Hotspotting founder Terry Ryder says investors will head to inner-city Brisbane in the lead-up to the 2032 Olympic Games.
South east Queensland apartments are now beating houses on rent price growth in 69 suburbs – and experts say the Brisbane 2032 Olympics will only accelerate the divide.
The latest Rise and Rise of Apartments report, released today from Nuestar and Hotspotting, showed rental growth for apartments is now outpacing growth for houses in many locations around the country.
It revealed 53 southeast Queensland unit markets also recorded double-digit median asking rent growth over the past 12 months, dominating the national growth.
Aerial view over Brisbane. Picture Lachie Millard
“Apartments are not just an affordability play,” said Nuestar founder Michael Wilkins.
“In the right locations, they are a way to secure exposure to high-quality, high-demand markets earlier and at a lower entry point than houses.”
Among the Brisbane suburbs where units recorded bigger rental price jumps compared to houses over the past 12 months were Aspley, Greenslopes, Newmarket, Murarrie, St Lucia, Runcorn and Wooloowin.
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This one bedroom unit at 38 Centre Street, Aspley is on the rental market at $430 per week.
Slacks Creek, Kippa-Ring, Lawnton, Waterford, Woodridge, Woody Point also recorded bigger percentage jumps for their unit rental markets.
Hotspotting founder Terry Ryder described Brisbane as the “star apartment market” among the capital cities.
“It’s probably going to increase as well because of that Olympic factor,” Mr Ryder said.
“We are going to see people invest in apartments in those inner-city areas of Brisbane because of the Olympics.
“The research shows host cities have an impact on their property market and it’s usually in the lead-up rather than after.”
He said rising rents and more affordable buy-in prices than the house market meant stronger returns for investors in the apartment market.
The report revealed the median house price in Brisbane is $1.227m, while the median unit price is $854,000 — $373,000 (36 per cent) less.
Terry Ryder says rising rents and more affordable buy-in prices than houses meant stronger returns for investors in the apartment market.
Mr Ryder said that with federal budget changes to allow future negative gearing only for new builds, apartment assets would be more in demand.
“As a result of the budget changes, yields will become a higher priority for many investors and as this report shows, the higher yields are to be found in the apartment market,” Mr Ryder said.
“There are a lot more apartment projects underway and their price point is lower than stand-alone properties, so they appeal to investors, who are generally looking to buy at a lower price point.
“As well as the potential benefits of being able to access negative gearing, new properties offer investors better depreciation benefits.”
This three-bedroom townhouse at 73/14 Cavill Place, Runcorn is up for rent at $700 per week.
Mr Ryder said the appeal of an apartment, unit or townhouse wasn’t just its price point.
“One of the things about apartments is they tend to be better located compared to suburban houses,” he said.
“Young people can find a rental close to the action or where they want to be which is usually quite central.”
Buyers agent Lauren Jones
Buyers agent Lauren Jones said Brisbane lacked unit and townhouse stock.
“We’ve also got a large issue with the ‘missing middle’,” Ms Jones said.
“Where in the middle ring suburbs is very little medium density style.
“So for those prioritising location, there is very little available — therefore supply and demand is pushing up the price of these units.”
Surfers Paradise on the Gold Coast recorded the most apartment sales in Queensland with 1356 compared to 204 house sales.
Brisbane City recorded 767 apartment sales compared to just eight house sales.
This top-floor two-bedroom unit at 5/327 Cornwall Street, Greenslopes is up for rent at $600 per week.
The research found that across the capital city markets, there were 162 apartment markets with yields of five per cent or more compared to just 11 house markets.
The highest yields in the apartment market were dominated by suburbs within Darwin, which takes out all top ten spots for rental yields, starting at 7.9 per cent in Karama.
In Greater Melbourne, Carlton was the highest with a yield of 6.8 per cent, Curtin in the ACT was 6.5 per cent, Perth was 6.1 per cent, Auburn in Sydney was 6.3 per cent, Brighton in Hobart was 5.5 per cent, Adelaide was 5.3 per cent and Woolloongabba in Brisbane was 4.6 per cent.
“All these fundamentals come together to show that the apartment market is gaining strength as a force for property investment and will continue to do so,” Mr Wilkins said.
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