With the ongoing rise of property prices in Sydney, RP Data statistics have shown that median house prices come in at $775,000 and a median priced unit will set you back $557,000. That's a price boost of over 15% for houses and almost 12% more for units in 2013.
Until rents can rise similarly, the rental yields will fall for investors and in general higher purchase deposits and getting finance becomes harder for buy-to-let investors. So property hunters may start looking further afield to other capital cities for lower prices and better yields. That means Brisbane and South East Queensland may be the next real estate market to take off.
What companies would stand to gain from growth in that market for home sales and the potential for increased housing construction?
Lend Lease Group (ASX: LLC) constructs unit dwellings and housing developments, it's also an infrastructure and commercial developer. Its strong reputation in the Sydney market will drive buyers to its website and building displays for QLD property.
Stockland Corporation Ltd (ASX: SGP) also develops residential communities and builds commercial and retail property, so increases in people moving to the Sunshine State will benefit it.
Investors should also be familiar with companies like Sunland Group Limited (ASX: SDG), known for its multi-unit construction on the Gold Coast.
For more residential community-development companies, you can research Peet Limited (ASX: PPC), which operates not only in QLD, but also in NSW, VIC and WA. It is has plans to develop a new community called Flagstone, south of Brisbane towards the Gold Coast, in a joint venture with MTAA Super, a national industry-based superannuation fund.
Also, Villa World (ASX: VLW) develops residential communities and develops and sells land lots to builders and consumers. In its half-year guidance this month, it announced that it now expects half-year net profit before tax for the period up to 31 December 2013, to be about $9.3 million, up 86% from the approximate $5 million that was previously announced.
Foolish takeaway
When investors read business news, one of the first questions in your mind should be: "If this is correct, then who gains?" You may not be the first to come upon the answer, but it gets your mind thinking about where to research. Not all of the companies you may read about will be fantastic winners, but research is one of the keys to investing success.
