Brisbane's property market has had a significant run over the past few years, and investors are still actively asking whether it's too late to get in, or whether there's still a case to be made. As a mortgage broker in Springfield Central, I work with investors at every stage, from first-time landlords to people managing portfolios of five or more properties. Here's an honest assessment of investing in Brisbane in 2025, the loan structures that matter, and the mistakes I see most often.
Why Brisbane Still Makes a Case in 2025
Brisbane has several structural tailwinds that distinguish it from other capital cities:
The 2032 Olympics pipeline. Infrastructure investment tied to the Games (transport, precincts, venues, athlete villages) has an unusually long lead time and is already influencing development decisions across South East Queensland. Major infrastructure spending tends to lift surrounding property values over the medium and long term.
Interstate and overseas migration. Queensland continues to attract strong net migration from both interstate (particularly Victoria and NSW) and overseas. This population growth sustains rental demand and constrains vacancy rates. Brisbane's rental vacancy rates have remained very tight compared to historical averages.
Relative affordability. Brisbane's median house price remains meaningfully below Sydney and Melbourne's. For investors with a given amount of equity or deposit, a dollar goes further in Brisbane than it does in the southern capitals, and rental yields are generally higher.
Economic diversification. South East Queensland's economy is no longer primarily resources-dependent. The region has a growing services economy, a large healthcare and education sector, and significant Defence and construction activity that provides stable employment income across the tenant pool.
None of this guarantees capital growth. Markets don't go up in a straight line and the cost of holding an investment property is real. But the structural drivers are genuine.
Yield vs Growth: Inner Ring vs Outer Ring
The fundamental trade-off in property investment is between rental yield (the income your property generates relative to its value) and capital growth (the long-term increase in the property's value). Brisbane's geography illustrates this trade-off clearly.
Inner Ring (5–10km from CBD)
Suburbs like Paddington, Annerley, Woolloongabba, Coorparoo, and Nundah tend to offer:
- Lower gross rental yields (typically 3.5–4.5%) because prices are higher relative to rents
Inner-ring property is generally a longer-term play. You're accepting lower cashflow now in exchange for holding a scarce asset that has historically appreciated.
Middle and Outer Ring (15–35km from CBD)
Suburbs across the Ipswich corridor, Moreton Bay region, Logan, and the western growth corridors (including Springfield, Ripley, and surrounds) tend to offer:
Many investors I work with in the Springfield area choose local outer-ring property because they know the area, can manage it themselves if needed, and the cashflow position is more sustainable.
The honest answer is that the best suburb depends entirely on your investment goals, your timeframe, and your cashflow position. There's no universally "best" choice.
How Investment Loans Differ from Owner-Occupied Loans
If you're used to thinking about home loans, be aware that investment lending works differently in several important ways:
Higher interest rates. Investment loans carry a higher rate than owner-occupied loans, typically 0.3–0.8% more, depending on the lender and loan structure. This reflects the lender's assessment of slightly higher risk.
Lower maximum LVR. Some lenders cap investment loans at 80% LVR without LMI (compared to 95% for owner-occupied), and policies vary. High-LVR investment lending (above 80%) is available but options are more limited.
Different serviceability assessment. Lenders shade rental income, typically applying 70–80% of gross rent to your borrowing calculation to account for vacancy and expenses. Some lenders are more generous than others in this area.
Separate loan structure. Keep your investment loan completely separate from any owner-occupied loan. Mixing the two is one of the most common and costly mistakes investors make. It can destroy the tax deductibility of your investment loan interest and create accounting headaches that cost you money for years.
Negative Gearing Explained Simply
Negative gearing means your investment property costs more to hold than it earns. If your annual interest, management fees, insurance, and maintenance total $35,000 and your rental income is $28,000, you have a negative cashflow of $7,000 per year.
The tax advantage is that this $7,000 loss can be offset against your other income (such as your salary), reducing your taxable income and therefore your tax bill. If you're in the 37% marginal tax bracket, a $7,000 investment loss reduces your tax by approximately $2,590, meaning the true out-of-pocket cost is closer to $4,410/year.
Negative gearing only makes financial sense if the capital growth of the property exceeds the out-of-pocket holding costs over your investment horizon. It is a long-term strategy, not a short-term one. Properties that are heavily negatively geared in a flat or falling market can destroy wealth rather than build it.
Positive gearing (where rental income exceeds costs) is also achievable in Brisbane's outer ring and is increasingly desirable for investors who don't want to subsidise their investment from their salary indefinitely.
Interest Only vs Principal and Interest for Investors
Many investors use interest-only (IO) repayments during the investment phase for two reasons:
1. IO repayments are lower, maximising cashflow 2. The entire interest bill is tax-deductible; principal repayments are not
However, IO periods are typically limited to 5 years (some lenders offer up to 10 years for investment loans), after which the loan reverts to principal and interest on the remaining term. The P&I repayments can be a significant jump. Plan for this transition.
APRA periodically tightens or loosens restrictions on IO lending for investors. Your broker will know what's currently available and what the most appropriate structure is for your goals.
Using Equity in Your Existing Home to Buy an Investment
If you've owned your home for a few years and prices have risen, you may have built up usable equity, and this is the most common way investors fund their first investment property without needing a fresh cash deposit.
Usable equity = (property value × 80%) − outstanding loan balance
For example: if your home is worth $750,000 and you owe $380,000, your usable equity is ($750,000 × 80%) − $380,000 = $220,000. This $220,000 can potentially fund the deposit and acquisition costs for an investment property without you needing to save additional cash.
The equity is accessed via a top-up on your existing loan or a new equity loan, which is then used as the deposit for the investment purchase. This is a legitimate and widely used strategy, but it increases your total debt, so it requires careful assessment of your ability to service both loans.
How Many Properties Can You Hold? Portfolio Strategy
There is no single right answer to this. It depends entirely on your income, equity, cashflow, and goals. However, a few principles apply:
Mistakes to Avoid
Buying in flood-prone areas. Brisbane has genuine flood risk in many suburbs. Always check the Brisbane City Council flood mapping tool before purchasing. Insurance for flood-prone properties is increasingly expensive and in some cases unavailable.
Body-corporate-heavy apartments. Some apartments (particularly in inner-city towers) carry body corporate fees of $10,000–$20,000+ per year. These fees directly reduce your net yield and can be raised by the body corporate at any time. Always obtain a disclosure statement and review the sinking fund before purchasing any strata property.
New-build oversupply suburbs. Certain outer-ring estates and high-density apartment precincts have historically experienced slow capital growth due to sustained new supply coming to market. Off-the-plan apartments in particular can settle at a valuation below the contract price if the market softens during the construction period.
Not stress-testing your cashflow. Model your holding costs at 1–2% above your current interest rate. If the numbers don't work at a higher rate, the investment carries more risk than it appears at face value.
Not getting independent advice. A mortgage broker can structure your loans correctly. But for property investment strategy (which suburbs, what type of property, what to hold), engage a qualified, fee-for-service financial planner or buyers' agent who doesn't earn commissions from the properties they recommend.
Ready to Explore Your Investment Options?
Structuring an investment loan correctly from the start (separate accounts, right LVR, right IO period, right lender) saves headaches and money down the track. Tom Smith at Kookaburra Finance helps investors across South East Queensland get their financing right, whether it's their first investment or their fifth.
Book a free call to discuss your situation and work out what's genuinely achievable for you right now.