Wouldn’t it be nice to have a crystal ball to project 10 or even 20 years into the future to maximise the return on your next investment property?
It could have made a word of difference in the last decade in an underperforming Brisbane property market.
You see although it has been doom and gloom for the broader market, there have still been areas that have doubled in value during this time.
If only we knew back then what we know now and the suburbs we should have invested in!
While there will never ever be a guarantee of future market performance, there are certain things you can do to put the odds significantly in your favor.
I have found the best recipe for success lies in the following formula;
So, the first thing you need to identify is future jobs growth, as it underpins the entire concept.
The first place I would start would be gathering information to establish where the most jobs are being created.
The Australian Government, through its associated departments, releases regular research reports that enables us to discover these trends and the graph below provides a telling story, particularly for Brisbane.
Almost three-quarters of employment in Brisbane occurs within a 15km radius of the CBD, with almost 35% occurring within that 5km ring.
The next step is to understand what types of jobs are going to be created over the next 5 – 10 years.
Here is a snapshot for you;
The clear standout in this graph is the 21% employment growth in Health Care and Social Assistance leading the charge.
So, one of the first things I would add to my must have list is a Major Hospital.
When I say a major hospital, I think of not just a large hospital, but also one with a significant amount of jobs being created through various streams.
These would include obviously, the hospital itself, research and development jobs and specialised areas with ongoing training and special services.
Specialised areas that I see being in demand in the future are mental health facilities, children’s hospitals and in particular aged care facilities.
Central Business District
The next 3-4 growth categories include Professional Services, Accommodation and Food Services, Education and Training and Retail Trade.
This will encompass the vast majority of those 35% of jobs within the 5km ring we spoke of earlier.
Brisbane will need to transition from being predominantly mining and construction driven, to focus more on services, education and health care and this expansion will be driven from our CBD.
The Queens Wharf Project will be the driving force behind this transition.
Tourism will also continue to be an important part of our economy here in the sunshine state.
So naturally, to cater for an increase in these services, our Airport is currently undergoing a transformation also.
We are now mid-way through construction of a second runway at Brisbane Airport.
This will be another driving force for jobs growth over the next 5 – 10 years, so it is also something I would want to include with my must haves.
According to the ABS, as of 2014, 70% of Australians lived in Capital Cities.
Almost 80% of population growth in Brisbane over the last decade has occurred between 0-30km from the Brisbane CBD, with nearly 50% under that 20km ring.
There is no reason for this trend not to continue, especially given where new jobs are being created.
ABS are also predicting a further increase of $1mil people to Brisbane in the next 10 – 12 years.
If 50% of those people continue to seek housing under that 20km ring where the jobs are, there will continue to be strong demand for property.
The Game Plan
If I am looking to future proof my next investment in Brisbane there are several key factors that it must have.
I would firstly want to be aware that there will be close to half a million people moving into the Brisbane 20km ring in the next decade or so.
These people will want to live close to employment hubs such as the Brisbane CBD, the Brisbane Airport, and our bigger hospitals.
I would be looking for a suburb that would encompass as many of these as possible as it will be in higher demand from home buyers and tenants.
With potentially 400,000 – 500,000+ more cars on the road in this time, it brings into play a few other key factors.
Public transport and infrastructure will become even more essential and an awareness that our roads are going to get significantly busier.
As a result, I would add train lines and busways to my search criteria as demand increases for these essential services.
With traffic congestion, I would also want to be in and under 10 – 12km from Brisbane as travel times head north the further out you go.
Interestingly enough, these criteria are exactly the blue print for the suburbs that have doubled in value in the last decade.
While others will continue to speculate and attempt pick the next hotspot, I will be future proofing my portfolio with known, proven and trusted locations to grow my asset base wider.