A Finder survey of 40 experts and economists found that buying a house in Brisbane is the safest investment option of all capital cities.
Brisbane houses garnered the highest confidence from the experts with only 14% rating it as risky – below Perth (30%), Melbourne (24%), Sydney (23%) and Adelaide (15%).
I wholeheartedly agree with this assessment based on three key metrics.
First, Brisbane’s relative valuation against the other Australian capitals is running near the lowest level in almost 50 years:
Brisbane property is relatively cheap compared to the other capital city markets.
So, from a value investing perspective, purchasing a house in Brisbane is relatively low risk.
Second, Brisbane’s rental market is very tight compared to is southern bigger city counterparts, Melbourne and Sydney:
Brisbane’s rental vacancy rate has tightened as Melbourne’s and Sydney’s have ballooned.
According to SQM Research, Brisbane’s rental vacancy rate was only 1.7% in January, way below Sydney (3.2%) and Melbourne (4.4%).
Part of this relates to the fact that Brisbane is gaining people from interstate migration whereas Sydney and Melbourne is losing people:
ABS shows that Brisbane is gaining from interstate migration, whereas Melbourne and Sydney are losing people.
Finally, demand is white hot in Brisbane as evidenced by the strongest mortgage growth since the early 2000s, which points to surging property values given historical correlations:
Brisbane’s mortgage demand is off-the-charts, suggesting very strong price growth in 2021.
In short, purchasing a Brisbane house looks like a relatively safe bet.
