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.
Coronavirus pandemic to slug Queensland’s property prices, industry figures say
For Queensland mortgage broker and property consultant Carolyn Walshe, it is not a matter of if, or when, the coronavirus will hit property prices, but by how much and for how long.
“You’d have to expect that they’re going to fall,” Ms Walshe said.
“The question is going to be just exactly how much — I think the smartest thing that people can do right now is just to hold back and wait and see what happens over the next few months.”
The latest figures show Queensland reached record median house prices for Brisbane, Noosa and other parts of the state in the last quarter of 2019.
Real Estate Institute of Queensland (REIQ) chief executive Antonia Mercorella agreed that COVID-19 would put a dent in that.
“Inevitably we will see the property market impacted by the coronavirus — I think it would be incredibly naive to think otherwise,” Ms Mercorella said.
“We know that a large volume of people will lose their jobs during this time.
“We know that it will completely erode confidence and those things — security and confidence — are very much key to the property market.”
Last night, Prime Minister Scott Morrison included the property sector in the latest moves to limit social interaction.
“Real estate auctions and open house inspections, in particular open house inspections — that cannot continue,” Mr Morrison said.
He said that from midnight tonight they would not be allowed.
Lenders, investors cannot foresee what’s to come
Ms Walshe, who also advised clients through the global financial crisis — suggested the forced shutdowns of parts of the economy, the restrictions on travel and the massive queues for Centrelink all added to the uncertainty.
“The list of instructions that people have to live under is breathtaking, so until we see some endpoint to all of that, it’s going to be very, very difficult to see exactly where the other side is,” Ms Walshe said.
Ms Walshe said the fact the Federal Government had moved the budget from May to October showed neither it nor investors, could foresee what was to come with any certainty.
“I don’t think anyone can have a lot of confidence at the moment until we see things that are far less alarming,” Ms Walshe said.
“Therefore, less property sales will complete until we have some confidence returned to the market and people are back at whatever semblance of normal work is.”
She said banks would be reluctant to lend, as people’s ability to repay loans also looked uncertain.
“Lenders are now going to be seriously looking at [the] possibility of there being lower numbers of borrowers who are in occupations where their income can be absolutely guaranteed,” Ms Walshe said.
Ms Mercorella said while some investors would be reluctant, others might pounce.
“We will see some investors perhaps getting cold feet and making a decision to suspend that,” Ms Mercorella said.
“But similarly, we will see some prospective investors being quite bullish about it and actually looking at this as an opportunity and probably pouncing on what’s available to try and secure a property at a better price, at a lower price.”
Renters and landlords also to come under strain
Ms Mercorella said the REIQ’s immediate concern was tenants facing eviction for not being able to make their rent.
“Around 35 per cent of the Queensland population rents,” she said.
“The vast majority of that supply comes via the private investor, so given the predicted job losses, we are concerned about the impact that will have on a tenants ability to make their rent obligations.
“We don’t want to see renters being evicted on account of non-payment.”
She said the REIQ welcomed any support governments could give to tenants.
“Equally, what we need to be cognisant of is that the vast majority of that rental supply is coming from private investors — mum and dad investors — and they will have their own obligations at the other end to the bank.” Ms Mercorella said.
“So the challenge will be how we protect tenants in this in this environment, but also supporting owners who ultimately — if they don’t meet those obligations — will end up defaulting on mortgages, and ultimately having to sell those properties and losing those properties, which will mean that we all lose.”
Ms Mercorella said there was hope the property market would recover relatively quickly.
She said the Queensland market was robust and recovered well from the global financial crisis.
“Again, we bounced back from the GFC rather well, but I but I do expect that this will be far more severe than that,” she said.
“It will also depend on how long we’re in the situation for, so it really is crystal ball gazing at this stage.”
This article is republished from www.abc.net.au under a Creative Commons license. Read the original article.
Brisbane auction buyers still keen amid COVID-19 fears
As social-distancing measures ramp up in response to COVID-19, public auctions present an interesting challenge for real estate agents. Despite this, a bumper 94 auctions went ahead across Brisbane at the weekend, with a clearance rate of 39 per cent.
“Buyers were cautious walking in,” said Nick Penklis, director of Space Property Paddington, of his auction of the two-bedroom, one-bathroom house at 20 Atthow Avenue, Ashgrove.
“[People] kept their distance. But, having it in the backyard certainly helped a lot, because it can provide private space.”
About 30 people gathered for 15 minutes to watch the auction, with five registered bidders attempting to walk away with the keys. Bidding opened at $700,000, and quickly jumped to $750,000.
Things slowed somewhat after this as bids of $5000 and $10,000 edged the price higher. Eventually, the hammer was dropped, and the house was sold for $885,000.
Despite the need for social distancing and hand sanitiser, buyers were still keen, Mr Penklis said.
“The buyers were there to buy, not to view,” he said. “It wasn’t like ‘Oh, we’ll just see what happens’. That was a strong sign for our market. The only thing we can’t do is shake hands. But, there were smiles all around, within distance.”
The vendors have owned the house since 1997, and have used it as a family home and an investment property. Meanwhile, the buyers are looking to get a foothold in the area.
Auctions in Sydney and Melbourne are under a cloud from next weekend with premiers in those states flagging shutdowns of non-essential activities. No such plans for Queensland have yet been flagged, though it remains to be seen whether coronavirus may bite into Brisbane’s much smaller auction scene.
“We’re not expecting to see an impact on the values of homes but we will see the number of sales fall as people wait and see what is going to happen,” said Real Estate Institute of Australia president Adrian Kelly. “Estate agents are pretty good at adapting in these circumstances.”
Elsewhere, Kosma Comino, of LJ Hooker Sunnybank Hills, sold the five-bedroom, two-bathroom house at 10 Mansfield Place, Mansfield, in Brisbane’s south-east before auction. He said COVID-19 was having an impact on people’s willingness to sell in the short term, but several sellers were still keen to get things moving in the coming months.
“I’ve got a lot [of auction campaigns] launching after Easter, but I think a lot of the sellers are up in the air with what’s going on with the coronavirus,” he said. “At the moment, what we’re seeing is a lot of increase in buyer inquiry, I think there’s a lot of panic buying at the moment.”
On the other side of the city in Brisbane’s inner north, the four-bedroom, one-bathroom house on a spacious 810-square-metre block at 295 Days Road, Grange, sold under the hammer.
Just one party attended the auction, making one registered bidder and an audience of two people. Despite this, the house sold over reserve.
The single registered bidder was a developer, who opened with a strong offer and, after about 20 minutes of private negotiation, the hammer was dropped and the house was sold.
The vendors were two sisters who inherited the house after a death in the family. It was particularly process for them because the house had been in the family since the 1980s.
Selling agent Georgie Haug, of Belle Property Samford, said the successful result was thanks to an incredibly smooth process, as well as the vendor’s willingness to trust her advice.
“I sold the seller’s property in Ferny Grove a couple of years ago for a record,” she said. “So, just the trust and the communication. I took [this] job in a heartbeat because they had so much trust in me to do the right job and get the result. It was just a really beautiful process.”
Closer to the city, the two-bedroom, one-bathroom house at 16 Skinner Street, West End, sold in an incredibly fast auction. About 20 people gathered to watch as two registered bidders battled it out for under five minutes.
Bidding opened at $700,000 and moved quickly to $800,000. Bids continued in increments of $20,000 then $10,000 until the house was sold for $970,000.
Selling agent Keryn Osgerby, of Sold Property Group, said 33 groups inspected the property over the five-week campaign, with the vast majority of interest coming from families.
“It was overwhelmingly young families who wanted to be in the area of lifestyle reasons,” she said. “Second to that would be the schooling benefit, but most of it was all about the West End vibes and lifestyle.”
The buyers fit this bill exactly and will be moving in with their young family very soon. Meanwhile, the vendors live overseas and were using the property as an investment. They sold because of a change in circumstances.
This article is republished from www.domain.com.au under a Creative Commons license. Read the original article.
Brisbane’s real estate sector holds steady: Herron Todd White
Brisbane’s residential real estate sector performs relatively steadily throughout its price cycle, avoiding dramatic dips, swings, peaks and fluctuations, according to the latest report from valuation firm Herron Todd White.
“Long-term property owners tend to do fairly well as long as their asset selection is on the mark,” the March report found.
“There is also a fairly typical range of buyer types. Our first home owners are motivated by affordability and getting the most bang for their buck. Their tick list will obviously be driven by location, but they’re also keen to find decent size allotments, potential for renovation, proximity to amenities and easy access to the CBD or a wellestablished lifestyle hub,” the report continued.
“While many of our first home buyers would no doubt like to buy within the five-kilometre radius, their price point usually means a balance between location and property type and quality. As such, there are those able to cope with a second-hand unit in a prime near-city position, while others will seek a newer home on a larger lot in a suburb a bit further out.”
“Both options could appeal to first home buyers at a similar price point Of note also is that first home buyers are becoming more prominent in our market.”
“The $15,000 state government first home buyer grant (which is limited to new property) and federal government deposit scheme are helping to boost their numbers. Add to that low interest rates as a motivation to getting first timers on the property ladder.”
Conversely, upgraders in Brisbane are looking to draw on increased value in their existing homes to secure better-quality accommodation in their location of choice.
“Their desired suburb will probably be dictated by their households needs. Young professional couples might look to move out of units and head towards a detached home with some renovation potential so there’s opportunity to build fast equity.”
Upgraders are mostly looking for the advantage of more space or larger yards and hopefully improved location compared to their first home – While upgraders will reside anywhere from outer suburbs through to near CBD depending on the budget, many find themselves in mid-range suburbs with easy access to the city.
“Family buyers could almost be considered an advanced subset of upgraders. These buyers are typically driven to certain properties by school catchments, proximity to public transport, parks, amenities and lifestyle amenities.”
“While many family buyers might want to look for renovation potential, there are plenty who are motivated to acquire something ready to live in so as not to tie up their weekends doing upgrade work.”
Brisbane downsizers and empty nesters are looking for low-maintenance homes with lock-and-leave potential to allow for trips out of town – a smaller detached dwelling of good quality and with a low maintenance yard, the report found.
“We are also seeing ever increasing numbers seeking accommodation in high-end units of minimum two (even three) bedrooms. They like the security while still having space for the kids and grandkids to stay. Downsizer locations vary from the CBD through to the bayside suburbs.”
Downsizers are also drawn to large apartments in suburban nodes within close proximity of shopping centres, amenities and hospitals.
The final buyer group highlighted in the report is the business professional – These buyers want to be close to the CBD or suburban nodes so their commute is short.
“Again, low maintenance is a priority as is public transport and lifestyle facilities. It’s suspected that these buyer numbers may well increase from the interstate migrant cohort coming to Brisbane chasing a better lifestyle than in Sydney or Melbourne,” the report found.
“The above list is, of course, not exhaustive. We are seeing a societal demographic shift with the rise of single-person households, multi-generational homes, single-parent families and share ownership among friends.”
“It’s envisaged that these varying household makeups will spur innovative and thoughtful design changes that will become more common over the next few years,” the report concluded.
This article is republished from www.propertyobserver.com.au under a Creative Commons license. Read the original article.
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