A factor to consider is that the growth achieved in 2020 occurred without much involvement from investors, first-home buyers and other owner-occupiers have dominated
This year will deliver a nationwide property boom. I have few doubts about that and my confidence is strengthened by the number of commentators who are now forecasting a year of strong growth. It’s not often we see all kinds of analysts agreeing about what will happen with property prices.
It’s even rarer for economists to publish optimistic predictions. Even the major bank economists are bullish about real estate this year. Pretty much everyone with a public view about the direction of real estate markets – economists, media columnists, various attention-seekers and genuine real estate analysts – have been unanimous in tipping substantial price growth in 2021.
Perhaps the only point of difference among the pundits is how much. But many of them are expecting double-digit increases in median prices. It’s not so long ago that major media, fueled by pessimistic economists, was strident in declaring an impending collapse in property values. The housing market proved the naysayers wrong: 2020 was the best possible advertisement for residential property as an asset class, as most markets delivered growth in defiance of the pandemic.
The latest figures from CoreLogic suggest that all capital cities except Melbourne had price growth in 2020, with Canberra, Adelaide, Darwin and Hobart all rising between 6% and 9%. Sydney (up 4%), Brisbane (4.6%) and Perth (2%) all recorded moderate growth in their house prices, in a year when most of the nation’s cities defied the pandemic and its negative economic impacts. That’s a commendable performance but the capital cities were out-done by many of the regional markets.
house prices rose 12% in Regional Tasmania (compared to 7.7% in Hobart), 8.8% in Regional NSW (compared to 4% in Sydney), 7.8% in Regional South Australia (compared to 6% in Adelaide), 7.3% in Regional Queensland (compared to 4.6% in Brisbane) and 5.5% in Regional Victoria (compared to a 2% decline in Melbourne). Unit markets also did well in the regions, with price increases headed by South Australia (up 11.7%) and Tasmania (up 10.5%). NSW, Victoria and Queensland all recorded unit price rises between 5.5% and 6.5% in the regional areas.
The only regional market to record price decline was Western Australia, which dropped both for houses and for units. These figures show that the momentum for a national property boom is already building and indeed that some markets are already surging strongly. The infrastructure-led economic recovery planned by federal and state government will add to that impetus. Few things generate momentum in residential property markets like big spending on new infrastructure and politicians have shown they are willing to put their budgets into debt to fast-track projects that are shovel-ready or close to it. Another big factor likely to put upward pressure on prices is the level of vacancy rates around Australia.
Outside of the inner-city areas, vacancies are very low in most locations and in some they are so low it represents a rental market crisis. The upward pressure on rentals is considerable, particularly when prospective tenants are offering more than the asking price to secure properties ahead of the competition.
A further factor to consider is that the growth achieved in 2020 occurred without much involvement from investors. First-home buyers and other owner-occupiers have dominated – but there are signs this is changing. I expect investors – who, as a cohort, tend to react to market trends rather than lead them – to be a lot more prominent this year and that will further turbocharge property prices. Outside of those inner-city areas, it’s a great time to be a landlord.
Article Source: www.urban.com.au
Buyer ‘FOMO’ Fuels House Price Surge
A lack of supply is driving the biggest lift in Australian house prices in 17.5 years as auction clearance rates reach new highs.
National housing supply remained at historically low levels, 26.2 per cent below the same time last year, while low mortgage rates, government incentives, access to capital and improving conditions attracted buyers.
This drove house prices up 2.1 per cent nationally according to the Corelogic home value index for February.
The broad-based housing market boom was the largest month-on-month change since 2003 with values increasing across each capital city and state region.
The limited number of dwellings also pushed auction clearance rates to 90 per cent in Sydney for the first time, 82 per cent in Melbourne and 73.4 per cent in Brisbane on the weekend, as seen in Auction Insider data.
February house price growth: Corelogic
^Source: Corelogic Hedonic Home Value Index, at 28 February 2021
Corelogic research director Tim Lawless said the mismatch between supply and demand is a central factor pushing prices higher.
“Housing inventory is around record lows for this time of the year and buyer demand is well above average. These conditions favour sellers,” Lawless said.
“Buyers are likely confronting a sense of FOMO [fear of missing out] which limits their ability to negotiate.
“Vendor discounting rates were estimated at a record low of 2.6 per cent in February, and auction clearance rates have consistently been in the high 70 per cent to low 80 per cent, which is well above average.”
There could be a substantial lift in listings in March with agent activity up 19.5 per cent on 2020 levels according to Corelogic.
Archistar chief economist Andrew Wilson said in Sydney the tight home auction market is likely to continue.
“Sydney’s Central Coast, North West, Northern Beaches and Upper North Shore were the top weekend auction regions, all recording clearance rates above 90 per cent,” Wilson said.
“The lowest clearance rate reported was the West with a nonetheless booming 82.1 per cent result.”
“The clearance rate for units was slightly below that reported for houses at 88.9 per cent.”
“The prospect of sharply higher prices may be encouraging vendors to hold back with signs of lower new listing growth continuing to emerge.”
Article Source: theurbandeveloper.com
Brisbane Officially Top Choice for 2032 Olympic Games
Queensland officials are finalising plans for the $4.5 billion Brisbane 2032 Olympic Games as the hunt for stadiums, venues and infrastructure funding continues.
The International Olympic Committee selected Queensland’s capital as the targeted host for the games bringing “stability” as the committee moves towards a cost neutral event.
The site of the opening ceremony is yet to be finalised with the top picks Metricon Stadium on the Gold Coast, Suncorp Stadium in Brisbane or a completely new venue on the cards.
During bidding, a masterplan was developed with two athlete villages, an 80,000 seat stadium and a second M1 Motorway with final locations to be determined.
The majority of the sports will be held in existing venues with the exception of rowing which requires a new base.
Instead, funding for Brisbane 2032 Olympics will be focused on bringing infrastructure projects forward, which will have a knock-on effect for the property market.
Premier Annastacia Palaszczuk said they already have 85 per cent of the venues for the event.
“It’s a new norm, which means it is a game changer, we don’t have to build huge stadiums that are not going to be used in the future,” Palaczszuk said.
“There is an option of one new big venue in terms of the opening ceremony but we may use Carrara as well, we’ve got to go down to the fine print and make sure we’ve got all the funding lined up.
“We want to include the regions as well, so of course with the football we’ve been looking at the soccer matches up around the different regions and of course all of the state will share in an Olympic glory.”
Lord mayor Adrian Schrinner said this is the best opportunity the state has had in generations.
“Now we need to actually go through and make sure we lock in the plans for improved infrastructure,” Schrinner said.
Queensland is already on the cusp of an economic boom with domestic migration reaching double digits and house prices hitting a record high in January.
Developers back Brisbane 2032 Olympics
Brisbane’s bid for the games dates back to 2015 and some of the state’s biggest property developers have pledged their support.
Consolidated Properties Group chief executive Don O’Rorke said the latest announcement will further build confidence in the property market for both Australians and people overseas.
“There’s going to be an intangible excitement that builds over the next decade,” O’Rorke said.
“Covid has shown Australia is a great place relative to the rest of the world.
“When it comes to the more tangible aspects, there will be construction jobs created doing the build [of Olympics-related assets] and that will be over five to six years.
“The spotlight will be put on Queensland, and you only have to look at Sydney to know what that does.
“We need to ensure the responsible deployment of capital so that stadiums [and other assets] can be used afterwards…and southeast Queensland will become known worldwide as a destination.”
Property Council of Australia executive director Chris Mountford said done right, the Olympics will turbocharge investment in the region.
“Along with facilitating investment in catalytic infrastructure, hosting the Olympics will showcase our region to the world, and inspire confidence in the private sector to invest alongside government,” Mountford said.
“Queensland is already well-placed to capitalize on its success in its handling of the pandemic, and the Olympic spotlight will only accelerate the growth trajectory of the region.”
Brisbane Airport Corporation chief executive Gert-Jan de Graff, Aria Property Group founder Tim Forrester, Hutchinson Builders chairman Scott Hutchinson as well as sporting figures Darren Lockyer, Ian Healy and Duncan Armstrong are behind the push for a Brisbane Olympic games.
Olympic funding strategy shifts
Australian Olympic Committee president John Coates said the IOC do not want countries to go out and spend big money so the three levels of government need to focus elsewhere.
“They’ve got to get in one [mindset] in terms of the funding not for the games but the funding, that this region requires to host the games…the future infrastructure, transport, in particular rail and road,” Coates said.
“The IOC is on a budget of circa $4.5 billion, the IOC puts in $2.5 billion give or take the exchange rate…then you get $1 billion from national sponsorship and $1 billion from ticketing.
“They don’t want to have big costly losses for many cities, you know go back to Melbourne and Sydney, we spent $30 million on those.”
IOC president Thomas Bach said the decision to pick Brisbane aligns with their new agenda for 2020 onwards, as a result of the pandemic.
“It proposes sustainable games in line with the region’s long-term strategy and using primarily existing and temporary venues,” Bach said.
“The commitment of Australia and Oceania to Olympic sports has grown remarkably since the fantastic Olympic Games Sydney 2000.”
Although the city is the only candidate now being considered for the 2032 games there are still a few minor hurdles to jump through before it is set in stone
Article Source: theurbandeveloper.com
Brisbane Housing Market Insights: February 2021
Brisbane housing market insights for February reveals increased demand for houses has been underpinned by increasing consumer sentiment and a surge in interstate migration.
This resource, to be updated monthly, will collate and examine the economic levers pushing and pulling Brisbane’s housing market.
Combining market research, rolling indices and expert market opinion, this evolving hub will act as a pulse check for those wanting to take a closer look at the movements across the market.
So, what were the highlights across Brisbane’s property market throughout January 2021?
Brisbane median house and unit price values
^Source: Corelogic Hedonic Home Value Index – January
Brisbane housing market affordability
|City||Household income to meet mortgage repayments September 2019||Household income to meet mortgage repayments September 2020|
^Source: Moody’s Investor Services – October
Brisbane prestige property ranking
|City||Global ranking||3-month change||12-month change|
^Source: Knight Frank Prestige Property Index – November
Article Source: theurbandeveloper.com
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