We had a lot of feedback after our last newsletter where our Market Update focussed on housing affordability. Much of the feedback asked for more information about how to choose the suburbs that have the highest probability of delivering above average growth. For the purpose of this article we are going to compare the growth of properties in 3 grouped price ranges: Affordable (around the Brisbane median), Mid-range (35-55% above the Brisbane median) and Premium (more than 70% above the median).
Which suburbs can you still buy a house around the median house price, and would those suburbs have the potential to deliver above average growth?
Five years ago, in 2011, the median house price for the Brisbane LGA (Local Government Area) was $517,000 (source: REIQ). We have looked at a sample of 5 suburbs within 15km of the CBD that, in 2011, had a similar median house price –Carseldine, Nudgee, Holland Park, Enoggera and Middle Park. Each of these suburbs has vastly different investment fundamentals and the 5 year growth number tells an interesting story.
| 2011 | 2016 | Growth | |
| Holland Park | $ 517,000 | $ 692,500 | 33.90% |
| Enoggera | $ 522,500 | $ 673,000 | 28.80% |
| Nudgee | $ 515,000 | $ 618,000 | 20% |
| Carseldine | $ 515,000 | $ 587,500 | 14.10% |
| Middle Park | $ 527,500 | $ 580,000 | 10% |
Clearly, a strategy of buying around the Brisbane median is not going to guarantee a winning outcome.
What about those who focus on buying in blue chip suburbs?
The top 6 most expensive suburbs in the Brisbane LGA in 2011 have also shown uneven levels of growth.
| 2011 | 2016 | Growth | |
| Teneriffe | $ 1,151,500 | $ 1,950,000 | 69.3% |
| Ascot | $ 940,000 | $ 1,250,000 | 33.0% |
| New Farm | $ 1,252,500 | $ 1,626,000 | 29.8% |
| Bulimba | $ 915,000 | $ 1,170,000 | 27.9% |
| Hamilton | $ 1,130,000 | $ 1,175,000 | 4.0% |
| St Lucia | $ 1,030,000 | $ 995,000 | -3.4% |
So just focussing on blue chip locations is not going to assure above average growth either.
At Property Pursuit what we find most interesting is the analysis of properties in the 35-55% above median grouping. This is the price range in which most of our investors purchase.
| 2011 | 2016 | Growth | |
| West End | $ 710,500 | $ 1,055,000 | 48.5% |
| Wilston | $ 730,000 | $ 1,065,000 | 45.9% |
| Hawthorne | $ 800,000 | $ 1,160,000 | 45.0% |
| Highgate Hill | $ 777,500 | $ 1,100,000 | 41.5% |
| Chelmer | $ 790,000 | $ 1,005,000 | 27.2% |
| Balmoral | $ 760,000 | $ 947,500 | 24.7% |
| Bardon | $ 716,000 | $ 885,000 | 23.6% |
| Clayfield | $ 881,000 | $ 1,055,000 | 19.8% |
| Hendra | $ 792,500 | $ 940,000 | 18.6% |
| Kalinga | $ 794,500 | $ 934,500 | 17.6% |
| Sherwood | $ 760,000 | $ 886,000 | 16.6% |
| Paddington | $ 810,000 | $ 939,000 | 15.9% |
| Auchenflower | $ 813,500 | $ 884,500 | 8.7% |
| Fig Tree Pocket | $ 830,000 | $ 893,750 | 7.7% |
| Spring Hill | $ 865,000 | $ 910,000 | 5.2% |
Of the 189 mainland suburbs in the Brisbane LGA, Property Pursuit have identified 58 that are Investment Grade. We strongly believe that buying an affordable property, or a property in a blue chip location, is not the only key to success. Our local knowledge, coupled with our 10 Phase process and 36 Investment Fundamentals provide a comprehensive basis for prudent decision making.
My personal pick for 2017 is Paddington. Property Pursuit consider Paddington to be a Tier 2 suburb with a café culture, good transport and close to the CBD. Compared to the other ‘lifestyle precincts’ in Brisbane, it has been the under performer to date and has a median price under $1m. Character houses, that are free from flood and overland flow, have good bones, and are in the right neighbourhoods are a great place to start.
Want to know more? Click Here to find out more about how we can help you. Or call us or send an email to receive more information and a quote.
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Enquiries@propertypursuit.com.au |
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1300 726604 or +61 7 3177 3399 |
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