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Why Brisbane is hot property at the moment

A little less cosmopolitan, a little less youthful than its southern neighbours but 'Brissy' is far sunnier and growing hotter as an investment destination

Streets Beach, a manmade beach in Brisbane's inner city. Martin Valigursky/Shutterstock[/caption]

Last week, Brisbane set a record in residential property with the sale of a Kangaroo Point mansion for AUD18.48 million (USD14.28 million). The transaction surpasses the 2014 sale of an Aaron Avenue home to Gina Rinehart, the richest person in Australia, for AUD14 million.

The high-end Brisbane residential market has indeed seen a positive shift toward the end of last year, according to Ray White New Farm, which brokered the latter sale. Indeed, Brisbane registered a record number of transactions in homes above the AUD5-million threshold in 2016.

Asians in particular are waxing zealous for Brisbane, the third most searched state capital in Australia on Chinese property portal Juwai.com showed. Demand for Brisbane homes from international investors stem the most from China, followed by the United States, New Zealand and England, according to the Real Estate Institute of Queensland (REIQ).

“We see the gap between Sydney and Melbourne closing in the next couple of years," said Patrick Hunt, manager at local property titan Indigo Building Group. The northern migration from an investment point of view continues."

Brisbane enjoys far less volatility than Gold Coast, Queensland's other large metropolis. “Gold Coast tends to suffer from a boom-bust cycle more so than Brisbane,” Hunt added.

[caption id="attachment_61932" align="aligncenter" width="1000"] Winter Festival in Brisbane's King George Square. Martin Valigursky/Shutterstock[/caption]

Next to the frothy markets in New South Wales and Victoria, Brisbane's affordability has resonated with offshore investors. For perspective, the median house price in Sydney stands at AUD867,000, while that of Brisbane is AUD635,000, per REIQ data.

“People can't afford the yield that they're looking for in other cities; their returns aren't there,” said Mitch Koper, media manager at property analytics firm CoreLogic.com.au. “In Brisbane, you can buy a house for AUD600,000 and get a return of 7 or 8 percent in some cases. It's a very reasonably priced market.”

For all its lure, however, Brisbane has posed challenges to enthusiasm among international investors of late. In June, the Queensland government levied a 3 percent surcharge on foreign purchases.

More: Are Asian home buyers facing racist backlash in Australia?

Then there are more inherent challenges. Although it boasts more sunny days than the more ephemeral climes of its southern neighbours, ‘Brissy' still somehow lacks the sophistication of the south. “I moved to Sydney because Brisbane is so laidback,” said Mark Mitchell, a Filipino-Australian systems analyst. “Brisbane is a place to retire, a good place if you are old, although it does have a man-made beach in the City at Southbank.”

“What I hate about Brisbane is that it’s too small. Everyone knows each other, a bit racist,” said Angie, a Vietnamese makeup artist who married to a Greek in Brisbane. “Clubs ain’t that great, and there are not that many events like in Melbourne.

“Also, sh*t coffees.”

Read next: Has Australia had enough of Asian buyers?

 

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