2020 was a tumultuous year, but the Brisbane property market proved itself to be a sturdy, growing environment with plenty of potential. As prices continue to grow in the area, here are the crucial hotspots every investor should watch for opportunities.
Property value in Brisbane has shown to be resilient throughout the previous year. Regardless of how the COVID-19 crisis impacted the market, forecasts for this area are favourable and point towards a strong 2021.
There’s considerable demand for various property types in Brisbane, but it’s especially true for houses and lifestyle areas. In comparison, apartments are the only type to straggle along.
Predictions are that the exceptional demand will likely lead to a noticeable price growth – probably in double digits.
Consistent 70% auction clearance rates corroborate the optimistic forecasts, a rate that’s not common in Brisbane. In a city that never boasted a massive auction culture, such high rates indicate considerable buyer interest.
Buyers are currently outnumbering sellers, which is always a sure sign of future price growth. Simultaneously, investors are showing higher interest in the market, and for good reason.
According to the latest Westpac Bank forecasts, property prices could experience a 20% rise in the following two years. In that case, Brisbane would take a leading position among property markets.
Naturally, not all locations are equally valuable as development hotspots – some submarkets show great potential for long-term investing, while others will be best avoided.
This article will list only those Brisbane hotspots that property developers should have on their radar. Given that bargains are currently hard to find in Brisbane, investors should pay particular attention to them.
The Six Hotspots
Indooroopilly is an inner suburb filled with greenery and old-style houses. This location has long been famous as a family-friendly environment while providing much in the way of lifestyle and entertainment.
The bus exchange and train station make navigating the suburb relatively straightforward. There is a shopping centre, as well as a plethora of eateries, cafes, and bars, that contrast the green spaces adjacent to housing locations.
Indooroopilly is particularly ideal for students of the University of Queensland.
Since they come from all over the world, this makes the suburb a hub of multiculturalism.
The nearby Brisbane Boys College, together with some of the best state schools, turns this location into a considerable point of interest for site-finding services.
2. Chermside West
Chermside West experienced substantial growth in the previous period, which likely indicates a ripple effect caused by the neighbouring Chermside.
The suburb, 12km away from the CBD, recently became significantly more gentrified and will likely become a development hotspot with the upcoming market growth.
With two hospitals and a well-developing suburb nearby, Chermside West should benefit greatly from the 30% growth that took place in Chermside in the last five years.
Hemmant is looking like a prime location for site finding in Brisbane. The suburb has excellent schools and a train station while being more affordable and closer to the CBD than the neighbouring locations of Wynnum and Manly.
The housing projects currently developing in Hemmant are affecting value growth, but the existing stock still hasn’t caught up with rental demand.
Significant depreciation benefits for buying new homes present an opportunity for investors to create a positive cash flow, making Hemmant one of the potential Brisbane hotspots.
It’s Often More Cost-Effective Than Renovating to Sell or Rent
Property prices are on an ascending path. And it’s becoming more expensive to find the perfect site or great development opportunities. Hence, knocking down an old house in an ideal suburb and building dream properties is lucrative for developers.
It’s another reason why knock down rebuilds can be more cost-effective.
If you think about it, even the demolition costs should be cost-effective. They’re often cheaper than some of the reparations you might have to do in an old home to make it appealing for buyers or tenants.
There are also plenty of projects that wouldn’t even require you to buy the land, build a new home, and then search for buyers.
You can add a lot of value to a prime location by developing a modern home, townhouse, or apartment unit for its current owners. That has a lot of money in it for you because you wouldn’t have to invest as much in the project.
Knock down rebuilds can be cheaper, but there’s no guarantee that it’s the case every time for developers. That’s why you must always perform your development feasibility study.
You Can Add Value to a Prime Location
New and well-designed homes in great locations can have amazing value. And opting for a knock down rebuild isn’t always a matter of investing in comfort.
You could also look at it as investing in a property that will be worth more when you’re ready to sell.
Since market prices are going up, a modern home on a great lot of land can be even more profitable. This is something to consider as a real estate developer.
As a property developer, buying older houses in great locations could bring in some profit for you. Instead of working with an empty plot, you could divert your attention to a knock down rebuild opportunity.
Just keep in mind that it might not net you the same profit as working on an empty lot because of all the costs to consider.
However, empty land is already scarce in prime Australian real estate zones.
That’s why if you want to commit to developing property in great areas, a knock down rebuild could be your only avenue into prime real estate locations.
There’s Less Guesswork Involved
Homes degrade over time. That’s why living in a pre-owned building can lead to certain surprises once renovations start.
It’s not uncommon to discover faulty wiring, shaky foundations, even an asbestos problem. Developers often run into these issues in the midst of renovation projects. But it’s never a good thing because it can increase the cost of the project and the completion timeframe.
A benefit of a knock down rebuild is that it eliminates most of the guesswork.
You can tear down the whole structure and work off a blank canvas. Doing so makes it somewhat easier to manage costs and avoid surprises so you can stick to your schedule.
Sure, it’s still possible to run into unexpected challenges. While the home is no longer a problem once you knock it down, the land could still hide some issues.
It may also be easier to get a good deal, or shake on it faster in a knock down rebuild project.
Homeowners know that developers can get better profits by building multiple units on the land. So, sellers may be inclined to sell directly to developers who may offer a higher price for their property given the potential returns, instead of working with real estate agents.
You Can Go Greener With a Knock Down Rebuild
Modifying a home into a more eco-friendly and green homestead isn’t always easy. The design, infrastructure, wiring, plumbing, and everything else can affect development feasibility.
It can be too expensive to go green after a traditional renovation. Some projects may also require structural changes, which never come cheap.
Choosing a knock down rebuild eliminates all of those problems.
You can design and build a home around green technology. And you can also modify the landscape so that it accommodates your new vision for the home.
But why should you consider this?
Eco-friendly homes are in high demand. People want greener and they’re willing to pay, which makes it easier for you to sell this type of property, especially in prime locations.
An Option Worth Considering
No one says that a knock down rebuild is your only shot at a prime lot. However, it’s one of the easiest ways for developers to secure great locations. You may invest more initially because the plot isn’t empty. That said, your returns could be nothing short of impressive.
You can build modern apartments and townhouses instead of working with a single property. Not to mention you can even make deals directly with sellers. Perhaps it’s also your shot at going green and offering something that gets buyers even more excited.
There are tons of benefits in these projects for developers who act quickly.
Are you wondering how a knock down rebuild could benefit you or if it’s recommended in your area?
Book a demo of our Archistar platform. Take advantage of our site finding features and find the perfect place to knock down an old house for your apartments or townhouses. We also offer comprehensive feasibility reports to identify the profitability of your preferred development sites. In addition, our generative design tool provides dozens of apartment or townhouse design options to choose from.