St Lucia Investment Fundamentals
Overview
St Lucia is unquestionably one of South-East Queensland’s blue chip residential suburbs. With the median house price one of the highest in the state the suburb is a highly coveted address which enjoys a high level of demand. Furthermore, St Lucia is home to the state’s most prestigious and largest tertiary institution, The University of Queensland. Consequently demand for rental dwellings is felt to currently be the highest in the state.
The St Lucia accommodation sector unlike the traditional residential property sector benefits from a more stable, tangible and certain demand source from both Young Professionals and The Australian Higher Education Student Population.
International education is Brisbane’s largest export industry with 75,000 international students arriving every year creating more than 20,000 jobs and injecting $3.77 billion into the local community. The market continues to grow driven by the region’s attractiveness and affordability across the international student market.
UQ – The University of Queensland
St Lucia is home to the State’s largest University, The University of Queensland’s St Lucia Campus which comprises of over 50,000 students and staff.
UQ is the university of choice for international students being one of only three Australian Universities in the Top 100 of the four most influential global rankings.
The latest data shows the following enrollment numbers:
- Domestic Students 34,474
- International Students 10,196
- Staff 5,200
- TOTAL 49,870
St Lucia Residential Market Fundamentals
St Lucia has long held its position as one of Brisbane’s high end, prestige housing markets. Property values within St Lucia’s housing market and unit market perform similarly with values doubling every 12 – 15 years. Both have recorded average annual median price growth over this timeframe matching each other at an impressive 4.9%. The apartment vacancy rate currently sits at below 3% with 3% considered the balanced rate where supply is in line with demand.
St Lucia Rental Market
St Lucia is more densely populated by students attending tertiary institutions than any other suburb in Queensland and due to the prevalence of both Domestic (Intra & Inter State) and International Students the rental market is characterized by three asset classes:
- Standard Apartment – Vacancy Rate 2.9%
- Furnished Apartment – Vacancy Rate 1.5% estimated
- Rooming Accommodation – Vacancy Rate 0.5%
Both Furnished Apartments and Rooming Accommodation are more attractive to Domestic and International Students as they provide a ‘Turnkey’ Solution to their accommodation requirements. The vacancy rates are lower in these asset classes due to the following benefits they offer to the residents:
Furnished Apartments:
- No need to buy new furniture (Up to 20 different items)
Rooming Accommodation:
- No need to buy new furniture
- Utilities Connected (Water, Power, Gas & Internet)
- No need to find additional house mates
- Fire Compliant (each room fitted with hard wired smoke alarm)
Financial Analysis
Standard Apartment Rental – 5%-5.5% RETURN
- Weekly Rental $750
Furnished Apartment – 5.5% – 6% RETURN
- Including allowance for a $20,000 Furniture Package
- Weekly Rental $820
Rooming Accommodation – 6.5% – 7% RETURN
- Including allowance for a $20,000 Furniture Package
- Weekly Rental $930 ($310 per room + Utilities)
Content Provided by Barber Property Group Editorial Team
