Good news for Brisbane

Oops, try this.....



Brisbane:
Fundamentally strong though some slowdown is expected


The Queensland State Government wants us to regard 2008 as "The year of infrastructure delivery". The Queensland public is more likely to see it as "The year of better-late-than-never".

Whatever, it is certainly a time of enormous spending on infrastructure, particularly on transport, water supply and health services. Projects costing $5 billion will be completed this year and another $15 billion's worth is under way.

They are all desperately needed developments as Queensland struggles to cope with its population growth. Water is a good example: a desalination plant is almost completed, there are pipelines criss-crossing South East Queensland, new dams are in planning and a project to recycle effluent water is well advanced. It all adds up to many billions of dollars washing through the economy.

So while Queensland has many problems to deal with, its government has lots of money thanks to the resources boom and the property market, and it's spending lots of it on bridges, busways, tunnels, roads, hospitals and pipes to carry water from A to B.

So Queensland, as usual, is bristling with positive news: the economy continues to out-perform, population influx continues to lead the nation and property prices are rising.

ANZ's Australian Property Outlook says: "Queensland continues to reap the benefits of the commodity boom and a buoyant labour market has boosted household incomes by a remarkable 11.5% over the year to September. A marked jump in infrastructure spending, solid investment intentions and healthy household cash flow suggest economic conditions will remain very supportive in 2008.

'Rentals markets have continued to tighten and advertised rents were up a solid 18% over the year to September. In stark contrast to other states, Queensland's home building industry is performing strongly. Residential building approvals have risen sharply since early 2006 and are currently at a 13-year high. Nonetheless, dwelling supply is still falling short of underlying housing demand and the market is expected to tighten further in 2008, increasing upward pressure on house prices and rents."

Herron Todd White says in the March edition of The Month in Review that Brisbane's rental market has continued to rise "unabatedly skyward" for so long that many tenants appear to sigh in relief when they receive only a $10/week rent rise. "The competitiveness of the market is played out daily in extended inspection queues for prospective tenants and ever-surprising rises in rent when leases come up or change over," it says.

But it also comments: "The growth in both rents and values is likely to run out of steam and a slowdown sits on the horizon around the mid-year point."
Louis Christopher, head of property research at Adviser Edge, is also less enthusiastic about Brisbane's prospects this year compared with Sydney, Melbourne and Adelaide. He predicts price growth around 8-9% for Brisbane homes this year.

Investors need to be careful with some regional Queensland markets which have, to date, been outstanding performers. There's no doubt that Mackay, which has shown exceptional capital growth for many years, has passed its peak - with virtually no price growth in 2007 and some suburbs showing price decline. Its short-term prospects haven't been helped by the extensive flooding in February.

Townsville, one of Australia's strongest regional economies, is starting to show signs of plateau-ing in its property market after three or four very strong years. HTW says: "The pressures Townsville has been experiencing in its residential market are starting to abate, but only very slowly. Investor demand is cooling, attributable to higher borrowing costs. Locals remain active in the market but are much more discriminating in their purchases and a touch more nervous given the interest rate climate. These conditions have led to some moderation of price growth and normal sale periods for sensibly-priced properties extending out to 6-8 weeks."

Gladstone has had two years of exceptional price rises, with many suburbs increasing 30% or 40% last year, and the best time to be buying there was two years ago - but because of the number of massive projects focused on Gladstone, the city will continue to show solid price growth.

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D.
 
Interesting read, I think the slow down has occurred in the southern suburbs, of between 5% to 10% but there stills seems to be a strong demand for rentals which are rising is this happening else where?
 
who do you think will pay for the infrastructure ?
Brisbanites will, in the next few years. This means that Brisbane is less attractive for people to live in as council charges will go up. On top of that, all the road works will cause TREMENDOUS traffic jams and crap all around.

This is not good news, it's terrible news : Basically they are now starting what they should have done 15 years ago. I see more people moving out of Brisbane because of this bad news.
 
who do you think will pay for the infrastructure ?
Brisbanites will, in the next few years. This means that Brisbane is less attractive for people to live in as council charges will go up. On top of that, all the road works will cause TREMENDOUS traffic jams and crap all around.

This is not good news, it's terrible news : Basically they are now starting what they should have done 15 years ago. I see more people moving out of Brisbane because of this bad news.


Do you HONESTLY think that improving roads and amenities is going to make brisbane worse in the long term?
 
who do you think will pay for the infrastructure ?
Brisbanites will, in the next few years. This means that Brisbane is less attractive for people to live in as council charges will go up. On top of that, all the road works will cause TREMENDOUS traffic jams and crap all around.

This is not good news, it's terrible news : Basically they are now starting what they should have done 15 years ago. I see more people moving out of Brisbane because of this bad news.

On the contrary, the improved infrastructure will make Brisbane even more attractive. Council charges are capped and most of the money is coming from the state government not the council.

Agreed that they should have started 15 years ago but at least they are doing it so how can that be bad news?
 
Funny how any positive property news is greeted as fantastic and credible and any negative news is labelled as tall poppy syndrome, sensationalist, doom & gloomers, chicken little etc.

Investing is a mind game but the negatives have to be taken on board as much as the positives to manage risk.

As for Brisbane, i have a few in the Caboolture area and demand has dropped through the floor and prices are falling. I have a friend who's had her house on the market for 12 weeks with not one offer and very little interest.

She has dropped the price below comparables of a few months ago in the same street which is not good for her.

Loooong term tho, no problem.
 
Do you HONESTLY think that improving roads and amenities is going to make brisbane worse in the long term?

Yes. I do. And believe me I have seen it all before. More roads = more congestion.

If they decided to build a SUBWAY, the only REAL problem solver, then I'd say wow... good decision. But Brisbane has historically always chosen roads above mass-transit, and I expect them to do no different.
It will lead to 4-5 years of traffic congestion at least while construction is up. When it's done, people will have more cars, and the problem will be worse.

The *ONLY* way to solve congestion in any city as big as brisbane is to have a mass transit, just like Paris / London / Chicago / New york etc... Just like any city basically.
So to answer your question : Yes, I truly believe that these 'infrastructure changes' will make the traffic worse.

Man just look at what the new freeway did in Sydney. It just allowed more cars to stack up on eachother.

Brisbane will be Australia's biggest carpark, *UNLESS* they *FINALLY* decide to build a Tube / Subway / Elevated train. They should actually use the current roads , break them up , and make mass-transit on those.
And not limit it to the CBD , but all the way to Redcliffe / Ipswich / Beenleigh.

Can you see the scope of the problem that Brisbane has ?
 
Yes. I do. And believe me I have seen it all before. More roads = more congestion.

If they decided to build a SUBWAY, the only REAL problem solver, then I'd say wow... good decision. But Brisbane has historically always chosen roads above mass-transit, and I expect them to do no different.
It will lead to 4-5 years of traffic congestion at least while construction is up. When it's done, people will have more cars, and the problem will be worse.

The *ONLY* way to solve congestion in any city as big as brisbane is to have a mass transit, just like Paris / London / Chicago / New york etc... Just like any city basically.
So to answer your question : Yes, I truly believe that these 'infrastructure changes' will make the traffic worse.

Man just look at what the new freeway did in Sydney. It just allowed more cars to stack up on eachother.

Brisbane will be Australia's biggest carpark, *UNLESS* they *FINALLY* decide to build a Tube / Subway / Elevated train. They should actually use the current roads , break them up , and make mass-transit on those.
And not limit it to the CBD , but all the way to Redcliffe / Ipswich / Beenleigh.

Can you see the scope of the problem that Brisbane has ?


Sydney is handicapped by the governments inadequacy to run the state. Brisbane imo are in better hands. While I don't disagree with you that Mass Transit is the key to a world class transport system, baby steps for baby cities and Brisbane does need to address it's road capacities.

P.s The congestion you are referring to, post freeway is because the state authorities havent had the foresight to cope with demand over the years. The situation would have been 10times worse if they didnt increase the road sizes at all, the problem is that they didn't increase it enough.

P.P.S As long as QLD state gvmt aren't criminal like NSW I think the road situation will be better.
 
Why invest in roads now if the future requires mass transit systems ?
Why not invest in mass transit now ? Elevated trains don't take long to build, and they're cheaper ( and safer ) than subway systems.

They could have the best mass transit system in Australia in the form of elevated trains in as quickly as 10 years from now. *IF* they start building now.
 
So is the slow down right across Brisbane then and the demand for rental still strong??

Interesting to see Peter D'Arcy (Ashgrove REA) on Ch10 news the other night saying prices had dropped $30-$40k, and that bargains will be available between now and Christmas. Looking like good conditions for buyers across most of Brissie now. A fair bit of last years gains seem to be eroding.

Plenty of rentals available in most areas, but high demand areas closer in to the CBD seem to have multiple applicants, from what I hear.
 
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