The Brisbane market is showing meaningful improvement and appears ready for a long overdue boom. Every statistic that matters depicts uplift in the Brisbane market and prices are expected to rise in 2020.
Many commentators have forecast a Brisbane boom in recent years, though many were simply assuming that the Queensland capital would follow the lead of Melbourne and Sydney. Brisbane, however, has lacked the core growth drivers that boosted markets in the two biggest cities.
But, increasingly, growth parameters are lining up for Brisbane. Population data is favourable, the affordability comparison is helpful, surveyed investors say they are targeting Brisbane – and the major piece of the puzzle previously missing, infrastructure spending, is starting to happen.
I have commented in the past: “Brisbane is like a car where the engine is revving but it can’t move forward because the handbrake is on.” Perhaps the handbrake has been released – a growing number of analysts are tipping good price growth in Brisbane this year (including Domain, BIS Shrapnel and Westpac) and I tend to agree.
My Autumn 2020 survey of sales activity reveals 37 suburbs with rising buyer demand, the second best result for Brisbane in the past three years – and almost double the number six months earlier. There has also been a marked decline in the number of problem locations (those classified as declining or danger markets).
Vacancy rates continue to improve, though there are still areas of weakness, and 43% of Brisbane suburbs have delivered annual growth in their median house prices, including double-digit uplift in the strongest areas.
There is particular strength in the northern suburbs of Brisbane – the Brisbane North precinct and the Moreton Bay LGA jointly account for 21 of the 37 suburbs ranked as rising markets. The southside has many of the struggling markets and Brisbane’s inner-city, while improving, still has its problems.
The Brisbane North precinct and its neighbour Moreton Bay Region are the standouts, as they have been in our surveys in the past.
Brisbane North has 13 suburbs classified as rising markets, another 24 suburbs with steady sales activity and none ranked as declining or danger markets.
The uplift in sales activity is producing solid price growth in many of these suburbs, well above the average for the Brisbane metro area. Kedron has recorded annual rises in its median prices for both houses (up 6%) and apartments (up 11%), while Windsor is up 22% for houses and 6% for apartments.
Newmarket’s median house price is up 16%, Northgate has risen 14%, while Stafford, Nudgee and Geebung have all increased between 6% and 8%.
The Moreton Bay Region LGA has regularly been the best-performing Brisbane market, boosted by affordability, good infrastructure and proximity to employment nodes. It’s been overtaken by Brisbane North in the latest survey, but remains a significant market.
The February 2020 opening of a new university campus will boost demand in nearby suburbs like Petrie and Lawnton (Petrie is already rated a rising market and is likely to get stronger as the campus effect clicks in).
Other precincts have some growth markets: Brisbane-east, Brisbane-south and Brisbane-inner each has four suburbs with rising sales activity. Currently these are out-numbered by plateau markets, but I expect that to change as the year rolls on.
The Brisbane-inner precinct is a confusion of suburbs with contrasting rankings: the 22 ranked suburbs in my Autumn 2020 survey include 4 rising, 7 plateau, 1 consistency, 7 declining and 3 danger. The danger markets (Albion, Fortitude Valley and Kelvin Grove) are those where sales activity has dropped markedly, prices are down and vacancy rates remain high. This, however, is an improvement – 18 months ago the Brisbane-inner precinct had 12 suburbs classified as danger markets.
It’s noteworthy that many of the Brisbane locations with solid median price growth in the past year are situated towards the upper end of the market. They include Hamilton ($1,560,000, up 11%), Balmoral ($1,050,000, up 7%), Indooroopilly ($950,000, up 12%), Newmarket ($950,000, up 16%), Rochedale ($1,035,000, up 7%), Sherwood ($935,000, up 7%), Toowong ($890,000, up 10%) and Windsor ($940,000, up 22%).
Inner-city Highgate Hill stands out with good median price both for houses (up 8%) and apartments (up 10%).
Usually, up-cycles in capital city property markets begin at the top end and ripple out from there.
This article is republished from www.propertyobserver.com.au under a Creative Commons license. Read the original article.
Brisbane’s western suburbs rents skyrocket by 20 per cent-plus
Soaring demand for affordable family-friendly homes close to schools and parks has sparked a rental boom across some of Brisbane’s leafy western suburbs, with prices climbing by up to 20 per cent in just 12 months.
The latest Domain Rent Report, released last week for the September quarter, revealed the steepest rent hikes were collected in the middle and even outer city rings of the Queensland capital, with Mount Ommaney claiming the crown for top performer after house rents there rose a massive $138 per week to $690 over the last year.
Cornubia, Fig Tree Pocket and Seventeen Mile Rocks were all hot on its heels after rents rose 19.9 per cent to $535, 17.2 per cent to $700 and 16.1 per cent to $560, respectively. Houses in Scarborough, in the bayside north, saw an increase of 16.3 per cent bring weekly rents to $465.
In the nearby bayside suburb of Woody Point, units topped the leader board after rents jumped 15 per cent to $345, with Camp Hill – in the coveted inner east – winning the silver medal after a 13.9 per cent rise raised weekly prices to $410.
While rents across the city collectively rose to record heights in the September quarter, not all suburbs posted positive growth. House rents in South Brisbane suffered an annual 8 per cent drop to $460. Grange house rents, in the city’s north, also took a dive of 7.6 per cent to $550, with Manly in the bayside south suffering a slump of 5.1 per cent to bring house rents to $490.
In units, the worst-performing suburbs were Sunnybank and Macgregor, which suffered price drops of 5.1 and 4.8 per cent to bring weekly rents to $370 and $400, respectively.
Despite the price fluctuations, the individual suburb data has revealed a growing shift towards affordable lifestyle suburbs amid a new set of rent conditions that Place Estate Agents director of property management Cathie Crampton said were, more than likely, here to stay.
“Demand in the city’s lifestyle suburbs [is higher than ever] and we are seeing people moving to places like the bayside now,” she said. “The typically traditionally strong rental suburbs of Norman Park and Bulimba are still going through the roof in terms of both rentals and sales … but our most improved suburbs are Graceville and Indooroopilly, where people want to move into those school catchments.
“And that’s where we’ve had 0 per cent vacancy in our rent roll.
“But our best performing suburb has still got to be Bulimba,” Ms Crampton said. “It has continued to perform and we’ve had one of the lowest vacancy rates in that suburb for over nine months now.”
According to the Domain report, Bulimba is now the city’s most expensive suburb to rent a house after a 9.3 per cent annual hike sent weekly asking prices to $765.
Kenmore Hills came in at second place after prices rose 7.6 per cent to $710.
While the city’s blue-chip suburbs saw more subdued growth over the past year, it was the hunt for an affordable home close to amenities that sparked the price surge in Mount Ommaney, said Ray White Centenary letting manager Debbie Swales, with the suburb undergoing a coming-of-age off the back of a booming sales market.
“It’s certainly picked up a hell of a lot and when I get a good property – particularly a good family home now – people are desperate,” she said. “There are just too many people needing to rent and it’s mostly because house prices have gone up so much.
“Queensland is just really booming because there’s a lot of push from down south … but I think with Mount Ommaney, in particular, it’s a beautiful suburb and the rent is not astronomical compared to other suburbs. Then you’ve got the shopping centre, it’s really safe and there are the parks and the river.
“I’m now getting people ringing me from the Sunshine Coast and from even the north of Brisbane and they say they are moving here because it’s close to the city but also Ipswich – it’s just so accessible.”
It’s a sentiment shared by Ray White Holland Park department manager Kaitlyn Schneider, who said rents had jumped by up to $150 in the past six months alone as tenants moved further out from the city.
“I think we’ve got great access to the highway … and we’re still affordable and that’s bringing so many people to these places,” she said. “I would say Holland Park to Camp Hill and the pockets between [are on fire].”
The rental renaissance has swept across the city’s once-stigmatised Redcliffe region, said One Agency Redcliffe and Northlakes principal Stephan Siegfried, with prices soaring to record heights off the back of a pandemic-induced lifestyle shift.
“With COVID, people have rediscovered this area – and that happened particularly when we had distance restrictions [last year],” he said. “At one point Margate Beach was like Bondi – you couldn’t move and there were tents and people sunbathing. So Redcliffe has been discovered.
“People have realised this is a great place to be and we’re close to Brisbane. But the other thing that has happened [to push up prices] is the rental stock has been shrinking somewhat because landlords have cashed in on properties, and that’s shrunk the pool a bit.
“And now we’ve got people who have been priced out of the market and have to go further afield,” Mr Siegfried said. “In fact, we’ve seen a large jump in prices and that’s visible and there’s a social disturbance for long-term Redcliffe residents who have lived in affordable properties and are now finding that’s no longer the case.
“While for investors this is great – and I’m really excited because this is a coming of age for Redcliffe – about 12 days ago we had an elderly woman in our office who was in tears because she said she couldn’t afford to live here anymore. So there are two sides to the story.”
The Domain report revealed house rents on MacLeay Island, in the bayside south region, soared by 19.3 per cent over the past year to $325, while Margate house rents rose by 12.5 per cent to $428, with Redcliffe houses rising by 10.5 per cent to $420.
As for Brisbane’s cheapest suburb to rent a house, the report showed the outer pocket of Russell Island boasted a meagre weekly rent price of $300, despite prices rising by 15.4 per cent over the past year.
For units, Sandgate was the city’s most affordable suburb at $255 per week, with prices sliding a slight 1 per cent over the past 12 months.
Article Source: www.domain.com.au
House prices to rise 22 per cent this year, and grow further next: Westpac
Westpac has tipped property prices to rise by more than 20 per cent this year, increasing its price forecast yet again as the market continues to boom despite extended lockdowns.
The bank expects property prices to climb 22 per cent this year, up from a forecast of 18 per cent, and has also lifted its outlook for next year from 5 to 8 per cent.
However, it has warned the property boom is entering trickier territory, with a correction expected from 2023.
Senior economist Matthew Hassan said the property market, fuelled by record low-interest rates, had blasted past price expectations – going well above earlier forecasts for 15 per cent growth this year – with only a slight dampening effect from the latest COVID lockdowns.
Prices rose across the country another 1.5 per cent in September, taking the nation’s median dwelling price to almost $675,000, according to the latest CoreLogic figures. Values are up 17.6 per cent since January, and more than 20 per cent over the past year, marking the fastest annual growth seen since 1989.
Mr Hassan expects prices in Sydney to jump 27 per cent before the end of the year, with values in Brisbane and Hobart also expected to climb more than 20 per cent. Annual price growth of 18 per cent is forecast for Adelaide and Melbourne, and 15 per cent growth is tipped for Perth.
ANZ also expects national growth of more than 20 per cent, revising its forecasts upwards in recent months, while CBA increased its forecasts to 20 per cent, and NAB forecast 18.5 per cent growth back in July.
Westpac’s increased forecasts come after the Australian Prudential Regulation Authority (APRA) announced banks had to lift the buffer rate applied to loan serviceability assessments from 2.5 to 3 per cent, which is estimated to reduce maximum loan sizes by about 5 per cent.
The move came earlier than expected, Mr Hassan said, though he felt its impact on the market would be marginal, given more than 80 per cent of borrowers were not taking out the maximum loan size available. However further tightening of lending restrictions, such as a crackdown on high debt to income ratios, may have a bit more of an impact – particularly on investors with multiple properties.
Still, he expected investor activity to lift from its comparatively subdued levels – accounting for just 25 per of the value of loans over the last 12 months, compared to close 40 per cent over loans over 2015-17 – as affordability constraints squeezed out owner-occupiers.
“That is the real risk factor for the market. The investor segment has been pretty subdued throughout the boom so far… but if there’s a segment that’s going to sustain the boom for longer it’s likely to be investors,” he said, which could drive more persistent price gains near term but also result in a more material correction.
“This is the pointy end of the price cycle, where affordability strains start to price people out of the market altogether, and even if you do have investors coming in in a big way that’s a riskier environment in terms of sustainability in price gains and the tolerance of regulator. We are getting into much trickier territory and the policy side of things is now in play.”
Already, the Sydney and Melbourne markets are 18 per cent and 10 per cent, respectively, above their previous price peaks in 2017-18, a time when both had major affordability problems.
Mr Hassan expects the market to have run out of steam by 2023, forecasting a pullback of 5 per cent as official interest rates rise – though the Reserve Bank still has the first cash rate hike pegged for 2024.
“Even though rates will still be low, it’s about the shift in the direction …the sentiment will be that there is no more scope for [rapid] price growth … and I think that will be the thing that tips us over into a correction,” he said.
Dwelling completions, at a time of low population growth, could also weigh on prices, he added, with more than 200,000 dwellings completed this year – more than double the increase required with slower populating growth.
Oversupply had so far been limited to certain pockets, given the prolonged period of underbuilding that proceeded the latest building cycle, but that may shift if the return to significant net migration inflows takes several years to come through.
Article Source: www.domain.com.au
Queensland tenants secure more rights
The Housing Legislation Amendment Bill 2021 was approved earlier this month
Legislation has passed in the Queensland parliament that will provide more rights to tenants in coming years.
The new laws enact minimum quality standards for Queensland’s 1.8 million renters starting September 2023.
They disallow property owners from issuing a notice to leave ‘without grounds’ providing tenants with more certainty.
They allow tenants to have pets within rental properties in certain conditions. The pet clause commencement date is not yet known, but the changes to renting with pets will allow a property owner to refuse a pet on prescribed reasonable grounds that cannot be addressed by prescribed reasonable conditions.
The laws requires owners to consider the specific circumstances or the specific attributes of a pet request and deter blanket “no pets” rules.
They extend protection for renters who have experienced domestic and family violence.
The Palaszczuk Government passed its new tenancy legislation with some amendments, calling it “striking the right balance between renters and property owners.”
Penny Carr, CEO of Tenants Queensland, the state’s tenant advisory specialists, welcomed the finalisation of the first stage of the reforms, but said they fell short of modernising the laws.
“Our focus will now be to ensure all Queensland renters understand the new laws, how to exercise their rights and meet obligations, without fear of eviction.
“Renters will find it somewhat easier to keep a pet and to have repairs attended to but they will wait until 2024 for minimum standards and will still be subjected to arbitrary evictions.
“These laws are not ones for a modern Queensland as they don’t offer strong enough protections from unfair evictions,” said Ms Carr.
The REIQ says the laws had swung distinctly in favour of tenants.
“Property owners have lost the right to end a periodic tenancy by providing notice,” REIQ CEO Antonia Mercorella said.
“Unless owners can establish limited prescribed grounds (such as the sale of the property) they will never be able to terminate a periodic tenancy.”
The Housing Minister Leanne Enoch has committed to stage 2 of rental reform to begin in the first half of 2022.
Article Source: www.urban.com.au
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