Climbing Vacancy & Oversupply. Is Brisbane Tapped Out For Investors?
Chow House in Fortitude Valley’s famous James Street cafe and shopping precinct is one of my fave hang out spots for coffee, catchups and clients, but what has steered my attention away from the delicious Crumpets they serve up at breakfast of late is the gaping hole in the ground across the road.
Yep another construction site.
Another set of units going up in the valley.
Already, investors far and wide are freaking out about the whole over-supply issue in Brisbane’s inner north, and shielding their investment dollars for fear of ending up yet another investor with negative equity in a property purchase that some swift salesperson talked them into.
But is it really all doom and gloom for Brisbane?
Of course I’m not going to paint a complete doom and gloom picture of my stomping ground.
What real estate professional would?!
But truth be told, yes there are some areas that you as an investor absolutely need to stay clear of, but then again, some inner city suburbs within the 10km ring of the CBD are going great guns.
Mitchelton, Ashgrove, and Paddington are just a few where I’ve attended auctions and open houses recently and had to fight off multiple bidders and multiple offers from cashed up buyers looking to purchase character homes on 405m2 + lots.
Prices in these areas for houses around that $650,000 to $750,000 mark have been steadily climbing for months now.
So while units and apartments in some areas are suffering, bottom end houses in lifestyle areas are doing extremely well.
But with all that said, how is this market affecting vacancy?
Recent statistics show that Ascot, Hamilton and Albion share the highest vacancy rate currently at 9%, whilst neighbouring suburbs' vacancy rates continue to trend upward.
So what can you do to avoid the whole high vacancy / oversupply issues in Brisbane?
Firstly, steer clear of units and apartments in high rise complexes that offer limited to no scarcity value. Instead, invest your dollars in scarcer properties that are out of the war zone and ripple affected neighbouring suburbs.
Secondly, drop your landlord ego. Sorry, but it’s no longer your rental market.
Tenants are demanding more for less and landlords who are offering things like free rent periods, air conditioning and the likes are winning the race in the vacancy war.
If you’re prepared to make your property extremely attractive for a tenant, and if you can lock in a 12 month tenancy, you’ll minimise the risk of a longer and costly vacancy period.
Here's a hint. Don't skimp on professional photography. It can make all the difference.
When it comes to buying right in Brisbane, do your own research.
Ask around and seek advice from independent professionals who know the local market and don’t have a vested interest in any particular property.
Don’t be afraid to engage a professional because more times than not, the right person can save you from yourself.
If this an option for you, I have listed my One on One services on my website. Click here to view them.