With rising population and a reduction in new dwelling registration, is Redland City about to exhibit attractive growth over the next 5 years?
Brisbane has been on the radar for some investors for quite some time, with Brisbane property news never far from investors’ conversations. But when it comes to Redland City, not too much has been spoken about in recent times.
Whilst on the surface it might appear that capital growth for the South East of Brisbane area has been minimal over the last 10 years, based on the median house prices, it is actually the case that the Median land size has reduced from 650 to 450m2. And more importantly, the Median land price per m2 has increased from $450 to $700 – a 55% increase in value, which is higher than the Brisbane property market average.
Where is Redland City and which suburbs does it cover?
The City is across the southern coast of Moreton Bay, 25km from Brisbane CBD, which works out to be a 30 minute drive. The large mainland suburbs include Capalaba, Ormiston, Cleveland, Victoria Point, and Redland Bay.
What is the data telling us?
Redland’s population is expanding quick, approximately 2,500 new residents each year. This level of growth is higher than the ten-year average for the area, which is 2,000 new residents per year. Also, the level of employment growth is higher than the historic trend, with 3,365 new jobs created over the last 12 months. Compare this to the 1,600 annual average over the last 5 years and the vast increase is apparent.
So more residents, and more jobs – is that all?
Well no, there is in fact more to the story, and not just the generic Brisbane property news that you might be used to. New dwelling approvals have been dropping over the last few years, which is in addition to a drop in new dwelling registrations. New dwelling approvals is a good indicator of how many new properties will be hitting the market over the subsequent 6-24 months, and new dwelling registrations is the realisation of this number.
The underlying demand of the Redland City property market is one new dwelling per 2.6 new residents. At present this rate is at around one new dwelling for every 4 new residents.
What is likely to be the impact of all this?
There will clearly be a demand to supply ratio challenge facing the market, which in simple terms means there will be not enough new properties for the number of new residents moving into the Redland City area.
Whilst it has been often recited that interstate migration is higher in Queensland than for other states, the Brisbane property market has yet to really benefit from this increase in residents as the oversupply of apartments in more central locations has absorbed a lot of this demand for housing in Brisbane specifically. Also, the all-important jobs growth hasn’t been present across the Brisbane property market as a whole.
So what type of properties should I consider as a suitable investment?
Let’s take Ormiston for example. Ormiston is more of a lifestyle Brisbane property market, boasting some of the best schools and Colleges in the Redland City and surrounding areas.
According to Queensland Curriculum and Assessment Authority, Ormiston College is the bayside’s best performing school based on OP scores. An opportunity therefore lies with dwellings that cater to the growing family demographic. Inclusions to your prospective investment that you should look out for are; multiple living areas, ample yard space, open spaces, and a good flow from the kitchen to back yard / alfresco area. Properties with a Hamptons design are also proving popular according to local agents from both LJ Hooker and Ray White.