PRE-Market-Focus-Brisbane-report-may-2015_v1-preview2 (1)

to investing in Australia's foremost
investment opportunity
A COMPREHENSIVE GUIDE

Positive Real Estate
2
SUMMARY
With many investors priced out of the Sydney and Melbourne
property markets, the appeal of purchasing in a capital city at
a meat-and-potatoes price point, while also promising capital
growth, is becoming a mission not dissimilar to the quest for
the holy grail.
However, it’s not all doom and gloom for property investors
just yet. Brisbane is offering punters the opportunity to
invest in the next capital city forecast to boom, offering blue
chip property just minutes from the CBD at an incredible
entry price point. With high infrastructure spending in
the local area, premium rental returns and promising
forecasts of capital growth, this up-and-coming world city
is finally getting some well-deserved time in the spotlight after
almost a decade living in the shadows of Australia’s former
heavyweights.
This research report has collected data from RP Data, URBIS,
Australian Bureau of Statistics, and the Queensland
Government Statistician’s Office, as well as relying on our
own analysis to provide you with a comprehensive report to
complement your own investment due diligence.

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WHY BRISBANE IS THE
“NEXT BIG THING”
Queensland is Australia’s growth factory. Natural beauty,
economic strength and the unbeatable lifestyle continue to
attract more interstate migrants to Queensland than to any
other state.
Over the past century, Australia’s third most populace state
has evolved into a mature, robust economy built on agriculture,
natural resources, construction and tourism. Today, services and
tertiary industries are increasingly driving Queensland’s growth.
The thriving services sector is primarily metropolitan based and
is the driving force behind a cosmopolitan renaissance across
Queensland’s major urban centres.
Southeast Queensland has consistently been the
fastest growing region within the fastest growing state
in Australia. At the epicentre of this growth has been
Queensland’s flourishing capital, Brisbane. Brisbane’s lush
greenery is in stark contrast to its industrial heart. Complete with
a large seaport and one of Australia’s fastest growing airports,
Brisbane is the gateway to the State’s mining, agricultural and
gasindustries.BrisbanehostedtheprestigiousG20Summit
in November 2014, completing the city’s emergence as a
true world city.
Nowhere are the rewards from Brisbane’s enormous public
transport and cultural investment programs more evident
than the inner city. The five-kilometre radius surrounding
Brisbane’s buzzing CBD boasts numerous residential suburbs,
hallowed sporting grounds and award winning outdoor spaces.
The following is our review of the current market
drivers and how they are impacting Brisbane’s
investment property potential.

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MACRO PERFORMANCE
DRIVERS
Population growth is the largest driver of real estate.
Residential property relies on population trends for capital
growth, as people need shelter, and with greater population
comes greater demand. Sustainable population growth
is essential for residential real estate markets to
prosper. Queensland’s lifestyle and career opportunities have
consistently ensured the state is one of the fastest growing
in the nation. Brisbane is one of Australia’s fastest growing
capital cities, forecast to grow by 247,537 people in the CBD
alone within less than 20 years.
POPULATION GROWTH
POPULATION OF
GREATER BRISBANE
2,238,394
(Source: ABS 3218.0, Regional Population Growth,
Australia, 2012-13)

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(Source: URBIS & ABS 2013)
The Australian Bureau of Statistics (ABS) predicts that
within 40 years, Brisbane will reach Melbourne’s current
population size of 4.3 million people.
(Source: Commonwealth of Australia 2015)

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Employment growth is necessary to attract and maintain
population and housing demand. Low unemployment and
high-wages mean more disposable income and the capacity
for tenants to endure rent increases and owner-occupiers
to pay more for their homes. Where there is a wage growth,
you will often find property price growth. Variety of industry is
necessary, as you don’t want to be on the tipping point of a
transient workforce departing the area or a major industry or
employer shutting down.
EMPLOYMENT
GROWTH
(Source: NIEIR, 2009)
By 2031, Brisbane has a vision to be
regarded as a top ten-lifestyle city
and global hub for resource and
related service industry businesses, with
strong business and cultural links with
Asia. The Brisbane CBD has the highest
level of employment growth with inner
city suburbs following close behind.
Employment is an important driver as
people want to be close to jobs.
CURRENT JOBS
331,228
JOBS IN 2031
532,736
GROWTH
2.8%
NEW JOBS
201,508
(Source: URBIS 2013)

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More jobs equates to higher rental demand and increased
accommodation requirements. The large and growing working
population creates a substantial captured rental market.
TOP TEN INDUSTRIES BY EMPLOYMENT
Health care and social assistance
Retail trade
Manufacturing
Professional, scientific and technical services
Construction
Education and training
Public administration and safety
Accommodation and food services
Transport, postal and warehousing
12%
10%
9%
8%
8%
8%
7%
6%
6%
(Source: ABS, Census of population and Housing, 2011)

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The greatest gauge for a market is the consumer habits of the
people that are in it. Multi-demographic pressures on inner city
suburbs are a huge growth driver.
Brisbane LGA is geographically constrained to see greater
urban sprawl and as such will see much of this resident growth
accommodated intoinfillandhigher densitydwellings. Brisbane
now accounts for approximately half of Queensland’s
population. At the current growth rate of 43,300 persons per
annum, 16,000 new dwellings are required each year just
to maintain equilibrium.
DEMOGRAPHICS
Over the past decade Brisbane
has recorded excellent population
growth of 3.6% (CoreLogic 2015).
AVERAGE BRISBANE
LGA RESIDENT
34
(Source: Census 2011)
AUSTRALIAN
AVERAGEVS
37
$1547 $1234
$350 $285
8% 4%
29% 19%
5.3% 5.6%
28.3% 27.7%
Age
Weekly
household
income
Median
weekly rent
University
attendance
Bachelor or
higher degree
Unemployment
Born overseas

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While overall immigration to Brisbane
has slowed in the past few years,
natural increase (birth and prolonged
life expectancy) has been the largest
contributor to population growth.
Between 2013 to 2014, natural increase
boosted Queensland’s population
by 34,510 people (62,350 births minus
27,840 deaths).
NUMBER OF RESIDENTS (MOVING ANNUAL AVERAGE)
According to the Australian Bureau of Statistics
(ABS) in 2014, natural increase accounts for
48.9% of Brisbane’s population growth, ahead
of overseas migration (42.9%) and interstate
migration (8.2%). While natural increase promotes
an aging society, Brisbane’s large percentage of
overseas migration keeps the overall population
median age low. Close to 78% of overseas
migrants in 2014 were aged between 0 and 29
years. Without this net migration, the median age
of Queensland would be much older.

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Another key driver is the number of occupants
living in each dwelling. This frequently forgotten
statistic can contribute significantly to housing
demand. With a change in living trends, single-
person households are expected to increase by
2.2% per year across Australia. This will result in
single-person households becoming a bulk 28%
of households by 2031. The average number of
people per household is expected to decrease
from 2.6 in 2006 to 2.4 in 2031. This means that
the number of dwellings needs to exceed population
growth to keep up with demand.
OVERSEAS MIGRATION ARRIVALS BY AGE
BRISBANE CITY LGA (2013)

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Buyer demand is showing consistent growth, which is fuelling competition amongst buyers and driving
price growth.
u Brisbane home values increased by 4.8% over the twelve months to March 2014
u Home values increased by 2.9% in March 2014 and they are 1.5% higher over the
past three months
u Over the past twelve months, house values have increased by 5.1% compared
to a 1.7% increase in unit values
u 66% of Brisbane homes are owner-occupied versus 34% that are rented
DEMAND
PERCENTAGE CHANGE IN TOTAL HOUSE AND UNIT SALES
(Source: RP DATA 2014)
The largest improvements in buyer demand can be found in
Brisbane, with sales jumping 24.2% in 2014.
VENDOR DISCOUNTING
As of April 2014, vendor discounts sat at 5.4%
in Brisbane compared with 5.6% across the
combined capitals benchmark. Average selling
time remains higher than average but has been
consistently trending lower.

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COMBINED CAPITALS BENCHMARK
Brisbane is experiencing a reduction in listings, which
adds pressure to property prices. In April 2014, there were
just 19,000 homes for sale in Brisbane, 30% lower than the
September 2012 peak.
BRISBANE EFFECTIVE SUPPLY LEVELS
MEDIAN HOUSE PRICE VARIATION (FEBRUARY 2015)
u Brisbane House $480K Unit $388K
u Perth House $540K Unit $433K
u Melbourne House $605K Unit $470K
u Sydney House $850K Unit $630K
(Source: Corelogic)
The median house price shows that investors
will be turning to Brisbane as there is room
for capital growth, especially when compared to
other capitals.

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MEDIAN HOUSE AND UNIT PRICES
Cities that have experienced excellent
capital growth are becoming relatively
unaffordable to the average investor
and homebuyer. The typical Sydney
house price is now $850,000, which
is 14.8 times the Australian median
salary ($57,400). Affordability barriers
are likely to cause more buyers to
consider more affordable housing
markets, such as Brisbane.
Rental yields have been severely compressed
in Melbourne and Sydney as dwelling values
have outpaced rents. Across Australia,
investors are negative gearing as the
average rental yield is 3.8% for houses and
4.6% for units. Brisbane’s average rental
yield sits at a comfortable 4.6%, meaning
Brisbane investors will have more cash
flow and improved serviceability as a result.
GROSS RENTAL YIELDS
Houses Units

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VACANCY RATES
Brisbane has lower vacancy rates than Melbourne
and Perth, which puts more pressure on rents
and increases rental yields.
INNER BRISBANE IS ATTRACTING SUBSTANTIAL RENTAL PREMIUMS
CHANGE IN WEEKLY UNIT RENTS
(past five years)
MEDIAN WEEKLY RENT
INNER BRISBANE MEDIAN WEEKLY
UNIT RENTS
The majority rental demand is innercity
as people are willing to pay a
premium for apartment city living.

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The Australian economy and housing market are
broadly correlated Gross Domestic Product (GDP) is
the most widely quoted measure of economic health.
Whilst the relationship is far from perfect, in periods
of stable economic growth, the Australian housing
market generally outperforms. Australia has avoided
recession since the early 1990s, a miraculous economic
performance reflected in the housing market.
The Queensland economy has consistently
outperformed that of every other state including
Western Australia since the 1980s. Queensland’s
economic expansion has sustained above-
trend population growth and been highly
supportive of the residential property market.
ECONOMICS

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The construction industry accounts for
approximately 15% of the Queensland
economy. The favourable construction outlook
is linked to population growth, the ongoing LNG
boom, continued coal mining development and
inner Brisbane’s urban renewal and continued
process of gentrification. With LNG projects
dispersed through out southeast and central
Queensland, many companies have chosen to
place their head offices in Brisbane.
The resilience of Queensland’s economy is
testament to its management and strong diversity.
It is built on four pillars of strength:
1. CONSTRUCTION

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2. TOURISM
Tourism pours $2.8 billion into the
Queensland economy every year.
Brisbane is the tourism hub of
Queensland, with 992,000 international
visitors in 2013. The city’s appeal to
professional and leisure travellers
alike is unquestionable, usurping
that of both the Gold and Sunshine
Coasts. Brisbane’s world-class facilities
and international airport make the
city an ideal staging point for travels
within Queensland – especially as the
destination is just one-hour from Gold
Coast, Sunshine Coast, Moreton Bay
Marine Park, five theme parks and two
casinos.
Queensland’s economy was built on
agriculture. The industry remains an important
pillar to this day. Queensland excels in the
production of beef, sugar, cotton and wheat
with the industry as a whole generating S14 billion
per annum as of November 2014.
3. AGRICULTURE

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In line with Brisbane’s goals to be a leading world
city, Queensland has committed to $134
billion to developing infrastructure projects
to 2031.
This is the largest public infrastructure
spending in Australian history. The following
infrastructure projects are currently under
construction.
4.INFRASTRUCTURE
ROAD & TRANSPORT
Brisbane has the second lowest car usage of any Australian
state capital. The city has an ongoing commitment to public
transport, bikeways and effective urban planning. Brisbane
has invested heavily in a highly efficient bus network to
compliment the existing rail, CityCat and ferry infrastructure.
u MORETON BAY RAIL LINK $1.15 BILLION
Employment during construction: 8000
The Moreton Bay rail link will complete in 2017. The major
project consists of six new stations along 13 km of track linking
Redcliffe to the existing Brisbane rail network. The project
will provide the substantial Redcliffe commuter base with an
alternative method of highly efficient transport into Brisbane
City.
u BRISBANE UNDERGROUND BUS AND TRAIN TUNNEL
$5 BILLION
The proposed Underground Bus and Rail project will provide
Brisbane with a much-needed additional river crossing. This
project includes a dual-purpose tunnel under the Brisbane
CBD and Brisbane River. The new station on George St in
the heart of the CBD will be the first underground station in
the city. Construction is expected to commence in 2015 with
completion scheduled for 2020.
u GATEWAY UPGRADE NORTH $1 BILLION
The Gateway Upgrade North project includes the upgrade
of Gateway North between Nudgee Road and Barrett Street
northbound, and Depot Road southbound. The improvements
will include widening from four to six lanes and the installation
of managed motorway treatments and cycle facilities. The
Gateway Motorway is Brisbane’s primary economic road
corridor, providing direct linkage to the Port of Brisbane
and the Australia Trade Coast, and to the Bruce Highway.
The project will alleviate severe congestion, enabling faster

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and more reliable movement of freight between ports and
connecting production and distribution centres and markets,
resulting in improved economic growth and reduced input
costs for industry and businesses.
u LEGACY WAY $2 BILLION
Legacy Way is a 4.6 kilometre road tunnel that will connect
the Western Freeway at Toowong with the Inner City Bypass
at Kelvin Grove. Legacy Way will reduce travel time between
Brisbane CBD and the Western Suburbs by approximately
fourteen minutes, helping commuters to avoid seven sets of
round abouts and other traffic delays.
u BRISBANE AIRPORT PARALLEL RUNWAY PROJECT $1.3
BILLION
Employment once operational: 7800
Brisbane Airport is predicted to be Australia’s fastest growing
major airport over the coming 15 years. Passenger demand is
currently growing at 11% per annum. A pipeline of major works
is underway to prepare the facility for annual international and
domestic passenger movements of over 50 million by 2030,
double current capacity.
Construction on the duplicate runway commenced in May
2014. Scheduled for completion in 2020, the project should
create 2,700 jobs at its peak. The additional passenger
capacity at the airport will act as a catalyst, facilitating the
creation of 7,800 jobs in the region over the coming decades.
Brisbane Airport has emerged as a major FIFO hub servicing
the coal, LNG and minerals industries. Doubling capacity will
cement the airport’s position as the gateway to Queensland’s
tourism and resources industries.
HEALTHCARE
Brisbane offers a world-class range of healthcare services.
The city boasts an extensive list of public and private hospitals.
Investment in these facilities and in educating Queensland’s
best and brightest to work within them is ongoing.
u LADY CILENTO CHILDREN’S HOSPITAL $1.5 BILLION
Construction of the Lady Cilento Children’s Hospital is one
of the biggest infrastructure projects underway in Australia.

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Located in South Brisbane, the Lady Cilento Children’s
Hospital will provide specialist paediatric care for children
from birth to 16 years of age (up to 18 years for established
patients). The new hospital will be the single specialist
children’s hospital for the state, owned and operated by
Children’s Health Queensland.
CULTURE
u 1 WILLIAM STREET $653 MILLION
1 William Street is a modern-style skyscraper office building
located in the Brisbane CBD in close proximity to Parliament
House. The building is part of the government’s plan for a
renewed Government Administrative Precinct and to meet its
accommodation demands.
u KELVIN GROVE URBAN VILLAGE $1 BILLION
The Kelvin Grove Urban Village is a partnership between
the State Government and Queensland’s largest university,
the Queensland University of Technology (QUT). The award-
winning development continues to set new benchmarks for
integrated urban development. Kelvin Grove village is the
place where those who enjoy new experiences in the arts,
culture and technology flock.
u NEWSTEAD GASWORKS DEVELOPMENT $1 BILLION
Newstead’s Gasworks development is a 17-hectare industrial
rejuvenation project. The development includes 100,000
square metres of office space and 20,000 square metres
of retail space in addition to a limited number of new
apartments. Stage Two of the community is currently under
construction.
u NORTHSHORE HAMILTON $175 MILLION
Northshore is Brisbane’s largest and most exciting urban
renewal project, covering an area larger than the Brisbane
CBD. Northshore has already blossomed into a fully inclusive,
self-contained community featuring dedicated riverfront
space, cruise ship facilities, CityCat terminals, expansive
parkland and community areas are outstanding residential,
retail and commercial developments.

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u BRISBANE SHOWGROUNDS REDEVELOPMENT $3 BILLION
The Brisbane Showgrounds Master Plan will combine the
site’s rich history with its future potential. The regeneration
will ensure the site becomes a destination synonymous with
events, fashion, design, lifestyle and culture, hosting world-
class events and shows all year round.
CONCLUSION
Overall, Brisbane has all the strong characteristics
ofacapitalcitymarketsettoflourish.Withstrong
industry, population growth and infrastructure
investment, it’s a good time to get your money in the
Brisbane market.
While it hasn’t experienced the leaps and bounds
of Melbourne and Sydney, it won’t be long before
this marvelous city takes its rightful place on
the world stage as a leading capital.

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