SEQ Property: Ready to Roar in 2016

Property experts remain optimistic about the South-East Queensland property market in 2016, citing factors such as a low dollar providing improved attention from overseas, and the increasing gap between house prices in Sydney and Brisbane delivering investors from south of the Tweed.

Overall, the South-East Queensland housing market demonstrated stability in 2015, with consistent sales activity recorded over the period. The rate of annual growth has rebounded to its fastest pace since August 2014 and transaction volumes remain broadly level with a year ago.[1]

Despite the 3% drop in Sydney house prices across the December quarter, the gap between house prices in Sydney and Brisbane is vast.[9] .  CoreLogicRP Data last recorded this gap in November 2015 at $431,500.[2] This trend has been pivotal in creating new market energy in South East Queensland.

Australian real estate expert, John McGrath, believes that as a result of this gap southern investors are now migrating across the Tweed.   “We are now seeing a steady flow of Sydney and Melbourne buyers heading north. Southern investors are chasing capital growth and the highest yields of the major capital cities, while young families are seeking affordability and lifestyle,” he stated.[3]

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Chinese investors are also playing a key role in South-East Queensland real estate.  Having driven Sydney and Melbourne’s booms, these investors are now looking for the greater yields offered by the Sunshine state. Indeed, Chinese buyer interest in property in South-East Queensland jumped in 2015 – soaring as much as 1,120%. [4]

According to Juwai data, in 2015 the Chinese Yuan demonstrated a 25% increase in buying power over the Australian dollar, a driving factor in the burgeoning Chinese interest in Australian property. According to co-CEO of Juwai.com, Simon Henry, “Queensland cities have not been the most popular with Chinese buyers over the past five years, but they are growing quickly. The Gold Coast is doing particularly well this year, especially as buyer interest temporarily reached a low point in 2014.”[5]

Construction on the long-awaited $1 billion Jewel hotel and apartment project at Broadbeach by its Chinese owners began in March 2015 and non-stop flights from the Gold Coast to China have now commenced.  Both of these factors will also focus Chinese attention on South-East Queensland.

Overall, experts remain optimistic about the South-East Queensland property market in 2016, stating that once state economic conditions improve and Sydney slows further, the South-East Queensland property market will be ready to roar.[6]

Take advantage of SEQ potential

One way to take advantage of the potential in the South-East Queensland property market is to participate in a Mortgage Investment secured by a registered mortgage over a property in the area.

Mortgage Investments are typically a shorter-term investment than directly investing in property, providing investors with greater liquidity and flexibility.  Indeed, the AIA recommends a timeframe of between one and three years for a mortgage investment, compared to a minimum timeframe of seven years for property.[7]

Find out more about how the Trilogy Monthly Income Trust might fit into your investment portfolio at www.trilogyfunds.com.au/

 

Disclaimer: While every effort is made to provide accurate and complete information, Trilogy Funds Management Limited does not warrant or represent that the information in this article is free from errors or omissions or is suitable for your intended use. Subject to any terms implied by law and which cannot be excluded, Trilogy Funds Management Limited accepts no responsibility for any loss, damage, cost or expense (whether direct or indirect) incurred by you as a result of any error, omissions or misrepresentation in information. Note: All figures are in Australian dollars unless otherwise indicated. This information is issued by Trilogy Funds Management Limited (AFSL 261425) and provides general information only. It does not provide financial product advice nor is it an offer of securities. Applications may only be accepted by completing the applicable application accompanying the relevant PDS. If you require personal advice on the suitability or other aspect of this investment, consult a licensed adviser, who will conduct an analysis based on your circumstances. Past performance is not a reliable indicator of future performance.

 

[1] switzer.com.au, Housing economic chart pack, July 2015

[2] CoreLogic RP Data, CoreLogic’s end of year wrap up, December 2015

[3] switzer.com.au, The experts: Sunshine state property market snapshot , October 2015

[4] https://list.juwai.com, Queensland is the new hot spot for Chinese buyers, July 2015

[5] https://list.juwai.com, Queensland is the new hot spot for Chinese buyers, July 2015

[6] switzer.com.au, The experts: Sunshine state property market snapshot , October 2015

[7] Australian Investors Association, www.investors.asn.au/education/investment-basics/asset-classes/, January 2016

[8] The Courier Mail, Woolies win race for land, April 2012

[9] Domain.com.au, Sydney House Prices Drop 3%, January 2016