The herd mentality manifests itself in many ways. You can see it in the sudden rise of a popular restaurant or night spot. A word of approval from an influencer can be enough to set off a stampede of followers all clamouring to be in the right place.
Trouble is the stampede can quickly turn it into the wrong place, overcrowded and diminished by over-popularity.
It’s a phenomenon that you see often in real estate. A hot spot emerges because it has a certain charm and being undiscovered, offers value. Once the secret’s out more people pile in, prices rise and very quickly supply responds to a point of over-supply at inflated prices. The question for the herd is whether to stay and graze a while or pack up and move to where the grass looks greener.
In the meantime the glowing headlines that talked up the market turn savage once there’s a hint that the boom has turned to bust.
If you believe everything you read, and in these days of often poorly informed and social media led public commentary this is never recommended, the Brisbane property market is struggling – ominous signs of a glut, prices tumbling, rents softening. But that’s certainly not the whole story and not the way our offices in Queensland are experiencing it.
Kim and Gary Olsen, Principals of R&W Clayfield, an inner-city Brisbane suburb notable for its charming weatherboard Queenslanders that carry price tags of $1 million to $2 million, sees only positive signs for Brisbane property.
The big thing that Brisbane has in its favour is affordability – something that Sydney and Melbourne lost some time ago. Brisbane prices are running at a 60 per cent to 80 per cent differential to Sydney’s yet the wages are only 5 to 6 per cent lower on average.
That’s a clear advantage which is reflected in the high level of interstate inquiry from Sydney and Melbourne buyers looking for an investment or planning a permanent northern migration.
The northern corridor tracking from north of the Gold Coast, to Brisbane, up to Caboolture and the Sunshine Coast is booming. With public transport making commuting a viable option for city-based workers and plenty of infrastructure investment there’s a sense that where Melbourne and Sydney have gone, Brisbane will follow.
The property picture in South East Queensland is much more nuanced than a quick read of newspaper headlines would suggest. Certainly there are some pockets where the supply demand balance is out of whack but well-seasoned investors will view that in the context of the usual peaks and troughs of the property cycle.
The Richardson & Wrench Queensland offices have built their businesses around providing clients with advice that comes with having seen and experienced the vagaries of several property cycles in real estate, knowing where the value lies and what to avoid.
Right now there’s no shortage of demand for a house and yard in a location that requires only a short commute to the Brisbane CBD. While homes in Kim and Gary’s territory are commanding seven figure sums, travel 10km from the city centre and a new two storey home can be bought for under $700,000. In a suburb 30 km distant with a train line you can find a home for under $500,000.
It’s the Brisbane apartment market that has generated much of the often ill-informed and unwarranted negativity, and for those who have gone into this market with an eye to the strong future prospects for the Brisbane property market it is likely these investments will pay off in the long term.
Our Queensland offices predict that by late 2018, we’ll be talking about a looming shortage of apartments and the negative and unbalanced press coverage of the Queensland property market will be a distant memory.