Plethora of units as area takes off
A suburb just across the river from Brisbane city is a quiet achiever, writes property editor Michelle Hele
WHILE South Brisbane is well known for its arts precinct and lifestyle facilities such as the Gallery of Modern Art, the Cultural Centre and South Bank, it has also quietly emerged as an in-demand residential hub.
Rental yields in the suburb, across the river from the central business district, are strong and demand is high, property analysts say.
Several South Brisbane apartment projects have been recently completed, are being built or are about to begin construction.
These include GDL Group’s 10-storey Fish Lane building and Aria Property Group’s 10-storey Station 16, which has just been completed.
Aria also has plans for a 56-apartment project, Vine, in Russell St, and the 66-apartment Artisan in Merivale St.
Universal Apartments, a 69-unit project in Merivale St, has just been completed by Roca Constructions.
The South Brisbane Riverside Neighbourhood Plan, which came into effect in April last year, aims to retain the village character of Boundary St, increase mixed-use development in the Kurilpa precinct, improve pedestrian movement and connections, create new public spaces and support new and existing public transport.
The plan says the South Brisbane Riverside should be an eclectic, innercity riverside community.
It allows for a maximum height of 30 storeys of development in the Kurilpa precinct of the suburb although Urbis associate director of property economics Jon Rivera says that doesn’t necessarily mean developers are heading that way.
‘‘There has been some great developments from the previous cycle that have kept a bit of a lower density,’’ Mr Rivera says.
‘‘Developers know that they can get to that level but the market has been really responding to a lower density and developers are taking a lower risk.’’
Mr Rivera says looking at the plans and development approvals coming through, there are a lot of interesting buildings coming up and few are ‘‘stock standard’’.
He says the local market is made up more of investors than owneroccupiers.
Mr Rivera says South Brisbane meets what he considers are the important criteria for investment.
He says the area fulfils his PIE theory by having population, infrastructure and employment.
The lifestyle and cultural facilities in the suburb are a big drawcard as well, he says.
‘‘I got asked this question about a month ago: ‘If you had $500,000 to spend where would you put that money?’ ‘‘And I said South Brisbane.’’ Mr Rivera says it has been a relatively forgotten area because a lot of focus until now has been on commercial development.
But he says rents are high and investors are achieving strong yields.
‘‘The biggest drawcard is the culture, you can’t put a price on the value that actually has on a suburb – it is a complete package.’’
RP Data national research director Tim Lawless says prices in the suburb have increased by 22 per cent in the past five years.
In the past year, while Brisbane’s median unit price was falling 2.6 per cent, South Brisbane’s increased by 3.3 per cent.
The suburb has caught the eye of residential developers as it is appealing to residents because it is close to the city, the Mater Hospital and Queensland University of Technology.
Mr Lawless says units are still cheaper than neighbouring West End.
Paul Barratt, of CBRE Residential Projects, says the rental market is tight in South Brisbane.
The present vacancy rate is 1.29 per cent – a healthy rate is considered to be 3 per cent and anything under that tight.
He says just more than half of the population in South Brisbane are renters.
‘‘In 2007, there were 17,000 office workers and 900 apartments; in 2012 there are 30,000 workers and 1100 apartments, plus there are now over 100,000 students enrolled in nearby institutions,’’ he says.
He puts the yields of 7.08 per cent as among the best in Australia for a ‘‘blue-chip’’ suburb.