Understanding the Brisbane and South East Queensland Townhouse Market 2018
Across Australia key economic indicators drive the townhouse property market in general – population growth, infrastructure development to support the population growth, special events and tourism.
Queensland is expected to have the strongest economic growth of any state in 2016-17 and 2017-18. This rebound will be underpinned by a surge in overseas exports, as LNG production drives the value of Queensland exports to around $100 billion in 2019-20.
South East Queensland (also referred to as SEQ, SE QLD or SE Queensland) including Brisbane and the Gold Coast is currently the third largest capital city region in Australia. The phenomenal growth in the area over the next 25 years means an additional 1.65 million jobs will be created. The tourism industry alone will grow to $14 billion per annum. Dwellings, many of them townhouse developments, will increase by more than a million.
The Gold Coast Commonwealth Games in 2018 and several infrastructure projects are driving strong property market growth. A combination of value, relaxed coastal lifestyle and employment has made South East Queensland very appealing, especially when comparing the townhouse property prices to Sydney and Melbourne.
In terms of population, one in every seven Australians already live in South East Queensland and the population in the region has been growing by 67,000 annually – in fact over the next 25 years, SE Queensland is expected to grow from about 3.5 million to 5.3 million people which will require almost 800,000 new dwellings and around 950,000 new jobs.
Public spending on infrastructure in SE Queensland is the highest in Australian history. More than $25 billion has been budgeted to be spent before 2031. In the Brisbane CBD, major projects such as the $5.4 billion Cross River Rail and the $3 billion Queens Wharf will create thousands of jobs and make Brisbane a more attractive destination for tourists.
The economic indicators and statistics bode very well for the off the plan and complete townhouse development market in Brisbane. Since 2012 Brisbane had unprecendeted levels of apartment construction with huge supply of product entering the market for tenants. The number of apartment approvals has since declined over 45% in 2017 although currently in the system under constuction and approved are another 11,00 new Brisbane inner-city apartments are due to come to market by 2021. In comparison to the townhouse market which over 2017 increased by $12.9% for the year.
Government Planning further value adds to the Brisbane’s townhouse investment market with the easing of planning restrictions on the size of inner city blocks with potential for sub-division and a continuing focus on the development of inner and outer urban masterplan communities. Simply put, the potential for the townhouse construction and building pipeline to gather momentum and overtake the house and land and apartment markets supplying the most popular dwelling type to owner occupiers and tenants alike. With this comes equilibrium of vacancy rate as the population growth is so high the volume of new off the plan townhouses in Brisbane and South East Queensland will actually be required to meet rental demand.
The good news story for Brisbane’s townhouse market is further supported by the South East Queensland Urban Regional Plan 2017, also known as ShapingSEQ, was given effect as the new regional plan for South East Queensland (SEQ) on 11 August 2017. (Department of Infrastructure, Local Government and PLanning)
ShapingSEQ provides a regional framework for growth management, which sets the long-term planning direction for sustainable growth, a glabally competative economy and high quality living. What that means is Brisbane and South East Queensland is growing at such a rapid rate it needs a plan to manage the expansion to ensure we can live day to day. We will write a full summary of ShapingSEQ in another blog for your reading pleasure.
In summary, the economic growth in Brisbane and South East Queensland is massive resulting in high level of demand for off the plan and complete townhouses in Brisbane, on the the Gold Coast and South East Queensland. Stay tuned for our ShapingSEQ blog.