Brisbane's Ipswich mounting a property comeback: Terry Ryder

Ipswich, once the capital growth leader for the Brisbane metropolitan area and a favourite target for property investors from around Australia, is mounting a comeback after three years in the doldrums.

Up until 2013, Ipswich City dominated the growth rankings for Greater Brisbane. In a report early in 2013, I wrote: “Ipswich City is the capital gains star of the Brisbane metropolitan area. The municipality which encompasses the south-western fringe of the Greater Brisbane area has the top five suburbs for long-term capital growth. It has eight of the top 10 - and 15 of the top 25 suburbs.”

At that time, virtually every suburb of Ipswich had a long-term growth rate (average annual growth in median prices over the previous 10 years) above 10% per year. It had attracted home-buyers in large numbers and investors seeking affordable prices and above-average rental yields.

Today, after three down years, the same suburbs have long-term growth averages in the 4-5% range.

But the comeback has started, with the first compelling evidence seen in the latest quarterly figures. Hotspotting analysis of sales volumes shows that Ipswich City has belatedly joined the overall positive trend in the Brisbane market. The LGA now has eight suburbs with clear growth trajectories – double the number in the previous survey three months ago. 

Brisbane’s real estate sector has been behaving quite differently to that in Sydney, where for much the past 2-3 years there has been double-digit price growth right across the metropolitan area.

In Brisbane, there has been growth in individual sectors, but it has not been widespread and the generalised growth figure for the city overall has been moderate at best. 

The Brisbane North precinct was the first to get on a growth path about two years ago and many suburbs in that area recorded double-digit annual growth in median prices.

That market is no longer pumping to the same degree – sales activity has tapered off in most of those suburbs which were previously the market leaders of Greater Brisbane.

Now the southside has taken over. In our survey three months ago, Brisbane South was the market leader, with Logan City alongside. Now Logan City (the affordable urban bridge between Brisbane City and the Gold Coast) is the clear leader, with 18 growth suburbs, followed by Brisbane South with 13.

And starting to mount a challenge, well behind these other sectors in the cycle, is Ipswich City.

There was an inevitability about the Ipswich revival because this precinct ticks all the boxes. It is a perfect fit the “power combination” of factors that drives real estate markets – affordability plus infrastructure plus jobs nodes. 

This area has a good supply of suburbs with median house prices in the $200,000s, ample land for future development, big government spending on infrastructure of all kinds, an ambitious and proactive council, and billions in investment from the private sector. 

Many big businesses with major warehousing needs are based out there because the land is cheap and the transport links are good.

Entities involved in key current projects across Ipswich City include Mirvac, GPT, TNT Express, Devine, Lend Lease, Ramsay Health Care, the State Government, the Ipswich City Council and an array of major Asian companies.

As well as cheap entry prices, the area offers solid rental yields, typically in the 5.5% to 6% range.

Goodna is a fairly typical offering. It’s a modest but well-connected suburb, located on the Ipswich Motorway and the rail line to central Brisbane, close to multiple jobs nodes and not far from the extensive facilities of the Springfield master-planned community. It recorded 120 houses sales in the past year at a median price of $290,000 and median yield a little below 6%. 

As the overall Ipswich City market rises, some suburbs are starting to deliver the kind of price growth that made Ipswich a capital growth star in the past. The suburbs of Ipswich, East Ipswich, Woodend and Yamanto have all had double-digit growth in median prices in the past 12 months, while others have grown between 5% and 10%. 

I suspect it’s poised to return to the status that made it popular among bargain-hunting investors in the past.

Terry Ryder is the founder of hotspotting.com.au. You can email him or follow him on Twitter.