surveyed was Queensland.
The coming year?
Despite the economic climate the survey found the majority of property investors were positive about the market. In fact an average of 51% of respondents indicated they would buy in the coming year – with a massive 89% of ACT respondents saying they wanted to buy within 12 months. Interestingly, in response to another question, a further 50% believed negative gearing would remain in place despite the latest speculation on the Government’s tax reforms.
House, land, apartment? What’s the best investment?
“People still believe the value of a property investment is in the land,” Mr Lockhart said. So it’s not surprising that the investors who took part in the survey preferred to buy house and land packages (62.8%) as opposed to townhouses (15.46%) or units/apartments (14.01%).
The preferred location was less important and the respondents were almost equally split between the inner city (47.34%) and areas further from CBDs (45.41%).
After an upturn in high density living with big apartment blocks and townhouses the norm in most metropolitan areas the pendulum also seems to be swinging in favour of single-dwelling homes once more. The well planned housing estates that are springing up in competition to high rise offer a much more communal style of living with the parkland, lakes, bikeways and community facilities like hospitals and schools nearby.
Given the figures from the survey house/land packages are definitely what people prefer…… and what canny investors are seeking.