Brisbane Property Outlook - The Big Picture - Beyond the Backyard
01 June 2004
The office and industrial property sectors will provide investors with the best selective opportunities on the eastern seaboard in the medium term, according to the latest findings from Macquarie Property Research released in the 2004 annual Property Market Outlook.
Head of Macquarie Property Research, Rod Cornish presented the results in Brisbane today: "Australia's economic cycle is shifting from housing driven activity to business driven activity and the property markets will respond accordingly.
"Non-residential sectors are the most affected by business activity and global drivers and this is where we expect the opportunities to emerge over the next year.
Recent population growth, and its multiplier effects on the local economy in Queensland, has been a major driver for the property markets overall. For example, industrial land values in the Gateway precinct in Brisbane rose 20 per cent in the last year. Record white collar employment growth has started to flow on to office demand which has been stronger than Sydney. While office demand in Brisbane will be solid, new office supply in 2005 will temper rent growth and the Sydney office market will provide the best opportunities in the medium term as leasing demand recovers from next year," said Mr Cornish.
The Outlook report highlights the influence of the global economy on Australia's property markets and the need for all investors to take big picture influences into account. Increasingly, the Australian property market will be driven by the major overseas influences, especially in the next 12-24 months as the global economy recovers.
"Property investors, both large and small, will need to factor in the big picture and look beyond their own backyard for investment opportunities and trends in the coming year," said Head of Macquarie Property, Stephen Girdis. "But the question is how do investors invest in large scale property like offices? Most people don't go out and buy a multi-storey office block or an industrial park. There are a number of options - for example, listed property trusts are a convenient way for investors to take advantage of these opportunities," he said.
"Migration is cyclical and the population shift to Queensland is now slowing," said Mr Cornish. "The population shift was driven by southern migration from Sydney and Melbourne due to the large house price increases in those cities. As the price growth in those cities slows so is the population shift to Queensland.
"The outlook for the residential sector in Brisbane is for a weaker house price growth," said Mr Cornish. "Last year's strong house price growth in Brisbane, 36 per cent, won't be repeated this year. Affordability in south-east Queensland deteriorated over the past 12 months as house prices overshot. Additionally, slower interstate migration will impact on underlying demand over the next 12-15 months. Nevertheless, relative to the slowdown occurring in other capital cities, Brisbane is still expected to be a sound market over the next few years. While it will be more volatile and diverse this year, the most important triggers for a major national recessionary house price crash are not in place and are not expected to be in place over the next year.
The Macquarie Property Market Outlook report has been produced for the last 5 years. In that time, it has achieved remarkable accuracy in predicting trends in the property market including the influence of the baby boomers, the move to community lifestyle property, the move to apartment living, and last year the out-performance of industrial property located around new and emerging infrastructure and the surge in residential property in south-east Queensland and Perth.
For further information, please contact:
Rod Cornish
Head of Macquarie Property Research
Tel. (61 2 ) 8232 3545
Robyn Turner
Snr Communication Manager
Macquarie Property
Tel. (61 2) 8232 6989
More information on the Property Market Outlook