Smart property investment - which city will provide the best opportunity for capital growth?

A new forecast on one of the hottest property cities is out which identifies one clear target for investors wanting to make serious gains with their property portfolio.

One of the nations most respected property forecasters has delivered its vote on which Australian city presents the best investment potential over the next three years. And the winner is Brisbane.

The BIS Shrapnel Residential Property Prospects: 2014 to 2017 report tips Queensland?s capital to be the boom city, with 17 per cent nominal growth. Never before, over the past decade or more of the reports, has BIS Shrapnel presented such a clear winner.

Sydney prices are also expected to climb, but with a gain of 10 per cent, it is still lagging well behind Brisbane. It is rare to see such a big gap between the two leading cities. Factor in a seven per cent difference on, for example, a $500,000 property, and it adds up to $35,000 more growth, so the prediction is very significant. 

The growth outlook for the other capitals trails off compared with Brisbane and Sydney.

Crunching the numbers

A lot of people ignore this sort of macro research, yet it is one of the  keys to property investment success. It pays to link with advisors who  have access to such data.

 There are a lot of property forecasters in the market, so why should  investors pay particular attention to the BIS Shrapnel predictions? For  a start, this six-monthly forecast has been coming out for almost 40 years and it has a proven track record. Secondly, they have a team of more than five senior economists with specialist property experience. 

Thirdly, the research is independent. And, lastly, BIS Shrapnel  delivers a quantitative forecast, putting a definite number on its  growth forecasts ? many other forecasters speak generally about  areas ?probably? being a good investment target.

 The case for Brisbane

 Why is Brisbane expected to be such a big mover? One aspect is  that the city?s property market has been relatively flat for the past  couple of years, so it is starting to play catch-up. Housing supply is  also very tight, with Brisbane being the second-most undersupplied  capital in Australia. This lack of available housing, along with the relative affordability of Brisbane, explains its appeal. 

Remember that, in Brisbane, a $500,000 unit will often outperform a $500,000 home because units are usually in a far more valuable position close to the CBD, where owners have access to public transport and other amenities.

Perhaps the most interesting point for Brisbane investors is that BIS Shrapnel typically takes a cautious approach with its numbers. So the 17 per cent growth it is forecasting could well end up being much higher. In fact, in the past it has not been unusual for the top cities in the report to record growth that is two to three times higher than the BIS Shrapnel prediction. The message is clear: don?t ignore Brisbane. 

This article was originally written by Richard Sheppard from inSynergy Property & Finance Solutions for the August edition of Peninsula Living Magazine.

Find out how you can take advantage of the Brisbane property market and how to find the best property to buy for investment by clicking here.

Disclaimer: The information on this site is general in nature and not financial advice. Visitors should consider obtaining independent advice before making any financial decisions.