Patience is a word that is not talked about enough in property investment if you ask me.
It really should be because it is patience that can make a big difference to your property wealth creation efforts over the years.
Many novice investors, who perhaps haven’t bought strategically in the first place, often throw their hands up in despair when their property hasn’t increased in value significantly after a few years.
Their frustration may well be warranted if they have purchased an inferior dwelling in a second-rate location, but often it’s that they are just not patient enough to let capital growth accumulate over time.
Now, the capital growth over the past year that happened concurrently across the country was unusual, so we need to recognise that it was the exception rather than the rule when it comes to traditional property market cycles.
However, some individual markets are likely to continue their run of superior results for some time yet, partly because of affordability considerations, but also because they have all of the economic fundaments that support future price growth.
Sunshine State shining
One of the areas that we remain bullish about is the Brisbane property market, where we have been purchasing for clients for a number of years already.
Over the past year, the median house value of the Sunshine State capital has increased nearly 28 per cent, according to CoreLogic, with forecasts of more double-digit price growth next year as well.
While more expensive locations such as Sydney and Melbourne are already appearing to experience slowing market conditions, the same can’t be said for Brisbane.
Indeed, over the past quarter, the Brisbane median house value was the strongest performer of all capital cities – rising by 8.2 per cent over a three-month period.
Part of the reason for the continued robust results in Brisbane is the ongoing demand versus supply imbalance, plus its affordability compared to many other major areas.
In fact, the total number of property listings for sale in the River City remains at a decade-low, while other cities are experiencing an increase in listing volumes.
While the low volume of listings is a major concern for many buyers, I continue to receive daily off-market listings from agents in Brisbane because of my professional networks across the region.
However, I have strict criteria about which properties make the grade as a strategic investment opportunity, which means that many of these so-called “opportunities” are never presented to clients because they just don’t have the cut.
Sometimes this is because the seller simply wants too much money for their property – even in hot market conditions.
Other times, it is because the property is located in an undesirable area, such as a location with the potential for oversupply; it’s situated too close to a highway; or it doesn’t fit the individual client’s criteria, such as requiring too much additional cash flow because of ongoing maintenance needs.
There is no question that Brisbane property market remains a seller’s market, but that doesn’t mean anyone should overpay for a property.
The reality of the situation is that it still remains an affordable investment area, but the buy-in price point has shifted from about $400,000 to $500,000.
As well as the price uplift over the past year, the region continues to be suffering from a critical undersupply of rental properties, which a vacancy rate of just 1.4 per cent, according to SQM Research.
There are thousands of people migrating to the city every month from other parts of the nation as well – chasing lifestyle and affordability – which is putting additional pressure on weekly rents and sale prices.
More growth ahead
So, as we head into a holiday season that we have all been looking too very much, I just wanted to reinforce why Brisbane property market will continue to be our buying focus next year.
There is plenty of growth yet to come for the region with its rising market cycle only just beginning in my estimation – however, patience is also required.
At the end of the day, it is those investors who show patience who are set to benefit the most from the positive trajectory that lies ahead for the Brisbane property market.