Cracking the CBD code.

To this, investors add the high demand for housing, strong rental yields, capital appreciation, economic resilience of major cities, and a stable asset class in their investment portfolio.

By the end of last year, close to 70 per cent of Australians resided in the eight capital cities, and beyond the capitals, urban core living was rising in other centres like Geelong, Gold Coast and Sunshine Coast.

It’s widely mooted that the Brisbane 2032 Olympic and Paralympic Games will bring growth across the city’s residential, commercial, retail and industrial sectors. Is the Brisbane inner-city property market set for Olympic-driven surge?

Rohan Banning says while Brisbane CBD is the prime focus for owner occupiers and investors, there’s a lot to indicate that, as space become more and more scarce in the CBD, inner city suburbs like Herston, Bowen Hills, Fortitude Valley and Kelvin Grove will become vibrant, high-density urban areas.

“With the upgrades happening to transport hubs, these suburbs will be well-connected to the new 63,000-seat Victoria Park Stadium, the Athletes’ Village, and the National Aquatic Centre, for instance.”

He says property investors are keenly watching Brisbane markets, but it’s not the only major city in the country that offers opportunity.

“I’d be weighing up growth potential, infrastructure investment, liveability, and affordability if I were choosing an Australian city property market to invest in right now.

“Naturally, it’s hard for me to look past Brisbane for its strong population growth, infrastructure investment ahead of the 2032 Olympics, and relatively affordable compared to Sydney and Melbourne.”

As well as the previously mentioned suburbs, he suggests looking at Woolloongabba, Spring Hill, and Albion.

“These precincts will be some of the most sought after as a result of the new CBD and Olympic infrastructure that we’ll see,” he said.

Market watchers also like Adelaide with its steady growth, an affordable market and strong rental yields making it a contender. Suburbs including Prospect, Norwood and Unley are appealing to CBD investors.

Perth is seen as still relatively undervalued while having growth drivers. Baldivis, Como, Victoria Park and coastal areas like Scarborough are drawing attention.

Around Melbourne, outer growth corridors like Werribee, Cranbourne appear to be gaining investor interest as are regional satellites like Ballarat or Bendigo.

Can the first-time property buyer find a foot hold in a CBD?

The city residential specialist has helped many into their first home or investment.

“We sell a lot of one-bedroom apartments to first time buyers because they are generally more affordable while close to everything they need. They don’t need a vehicle, so lack of a car space reduces the price.

“Living in the city often puts them closer to career options, networking, and higher-paying jobs; and first-time buyer incentives like stamp duty relief, low-deposit mortgages, or shared ownership are common with off-the-plan apartments in the CBD, plus there’s the possibly of renting out a room to help cover the mortgage.

“The first-time buyers and investors are fierce competitors for the one- and two-bedroom CBD apartments, in fact,” Rohan said, “and buyers are sole young professionals through to families.

“This month, for example, I’ve sold a $500,000 one-bedroom apartment to a first home buyer and a $2.8million three-bedroom apartment to a family. In both cases, these will be owner-occupied.

“CBD-buying can be a smart long-term financial move because property values in cities often rise faster.”

Rohan says CBD property investors need to be as open to the hurdles and challenges as they are to the appeal, and take into account matters such as:

• When borrowing for an investment property, lenders may have policies relating to size; and while 50 square metres is common acceptable in floor area, that’s internal space, and not inclusive of balconies or car spaces.

• There are costs associated with apartment buildings. Strata fees reflect high-cost things like lifts, window cleaning, pools, spas and gyms, plus concierge and /or security costs.

• Buyers need to find out about civil infrastructure projects and other planned residential buildings and should check with city council’s planning department. The value of the apartment with the great view might lessen when the neighbouring apartment building is approved. Loss of view can be devastating, but nobody ‘owns’ a view.

• Be aware of long term and short stay rental accommodation policies.

• Due diligence should alert the investor to any problems and expenses on the horizon.

• With off-the-plan purchases, buyers need to be on top of such things as pricing schedules, rebates, contract prices, material changes and sunset clauses, for example. Off-the-plan sales are not for the uninformed.

Rohan Banning says much of the advice he shares with first-time buyers also applies to investors.

• Get pre-approved for a mortgage so you know your budget.

• Explore up-and-coming areas for better value and potential growth.

• Use available incentives to reduce your financial burden.

• Be ready to act fast but do your due diligence—check the lease, local plans, and building condition.

• Work with a local real estate specialist who knows the city’s micro-markets very well.

   

Rohan Banning is Principal at REMAX Central Residential and lives in the heart of Brisbane CBD himself.