Would-be property investors are switching their focus from Sydney to Brisbane.
Cohen Handler CEO Ben Handler says some investors are finding it tougher to get a loan after the regulator’s moves to slow growth in lending to investors, and Brisbane is now looking more attractive.
Mr Handler said some investors could not get loans approved or now required a bigger deposit.
“A lot of the investors have been cut out of the market because they don’t want to put in that hefty deposit,” Mr Handler.
The buyers’ agency is purchasing a lot of property in Brisbane and south east Queensland for investors because Sydney is too expensive.
“I think the yields here are not good because you’re paying so much to buy now,” he said from Sydney.
“People are like `hey I’m not going to get much capital growth in Sydney because I’m paying at the top of the market and my rental return is not that great’, so the next best thing we’re seeing is Brisbane.”
He said there had been a big shift in the market in Sydney’s west, in areas such as Harris Park near Parramatta and St Marys and Penrith.
“A lot of the investors can’t get in there so a lot of stuff is passing in out west,” Mr Handler said.
Many lenders have hiked interest rates for investors and made it harder for them to get loans, while cutting rates for owner occupiers, in response to the Australian Prudential Regulation Authority’s crackdown, which imposed a 10 per cent `speed limit’ for investor property loan growth.
Bank of Queensland chief executive Jon Sutton believes the company could benefit as people head north in search of more bang for their housing buck, saying Queensland house prices are still affordable.
“In time, better housing affordability should encourage net migration to Queensland, further boosting the state economy,” Mr Sutton said as the bank reported a record $318 million annual net profit.
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