With Sydney coming off the boil at Melbourne potentially reaching it’s peak, now could be the time to invest in Brisbane. Here are 10 positive indicators as to why you should invest in the Brisbane property market.
Usually we don’t talk specifically about individual property markets, myself and Ben Everingham, we prefer to talk about the skills when it comes to being an investor and what you can do and successfully apply in any market, but at the moment there’s a few things happening with Sydney coming off the boil. Melbourne potentially reaching its peak and so in this episode we wanted to look at 10 reasons to invest in the Brisbane property market. So say I got buyer’s agent Ben Everingham on the line. Hey Ben. Thanks for coming on. Hey Ron, how are you? Good, thanks. And for those of you who don’t know, ben has been working as a buyer’s agent in the southeast. Queensland market has purchased now over $150,000,000 worth of property for himself and his clients and so he’s been in the thick of it, buying a lot of properties in high quality suburbs in southeast Queensland. He knows all about this. I get a text today saying, dude, I’ve got some really exciting updates that I want to talk about. So we decided to record this episode on the Brisbane market and we hope that you guys enjoy it. So Ben, before we get into the 10 reasons, what is it just overall give us like an overall summary. What excites you about the Brisbane market so much?
It excites me as such an analytical process orientated by heart. Just how good these 10 different things look right now in Brisbane. Now it’s not going to be crazy everyone in Australia rushing into the marketplace because we know that’s gonna happen after we had our first 10 percent year up here, but to me it looks like the start of a turn in the cycle for Brisbane and you know as someone who times Sydney accidentally perfectly time the central coast accidentally perfectly and then moved into Brisbane three years ago because I understood what was happening in Sydney and Melbourne and what’s now beginning to happen in Brisbane. It excites me, man, like this is what property investing is all about. Like understanding using data to make smart decisions and then making smart decisions and making some money so that we have choices in the future to live the life that we want to lead.
Yep. And so I’m really excited about this episode as well because it is different to what we usually talk about, like empowering people to be able to go out and do this themselves, but you know, sometimes some of these insights you just, the average investor isn’t going to realize or going to see. And so whether people are looking to invest in Brisbane or not, I think this is going to be a really interesting episode to look at these indicators and then people can apply them to Brisbane or they can apply them to other markets as well. But yeah, I think, I think this is going to be a good one. I got a good feeling about this.
I’m going to make. I’m going to make data fun today. Like let’s have a good time with this because for all of you guys that aren’t like data hungry, like May, you know, this is good stuff. Then I just, regardless of if you buying on your own with someone else investing or not investing, you need to know this stuff about prison right now. Yeah, and something you need to know about ben is that he just gets off on the data. He just loves it. I get emails from all the time
with all these data points in there. I got to, I got to siphon through it to try and work out what the hell is dude talking about? The substance of it. Yeah. There’s so many numbers here, but no, this is gonna. We’re gonna. Make data fun today. This is going to be good. So. So let’s jump into it. And point number one that we have is just the history of Brisbane looking at the longterm history. So over the last 20 years and last 40 years. So John, talk a bit about that.
There’s a huge misconception of where value lies in Australian market and where different markets and the reason for that is people have a ridiculously short term memory and I don’t study history, you know, we cannot predict the future, but we can study the past and used that information to make better decisions moving forward. And so what’s interesting from looking at the history, and this isn’t my data way, Rick, they saw send it through to Ryan. Ryan pulled some of it together. I pulled some of that together and we’ve basically used that from homely, from our pay data and also from um, who else was the Australian Bureau of stats to sort of pull together. And what we did is we looked at every single year on year of Sydney, Melbourne and Brisbane markets in the last 10 years, 20 years and 46 years. And what we’ve found is that in the last 10 years, Sydney has been the number one been number two in Brisbane’s done atrociously, which I love.
No, it doesn’t mean that Brisbane’s going back right. It just hasn’t done as well as Sydney in.
Yeah. Like, you know, if you had a dollar to spend 10 years ago, hopefully he put it in Sydney, if you’ve got a dollar today, hopefully you put some of that into Brisbane in the next 10 years and you ride a little bit of growth through that market, but in the last 20 years, what was really interesting to me because as a Sydney person myself with a massive bias of that market, because that’s the constant story we’re hearing. When I looked at 20 years worth of data year on year, I realized that Brisbane, Sydney, and Melbourne had all done almost exactly the same, which is eight point five plus percent per year. And then when we took a longer term view, and I’m not saying that eight point five percent is like realistic for the next 20 years. I think those good old days of property doubling every 10 to 15 years might be over.
But if I take a longer term view and gave the last 46 years, what I realized is that Brisbane has gone up by over nine point seven percent per annum for 46 years. Wow. Remembering we’ve been through three recessions or depressions during that period of time. We’ve gone through five or six major floods up here. We’ve gone through all this stuff and what was even more interesting is when I looked at Sydney and Melbourne over the same time they had done slightly less so brisbane was actually the top performer, I think it was Scott News over the weekend was also having a story on Brisbane being the top performer in the last 50 years in Australia. So it’s just good to understand your history because you. You don’t rule out marketplaces that have longterm potential to perform very well, but just like Sydney prior to the last six years where Sydney was flight for nine years, Brisbane is just gone through that flat nine year period. It could last for another three or four years, but at some point it’s going to represent really good value.
Yup. And so I think, yeah, it’s very important to look back on the history and the longterm history just to see that markets have potential and see that they can consistently deliver growth versus markets that you look back on. And sometimes the liver growth sometimes don’t and so it’s pretty cool to see that Brisbane’s in line or above Melbourne and Sydney over that 46 year period,
which you wouldn’t expect. Like there’s such a Sydney and Melbourne because Melbourne still doing wildlife. We’ve just got to get rid of this short term perspective as investors I think. Yep.
And so the second one that we wanted to look at was the growth that we’ve just had recently. So we’re, we’re now jumping from the super longterm, looking at that data to now looking at super short term. We’re talking about the last quarter now, so the last three months of data and Brisbane’s just gone gangbusters basically.
Yeah. So depending on whose data you’re looking at, again, this is information that was just published in the latest, your investment property May, but they’re suggesting that houses in Brisbane have gone up by two point nine percent in the last quarter, which is the strongest quarter of growth we’ve had citywide in over 10 years. So That’s interesting to me. You’re always as an investor looking for indicators of when to enter and exit markets. And that’s a very, very, very, very strong quarter considering we almost haven’t had two point nine percent of growth in a year for the last 10 years. You know what I’m in? Yep. And, and don’t get me wrong, Brisbane is like Sydney and Melbourne. There’s suburbs in Brisbane in the last 10 years that have gone up by eight percent per annum. There’s other suburbs that have gone backwards. There’s a lot of suburbs in the middle that have done three or four percent and a lot of others that have done absolutely nothing but averages are important because that’s the only story of the public gets from the media. And the averages are what draw the crowd. Think about Hobart. Hobart can do 40 percent in the last four years. You know, my mind is just blown by life. This stupid shit. Australian investors really entering marketplaces that may or may not represent value. Yep. Long time.
And that’s something that I think we should note at the moment, is that when we talk about the Brisbane market, we’re not saying just go and put your money anywhere into Brisbane or even to put your money in Brisbane at old. This is not financial advice in any way, but this is something good to look at to, I guess really narrow your focus and to start looking at the Brisbane market and then looking at the suburbs within that market. So to really focus your research. So we’re not saying that just go put your money into any property in Brisbane and you’ll do well because we both know that that’s not true. You’ve got to find the right property in the right suburb, but this can help you narrow it down
without a doubt. And there’s suburbs in Sydney that will smash the performance at Brisbane even though on average Brisbane’s on the rising market and savings on the decline, you know, over the next five years without a doubt. And that’s why as investors, you know, following the trends is cool. But following the data in the suburbs is way more important.
Yeah. And something really interesting to look at with this two point nine percent growth over the last quarter. If we keep up this growth, we’re going to see double digit growth over the course of a year. So by double digit, I mean more than 10 percent growth. And when me and Ben looked back on the data the last 46 years of Sydney, Melbourne, Brisbane and Adelaide, I think it was whenever a city had their first year of double digit growth. So first year of growth, over 10 percent were the previous year. It was under 10 percent. It was 18 out of 28 times that that had happened that the second year was also a double digit growth year. So that’s a 65 percent chance of two or more double digit years. Or in the past, obviously we can’t predict the future, but looking at past results, 65 percent of the time where we had that double digit year, it was followed by another double digit year and it was 25 out of 28 times in that period that the market value never actually dropped below that purchase price. In the first double digit year. So, um,
yeah, just really, really, really, really important. Like I was jumping out of my skin when we found that or you found that indicator in that data because you know, that’s, that’s a powerful one. You know what I mean? Um, that’s powerful if you know that you can jump on the bandwagon after 10 percent year and rolling the dice if you actually picked the right suburb and the right market, but the true right time you can, you can end up profiting from that information in a really big way.
Yeah. Well it’s all about minimizing your risks and maximizing your chance overturn. And by looking at the history and looking at trends in the past, you’re not guaranteeing anything for the future, but if you look at something that seems to consistently happened in the past, chances are that it make consistently happen in the future or at least, you know. Yeah. So you’re minimizing your risk of downside and then you’re maximizing your chance of upside if things continue like they have.
And if we look at the future, like I just went to a Michael Master masterclass, which you’ve talked about before, but 75 percent of Australia’s population and job growth is gonna come in Sydney, 25 percent, 25 percent Saturdays Queensland and 25 percent in the next 10 to 20 years. Your role in the buying any other market than it is because you’ve got everything else in Australia like going on at, you know, 25 percent spread out the rest of Australia. I just, I don’t want to play those odds because as you said, you’re trying to minimize your risk and maximize your longterm return. And so let’s move on to, on to
point number three. And that’s the Herron Todd white month in review report, which we both highly recommend people check out. It’s a free report. Just go into Google type htw month in review report and it’ll come up, check it out because obviously we’re recording this. You might be watching it in the future. Things might change, but at the moment in the Herron, todd white report, Brisbane market is in the rising market. And so I’ll go ahead and put that up over the video so people can see it, Ben, but do you want to talk a little bit more about this report just so people get an idea of, of why we like it so much. What’s,
yeah, this report is, it makes understanding the Australian market as a whole, very, very simple. It’s a clock, a property club for houses and there’s a property club for Deanna and effectively it looks at all of the capital cities and all of the regional markets in Australia or the major ones. And then, you know, 12:00, Bang the top of the cycle, um, you know, between 12 and 6:00, Bang that decline that we’ve seen Darwin and Perth and in recent years, um, you know, off the bottom to non to 9:00 effectively is like, you know, started the recovery off the bottom and then between 9:00 and 12:00, these were sort of Sydney and Melbourne have been in those reports for the last five years. And that’s when you make money and things don’t always go perfectly as planned. And you know, areas get upgraded. And downgraded, but it’s a really nice, easy way to keep your finger on the pulse as an investor on a monthly basis, look at the clock and then rate each of the individual areas that you’re interested in just to get another perspective on West offset. And you know, your job isn’t to look at something as a silver bullet and trust that it’s to get different information from a range of different sources and then make up your own mind.
Yeah. And what do you think about looking at the housing clock versus the units clock? Because we’ve got Brisbane, we’re talking about the houses. So Brisbane’s in the rising market. In the houses.
Yeah. And then units are probably.
And then you in declining market.
Yeah. So you know, as an investor, I only buy houses because I know houses outperformed units by one to three percent per year or that that’s the history of the last 30 years. So anyone buying units? Yeah, I understand why people buy them because they’re affordable, but I just, I just don’t want to lose one to three percent per year on my investment by targeting that product. So I keep a finger on what’s happening from a unit perspective, um, obviously the heart of the unit issue in Brisbane or hired the construction phase of a humanity issue was 2016, so, you know, over time with this new population coming in, it will be absorbed and the unit has been picked up in Melbourne and it’s absorbed now by the market to. There’ll be a unit issue within 12 to 24 months in Sydney without a doubt. Um, you know, it’s just develop as a greedy. They oversupply, there’s an oversupply of process decline and then, you know, people pick them up and then there’s a shortage and then they’ll go and build team anymore. Again. It’s just a cycle of development, you know what I mean?
Yep. And so, alright, so that covers the herron todd white month in review report. The next one is server interesting. And it came out in a video that we had previously recorded. We’re looking at some data, can’t remember it was from Michael [inaudible] master class or if it was from something else, but basically ben had pulled data and emailed me, which happens on an almost daily basis. Anyway, sorry. Um, but it was this idea looking at, I’m comparing the price of houses to average household income, but then also realizing that the household average household income in Brisbane is actually higher than that in Melbourne. Blow my mind what the, what the heck, right? You think Melbourne people in Sydney would earn the most on average? People in Melbourne would be a close second or maybe even first and then Brisbane would be a lagging third. But then to hear that people in Brisbane on average earn more money than people in Melbourne just seems ridiculous.
So that’s the important thing. Like there’s different ways that you look at this data, but you know, that’s, that’s incredibly powerful because we know that house process in Melbourne is 60 percent plus more expensive than they are in Brisbane, but the income’s a higher. So I laugh when people say like they don’t get this data that they’ve got a massive bias towards one market or another. Yes, Melbourne’s getting more population growth, but income wise, you know, population doesn’t always result in more income. So it’s, it’s, it’s powerful to know that, you know, again, just if you considering the three markets based on their timing right in the eye, these are the sorts of piece of information that gives you confidence to have a crack at a market but you might not feel as comfortable about because the media doesn’t want to tell you that story. Like the media doesn’t want to tell you that Sydney or Melbourne or on a huge decline or that those markets have run their course and the real estate agents that produce most of the content sure as hell with our businesses are dependent on it. I don’t want to tell you that stuff. So you’ve just got to get the piece or the snippets of information that come out and you know, make a judgment call from there.
Yup. And so that was really interesting. I think that’s really interesting. I hope people find it interesting as well. The fifth one was that there’s now more people moving into Brisbane then into Sydney or Melbourne,
so about once every 20 years it looks like Sydney and Melbourne get ridiculously on affordable and then we get this like massive mass migration north which macula. Tracy calls it the push factor and he doesn’t lock it anyway that I’m making money. I’m happy to make it, you know what I mean? Like from an investment perspective because that’s what it is. So it’s nicer when Brisbane’s pulling people in for jobs and. But right now they’re being pushed out of Sydney and Melbourne because of affordability. So I liked that. Like I love, I love the fact that there’s more people moving into Brisbane than Sydney and Melbourne from an interstate migration perspective, from an overseas migration perspective. Those Sydney and Melbourne is still capturing most of the, most of the people moving here from other countries. But you know, Brisbane’s population growth. 16, 2016 figures to 17. It grew by almost 50 percent, which is unheard of. And we know that Brisbane is going to be a city of 5 million people within 20 years, which is the current size of Sydney and Melbourne. We know that southeast Queensland is going to take 25 percent of Australia’s population in the next 20 years because it’s so affordable. That extra pressure and those people selling up down there and buying up here has to be a good thing. Yeah.
And that leads onto the next point number six, which is this report that you recently read from Macquarie Bank.
Yeah. So Macquarie Bank is sort of came out and published a report which was released on the ABC website suggesting that they believe 140,000 people from Sydney and Melbourne will move out of those markets in the next two and a half years. And then into the southeast Queensland market, which represents a wealth transfer of something like $8,000,000,000. So $8,000,000,000 is probably a quarter of the current southeast Queensland property market. So what you can expect from that, if that does happen, is about an extra 25 percent, you know, like how do I say this clearly, look at that, and I don’t want to say it in data terms because it’s going to be wrong, but
when people move they bring their money with them and a lot of those people will sell up their properties in Sydney and Melbourne to buy in southeast Queensland. So there’s a lot of wealth transfer out of New South Wales and Victoria moving into Queensland. What outer Sydney, Melbourne moving into Brisbane and if you’ve got more money and more demand in the market, then that naturally pushes prices up unless of course supply exceeds demand.
Correct. And at the moment with vacancy rates in southeast Queensland, lower than anywhere else in Australia right now in terms of properties for rent, you know, it’s probably a pretty good indication of where certain certain demand is for certain types of product as long as it’s on the beach in close to the city. Yup.
And so another important indicator which, um, we often look at when researching suburbs when researching markets is job growth. And so job growth in Brisbane is looking positive in the coming years.
Yeah. So again, according to those longterm projections by the Australian Bureau of stats and mark and tracy jobs, they’re looking solid. There was more jobs created in Queensland last year then they were created in both New South Wales and Victoria. So what’s interesting about the job growth, because I get this updates from sake and those guys provide you with some of the best data, like you know, if you’re subscribed to their weekly newsletter, a monthly newsletter, most of the time it’s completely irrelevant crap. That is like what you should do and writing, you know, applying for an interview or doing something like that. But when you get the insights on where different markets are at, job was what’s crazy about the three fastest growing industries in Brisbane right now, which represent a pretty decent chunk of the job growth is the average salaries have $140,000 for all of them were the average salaries of the fastest growing industries in Sydney and Melbourne right now have an average income of 70 to 80 k. So I like that stuff because like the mining related jobs are starting to kick back off in, in Queensland and a lot of those big companies that run those jobs or work out of Brisbane. So I heard from a client that’s in the industry, 3000 new jobs are just being created in one of those companies at the moment. Um, that’s pretty powerful stuff to sort of pull factor people into the end of the city.
Dude, it’s amazing here. 3,000 jobs like running small businesses like we do. Can you imagine trying to hire 3000 people at one time and they want to do it again.
Something like six months. Men saying crazy scary like onboarding or those people. And getting into function properly.
Totally. That’s like way outside of my scope of what I could do. All right. So we’ve talked about quite a lot of things. We’ve got a couple more to go. I think we’ve got three left at the moment. So the next one is infrastructure. So there’s a lot of infrastructure projects that are happening in southeast Queensland, Brisbane, Gold Coast, sunshine coast. I know we’ve got light rail happening and Gold Coast and sunshine coast. We’ve got new hospitals and stuff like that. You’ve got more of the data points than me, so I end up back over to you prepay slat rail on this
sunshine carries proposed light rail for Brisbane city where I will say getting Brisbane’s first, like cheered network or underground railway network. I think there’s six or seven stops playing to go underneath the harbor. Not the hardest. Sorry. The river, which you could probably throw a stain across compared to Sydney. Um, but yeah, it’s like, it’s, it looks interesting. I mean it’s, we’ve gone through the resources. Boom. Then we moved to the construction one. That government’s new priority to keep the Australian economy afloat is infrastructure, so look at Melbourne, Sydney, and Brisbane right now. There’s just so much potential infrastructure coming in. Same with Perth over the next 20 years. It’s just absolutely out of control. Infrastructure pays people, good wages, infrastructure, employees, paper in the local area. Infrastructure gets people moving and then staying in a place. So you know, universities, schools, hospitals, train stations, underground, massive road upgrades into an, out of the city. It’s all, it’s all good stuff. Yeah.
And so just so people know, it’s repurposed infrastructure so things change all the time. So try and keep on top of that. How would people keep on top of the infrastructure sort stuff as it changes?
Obviously you’ve got to look at the state government, Australian government website or the Brisbane city council website. The thing about these guys is they love talking about how much debt they’re going to get us all into. Like it’s like infrastructure and like $100, million dollar project and your life, you made $100,000,000 worth of debt that we’re paying back at four percent. You know what I mean, like that’s what you’ve got to actually think about infrastructure. Yes, it creates value, but it also puts us into a deficit as a country. So any infrastructure pins, cool. As long as everything’s good in a recession, it’s just more debt, but you know, more jobs, more good stuff going on. Making it a more livable places is positive. Yep.
And so alright, we’re nearly done. Number nine is the performance of quality areas in Brisbane. So I’ve seen some areas in Brisbane performed quite well in the recent years even though Brisbane hasn’t performed as well as Sydney or Melbourne. There are some particular areas in Brisbane that have performed exceedingly well.
Yeah, I mean there’s suburbs in Brisbane in the last five years that have grown by 30 to 50 percent and you know, the way that, the way to find that information is pretty simple like at the back of their property investment magazine or on, on Google. But what we’re seeing is that quality areas, particularly in the last 12 months, I’ve been buying here for three years, and as you said, board over $150, million dollars worth of property up here now. And what I’m saying is that quality suburbs close to the city with a strong owner occupier appeal or properties very, very close to the beach or starting to do significantly better than any other time that I’ve seen them do. And generally that doll turns first in quality markets. Um, so, you know, there’s suburbs that we’ve seen do nothing in the last 12 months. There’s other suburbs that have time to 15 percent and you know, drawing a ring around the city, it’s probably those 15 k’s suburbs that have done the best. So the suburbs directly on the water from about 30 K’s north of 30 k’s south. Yep.
And last but not least, is this idea of cycle timing. So we’ve, I think we’ve touched on this in a previous video or maybe you did, I can’t, I don’t know if we’ve talked about this. I know and you have talked in length about this idea, but just from Phil Anderson talking about the 18 to 20 year cycles and how when there is a recession and when there is a dialing back and then we move forward, you recognize that Sydney and Melbourne seem to move first in the first half of the cycle and then in the second half of the cycle, Brisbane and other capital cities tend to perform better in the second half of the cycle
as an absolutely epic update recently that I got enough from Rp data that I had done this. So what they did is they looked at each of the capital cities and regional markets in Australia over the last 20 years. I overlaid innocence global cycle on top of that and when you broke it up to the five year chunks, what was crazy? And it’s a no brainer like Sydney and Melbourne and much more diverse economies. So they respond better and quicker and there’s more people moving there and more people living there. Um, things sort of in the first five to seven years, which had just gone through after the GFC. Historically, do much, much better in those areas and then we go through the second half of the cycle where Australia’s regional market, big regional markets and other capital cities, um, you know, get a bit of a resurgence once, once the strength of the economy’s back in gear and people are working again.
So, you know, looking at these five year period that we’re going into based on the last 40 years, if we overlay this time again. Um, again, I can’t say that it’s gonna happen again. I have no idea. I’m not a fortune teller with a crystal ball, but looking at the last two to five year periods at this time, we’ve seen prices increased by 60 and 70 percent over this five year period in Brisbane. So whether it happens or not, I hope it does. I doubt it will. Um, but it’s nice to know that this is the time to be considering Brisbane from a global cycle perspective, analytical cycle perspective.
Yeah. And I just want to close this off by saying that as ben mentioned, we’re not fortune tellers. We don’t have a crystal ball that will tell the future what we’re looking at here is positive indicators of an area so we can’t predict the future, but the more positive indicators we have an area we feel the more likely that area is to perform well and so why we wanted to do this video today was to share some of these crazy positive indicators that we’re seeing in the Brisbane market and the fact that there’s not just one of these indicators or two of these indicators that we were really quickly able to outline 10 indicators that are really quite positive for the market. So now it’s up to you to decide what to do with those indicators and decide what to do with the Brisbane market. It may or may not fit into your investment strategy. We always advised that you have your own strategy. First, you have goals that you’re aiming for and whether or not Brisbane fits into that is completely up to you. But yeah, we just wanted to share these indicators, give you this overview and then allow you to then go and do more research and decide on your own what you want to do about this information.
Absolutely. Now I’m really, really excited about some of these stuff and as you said, who knows what’s going to happen with it all. We could go through 20 years of no growth in Australia, who knows, but this looks pretty interesting. Brisbane’s cheaper than it was to buy here right now. It’s cheaper to buy me out and it was 10 years ago, so I like that fact.
So we’ll close it off there. If you guys are at the point where you’re ready to invest in property and you do think that you may want to invest in the Brisbane market, but maybe you’re not completely sure, maybe you’re not on the ground here and you want someone to help you do that. Then that’s Ben and his team over at pumped on property. Specialize in is the Brisbane and southeast Queensland market. So if you’re on a buyer’s agent who can help you purchase high quality properties in high quality suburbs in Brisbane, then Ben and his team over at pumped on property are offering free strategy sessions to listen to today. So if you go to on-property Dotcom, com forward slash session, you can book in a free strategy session with one of the team members over at pumped on property. You can talk about your situation, talk about where you’re at, they can help you kind of project where you want to go.
And then it’s up to you where you want to go from there, whether you want to invest in Brisbane or not, there’s no pressure to do that or no pressure to even hire them. Um, that’s provided complimentary. And so thanks to Ben and his team for offering that. And again, that’s on property.com, forward slash session. So we hope that we made the data interesting for you guys today. We hope that you had some insights into the Brisbane market as well as some things to look for in whatever market you’re looking to invest in. That’s it from us today. And until next time, stay positive.