“Brisbane will grow faster than any other `mature` world city over the

CLIENT RELEASE: MAY 2014
“Brisbane will grow faster than any other
'mature' world city over the next eight years…”
Apartments in Brisbane for investment
Citylife International Realty is proud to offer a few carefully selected projects each year to our clients which we
consider to be excellent opportunities for investment.
We are careful when doing our OWN research to try to ensure that our clients have access to investments which
protect their downside as much as possible, with plenty of scope for upside over the medium to long term. We have
found over the years many clients simply attend an exhibition and buy a property, without any research. They then
end up disappointed, and say “Australian property is no good.” The facts are that in every market there are good
investments and poor ones: Australia is no different! Research helps protect against bad decisions. There is a reason
the Citylife Group has a huge repeat buyer rate.
Some of the criteria we look for when researching projects to recommend include:
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The property must be either in an area of high population growth, or have restricted supply of land for
apartments, and also be a high employment area, ideally with higher income earners.
The property must be in walking distance to cafe’s shops & transport. (we like to see a high “Walk Score” )
It should be brand new, or fully renovated, to allow for maximum depreciation & therefore the biggest tax
savings.
It must be high quality in terms of design, materials and construction & also should have reasonable Body
Corporate fees.
The property must be located in an area which has a sound and long term rental growth and occupancy
history.
There must be a reliable, experienced and trustworthy Developer behind the project, with a good track record
and great credentials.
In addition to the above points, we then apply our own independent Citylife Investment Criteria. If it then stacks
up, we will recommend it to our clients.
“Brisbane on track to be one of the World’s most
prosperous cities…”
The following charts should help explain why we are now strongly recommending Brisbane as an investment location
ahead of most other locations in Australia. Some of our previous recommendations include:
“Run, don’t walk, into the Perth market” (2004)
“Sydney is the sleeping giant of Australian property. When it awakens, which will be soon, watch out!” (2009)
If you have followed the Australian market, you will know both the above markets have moved rapidly in the years
following, making Sydney and Perth now Australia’s most expensive markets.
1. All projects must be located in a city with occupancy rates of 95% or higher in the current market, and, over
the past 5 years ideally to show a strong trend. This generally indicates rising rentals and strong tenant
demand. We have used the major cities compared to the Melbourne and Sydney CBD’s for this test. So it can
be clearly seen that Australia’s cities are currently enjoying very high rental occupancy rates. (The Melbourne
CBD being an exception due to a large number of small inner city apartments completed there in recent
years) meaning the vacancy rate there is not ideal for investors.
Occupancy Rate - Feb 2014
Source: SQM
Should be 94% -95% or higher, otherwise somevacancy and decreasing rents
100.00
99.00
98.00
97.00
96.00
95.00
94.00
93.00
92.00
91.00
90.00
Melbourne CBD
Brisbane
Adelaide
Perth
Sydney CBD
2. Population growth fuels property demand. Given the relative populations of Brisbane and Perth, the growth in
these cities is phenomenal even when comparing to the much larger cities of Melbourne and Sydney.
Interestingly, a little known fact is that Brisbane’s population is similar or larger (and growing faster) than many of
the world’s major cities, including Paris, Rome, San Francisco, Milan, Munich, Dubai, Kuala Lumpur and Zurich
amongst others. Of course, these figures depend upon the local authorities’ geographical definition of the city
boundaries, however, it is food for thought as some people still think of Brisbane as a small backwater. Clearly this is
no longer the case! Population growth, especially if wealthy, skilled and affluent, is a major source of property price
growth, especially if combined with scarcity.
Brisbane will grow faster than any other 'mature' world city over the next eight years, according to an international
study compiled by market analysts Jones Lang LaSalle. JLL research and consulting director Leigh Warner said it was
not surprising the Queensland capital had come out on top, primarily due to the strength of the state's resources
sector.
As mentioned above, greater Brisbane’s population is bigger than many great cities including Paris, Rome, San
Francisco, and Kuala Lumpur.
The study, A New World of Cities: Redefining the Real Estate Investment Map, ranked Brisbane number
one for expected gross domestic product growth from 2012 to 2020.
The Brisbane Lord Mayor Graham Quir said the report showed Brisbane was on track to be one of the world's most
prosperous cities. "I'm delighted that we have been identified as number one of the 20 fastest growing mature cities
ahead of Singapore, Austin and Hong Kong," Cr Quirk said.
3. Prices are also very important. Brisbane offers the best per sq metre rate in Australia, excluding Adelaide,
which doesn’t have the same population growth. This is a compelling argument, and in fact puts Brisbane
amongst the lowest of all the major world cities, not just Australian cities.
WORLD CITIES COMPARISON:
4. We try to find projects in areas which also have a low “Mortgage Stress Indicator”, to ensure that the
property is affordable within that location. Mortgage stress occurs when over 1/3 of household income goes
to the mortgage payments, causing households to have less disposable income left over, thus causing “stress
caused by the mortgage payments “ or Mortgage Stress for short. Comparing the major cities, it’s clear that
Australia overall is in a very good position, except for the major CBD areas of Melbourne and Sydney. Again,
another positive indicator for Brisbane:
Mortgage Stress - Mar 2014
Source: SQM, adjusted for new.
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Melbourne CBD
Brisbane
Adelaide
Perth
Sydney CBD
Mortgage Repayments as a % of Household Income
should be below 33%. The lower the better, meaning properties are easily affordable, likely to result in
increasing demand and prices rises.
Source: SQM
“Brisbane to be number one for expected gross domestic
product growth from 2012 to 2020 ”
Rental yield
Brisbane currently offers investors some of the highest rental returns of all the major cities in Australia.
Rental Yield Apartments as at Mar 2014
Source: SQM
6.00%
4.00%
Melbourne
Brisbane
Adelaide
Perth
Sydney
As can be clearly seen from the above data, Brisbane offers superb real estate prospects for long term
investors, and many market indicators show now is a perfect time to enter the market at the right price in the
right location.
PROPERTY CYCLE AND TIPS
Specifically, the Brisbane property cycle appears to have now stated its upward trend, which new research
shows is expected to last for up to the next 14 years. This creates a wonderful opportunity to invest now and
reap the long term benefits. Again, like all investments, the correct selection of the location and property is
critical.
For information and to see the graphs on the property cycle visit:
www.Citylifepropertygraphs.com
WALK SCORE. Walk Score is available for any address in the United States, Canada, and Australia. Real estate
experts say “walkability” helps increase rentals, occupancy and resale values. Walkscore.com has ranked the largest
3,000 cities and over 10,000 neighbourhoods so people can find a walkable home or apartment.
Walk Score measures walkability based on distances to nearby restaurants, grocery stores and other amenities, plus
other analysis of pedestrian friendliness. The two scores for your preferred location you should look at are:
Walker’s Paradise
Daily errands do not require a car
Very Walkable
70–89
Most errands can be accomplished on foot
90–100
A high Walk Score can mean better investment upside.
West end Brisbane: 93
Wooloongabba Brisbane: 82
PRICE. Many apartment projects proposed around Brisbane are now priced around $8,000 per sq. metre upwards
across Brisbane. Look for well-located quality projects UNDER $8,000 per sq. metre.
TIMING. The property clock shows Sales volumes are starting to increase; local rents have been rising & vacancies
remain tight. Now is the time to act, as the Brisbane market has entered an upturn. New cyclical research
shows that Brisbane is likely to entering a 14 year property upturn. For more information on this new
cycle just beginning please go to www.citylifepropertygraphs.com
DEMOGRAPHICS. Always look for well-appointed apartments, designed to suit future “owner occupiers”
rather than JUST investors, such as currently are occurring in the Melbourne CBD, which means higher
potential capital growth.
UPSIDE. A large & growing local resale market; high median values; well-off local demographic & urban revival
equates to great potential upside.
HIGH RENTAL YIELDS. Based on recently completed projects by Citylife that are now rented, investors in Brisbane
can anticipate full occupancy plus high rental returns of up to 6%, significantly higher than most other major cities in
Australia.
Low per square metre rates makes Brisbane some of the most desirable apartments in Australia.
URBAN REDEVELOPMENT. Several areas are supported and /or have been selected by the Queensland
Government for urban regeneration. Early buyers usually benefit the most in these situations. Often height limits
around these areas ensure the all-important “scarcity” factor will remain, irrespective of the number of new projects
approved. In fact, at the early stage of the regeneration, it is important to see a fairly large number approved to ‘kick
things off.’ Probably the most exciting of these areas is Woolloongabba, located just one kilometre from Brisbane’s
CBD. It is in the preliminary stages of one of the most significant redevelopment programs ever seen within
Brisbane’s inner city.
Woolloongabba
Over the past decade Woolloongabba has seen massive investment in transport infrastructure which has resulted in
the area becoming one of the most accessible inner city suburbs in Brisbane.
Woolloongabba was declared by the State Government as one of only 4 priority Development Areas in Brisbane.
The population is expected to triple by 2036, creating demand for more than 4,500 new dwellings by 2036.
“the most significant redevelopment programs ever seen
within Brisbane’s inner city”
Woolloongabba Rental Levels
The rental market across Woolloongabba is one of Brisbane’s stand out performers, with rent increases in both one
and two bedroom apartments outperforming growth across most of Brisbane’s other suburbs.
Woolloongabba is currently recording a rental yield of 5.8%, which is one of the highest gross rental yields being
recorded across all of Australia’s major cities, and in fact, is amongst the highest being recorded amongst most World
cities.
Local employment/tenant demand
Woolloongabba is located adjacent to the CBD, Southbank, and the Princess Alexandra hospital.
The Mater Health Precinct is situated in the heart of Woolloongabba, and is one of Brisbane’s largest health precincts.
The new $15 billion Lady Cilento Children’s hospital will open in late 2014 to become the single specialist children’s
hospital for Queensland.
Combined with the high level of transport infrastructure and the new proposed underground rail line, Woolloongabba
enjoys strong rental demand from more the 350,000 workers and students.
This massive work force, until now UNABLE to secure rental accommodation nearby work, and the restaurants and
cafes nearby, will provide a ready source of quality tenants for years to come. Price rises will surely follow. These
people will need to live somewhere. You may as well be the one to supply their housing.
“Ranked as Brisbane’s 4th Most Affordable Location”
Brisbane performance against Melbourne
Finally, we have compared the average Capital Growth of a Brisbane apartment against Melbourne, over the past 10
years to December 2012, as we have not yet got final figures for 2013, to see that Brisbane has in fact out performed
Melbourne.
“15,000 new residents move to Brisbane each year, 25% move into the inner city”
“Inner Brisbane is undersupplied by about 40% - 2,650 new dwellings needed each year
yet just 1,600 supplied”
As can been seen from the data and research above, we believe Brisbane offers an excellent
investment opportunity to take advantage of the forthcoming upturn and enjoy a great long term
investment.
LIMIT OF LIABILITY, DISCLAIMER AND LEGAL NOTICES:
In compiling this publication, the Publisher relies upon information supplied by a number of external sources. The publication is
supplied on the basis that, while the Publisher believes all the information in it will be correct at the time of publication, it does not
warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any
loss or damage sustained by any other person or body corporate arising from or in connection with the supply or use of the whole
or any part of the information in this publication through any cause whatsoever. The data and projections should be used as a guide
only and should not be relied upon in making investment decisions.
The data is provided from sources deemed extremely reliable, but markets and statistics can change quickly, so is not guaranteed.
All properties can go up in value or down, there are no guarantees and you recognise that any business endeavour has inherent risk
for loss of capital.
SOURCES: Data and statistics are sourced various bodies including The Australian Bureau of Statistics, the Real Estate Institute of
Australia, Residex, RP Data, Matusik, SQ M research and Australian Property Monitors amongst others.