A sobering report by real estate professionals has said property prices are “increasingly unaffordable” and Australians may never own a home.
First time home buyers are all too aware buying their first pad right now is a struggle.
Now that’s been confirmed by the industry itself with real estate professionals darkly warning large numbers of “average” Australians “may never be able to enter the property market” given the inexorable rise in prices.
That sobering residential reality comes as it was confirmed Sydney house prices had soared. The average house is in the Harbour City is now going for $1.1 million with units at $800,000.
A typical Sydney house is now about $117,000 pricier than it was at the end of February. Industry organisation the Australian Property Institute (API) and tech firm The Search People surveyed almost 600 property valuers across Australia to gauge their attitudes to the property market.
Property valuers conduct detailed inspections of homes, looking at the number of rooms and size as well as a property’s condition to ensure it’s fit to be bought or sold, is priced correctly and if any improvements need to be made to make it market ready.
Almost half think property ‘unaffordable’ for average Australian
The report found 59 per cent of valuers believed the Australian housing market was currently in a bubble. While 55 per cent thought most homebuyers were over capitalising on their purchase.
Most damningly, 43 per cent of valuers said property was now essentially out of reach for the “average” Australian.
“The likelihood of owning a home is becoming increasingly low as residential property becomes unaffordable for the average Australian,” the firms stated.
“Aussies may never be able to enter property market.
“Professional valuers believe Australia’s residential real estate prices will continue to rise despite serious affordability and sustainability concerns,” the report added.
There may be a bubble, but in the short term at least that bubble doesn’t seem set to burst, said The Search People’s Rafe Berding.
“Most respondents believe a boom is set for the Australian property sector, however the majority also believe Australia is currently witnessing the makings of a property bubble.
“A combination of record low interest rates and buyers’ uncertainty of investing in other alternatives is fuelling high demand. This coupled with low supply is driving a ‘fear of missing out’ for many buyers.
“As a result, in some cases, properties are being snapped up significantly above the asking price within moments of being listed,” he said.
Sydney, Melbourne, Perth seeing the strongest growth
Almost two-thirds said they saw “continued strong growth” for property values across Australia’s six main capitals in the next six months.
The report said this was a “worrying” trend that would disadvantage many prospective buyers.
More than 60 per cent of those surveyed in Sydney, Melbourne and Perth said they expected prices to rise. In Brisbane, it was even starker with 70 per cent believing a price jump would occur with around 12 per cent of those saying prices in the Queensland capital could go up by more than 10 per cent.
Adelaide is the most affordable capital, but even here more than 55 per cent of valuers have said the only way is up for house prices.
API chief executive Amelia Hodge said the market was firing on all cylinders.
“With record low interest rates, we’re seeing more and more buyers entering the market.
“This is great news for Australians selling property, especially with values on the rise in most sectors and selling times decreasing across most capital cities.”
More than half of those surveyed said Australians should be allowed to access their super to pay for property.
Sydney average house price now $1.1m
Data from property research firm CoreLogic, released on Tuesday, showed prices for all categories of housing rose 3 per cent for the month – one of the largest monthly rises on record.
The median price of a Sydney house is now $1.186 million, while the median unit price is $782,000, according to the data firm.
CoreLogic head of research Tim Lawless said the median house price would likely hit the $1.2 million mark soon – even as early as next month. “It wouldn’t take much growth, it’s nearly there,” he said.
May’s bump in prices was a modest slowdown from March, when values climbed at the fastest pace in 32 years, but the growth still dwarfed price rises across the rest of the country.
Sydney’s price rise was 66 per cent higher than in Melbourne and about 36 per cent higher than the national average.
Mr Lawless said he expected rises to moderate over the coming months as buyers became priced out of the market.
“It will reach a point where fewer buyers can compete,” he said.
Housing supply was also beginning to increase in many suburbs and a further increase would take pressure off of buyers to bid up prices.
A shortage of listings had been one of the biggest drivers of the recent price boom, Mr Lawless said.
Backing up the API report that Perth is set to for a big rise in prices was an analysis by comparison website Finder.
In Perth, property prices were predicted to rise by 8 per cent over the next seven months, adding almost $80,000 to the value of properties, giving them an average value of $609,000.
Australian Bureau of Statistics data from April showed the average deposit needed to secure a mortgage was $106,743 – an increase of 16 per cent since January 2019.
The ACT had the largest home deposit increase since 2019, with the upfront amount required swelling by 24 per cent to $117,790, followed by NSW – up by 23 per cent to $128,469.
Article Source: www.news.com.au
Australian house prices to rise by 15 per cent this year but slow in 2022
Australian house prices will rise by 15 per cent by the end of the year before slowing to just 5 per cent in 2022, a new Westpac Housing Pulse has revealed.
The quarterly report, released this week, revealed markets across Australian capitals are in a “fully fledged, broad-based boom”.
Westpac senior economist Matthew Hassan said all aspects of the market were showing outright strength, with turnover 30 per cent above the national pre-COVID peak.
Prices are 8.5 per cent above their pre-COVID highs, pushing record levels in most markets.
“Everyone is out there looking for any hint of a moderation to this boom,” Mr Hassan said. “So far, there is nothing really that convincing – auction clearance rates have come off slightly, but we are only talking about 2 per cent or 3 per cent and still running around 80 per cent.
“There is nothing but a slight cooling off from ‘red-hot’ to ‘hot’ at best, and it is not really a sign things are about to turn cold,” he said.
The strength of the market had been surprising, but could not continue at such a fast pace, especially if home buyers could no longer afford to get into the market, Mr Hassan said.
“We’ve been pretty amazed by some of the strength the market has shown throughout 2021,” he said. “We do expect it to slow because you can’t expect such vigorous price gains without people’s ability to service a loan [being affected].”
The Reserve Bank and Australian Prudential Regulation Authority (APRA) would be concerned once property prices rose by 15 per cent, which was why Westpac expected some form of macro-prudential intervention in the first half of next year.
That could include tightening the loan-to-value ratios or a cap to investor credit growth, Mr Hassan said.
“It will be a soft landing really — 5 per cent growth is very gentle,” he said.
Strong price gains were happening across all capital cities, particularly Sydney, during the coronavirus pandemic, setting it apart from other housing booms in Australia.
“In previous price rises two to three cities propelled the gains each time, one cycle was Sydney and Melbourne and the cycle before that was the mining states with one or two cities sitting it out,” Mr Hassan said. “That’s just not happening now because all cities are booming.”
Meanwhile, a Finder RBA Cash Rate Survey of 40 experts and economists, released Monday, revealed the average house price could rise by 21 per cent in Sydney — or $216,300 — in 2021.
Over the next six months, that rise is expected to be about 8 per cent.
Finder head of consumer research Graham Cooke said Sydney’s property market continued to soar to record breaking levels.
“To put that into perspective, prices rose by just 4 per cent in 2020 and 2019, and dropped by 8 per cent in 2018,” Mr Cooke said. “A 21 per cent increase would be the highest annual increase for the Sydney property market in recent history, beating the previous record of a 15 per cent rise in 2013.”
Boom towns: Property price peaks spread across Queensland
Queensland has become a real estate gold mine with the number of suburbs and regional areas recording house sales growth hitting record highs.
In less than 12 months, Greater Brisbane has had an almost fivefold increase in suburbs showing housing prices are on the march.
Even more prosperous is regional Queensland, which includes the Gold and Sunshine Coast, which is outperforming city areas across the nation with 157 locations on the financial rise, according to the quarterly Price Predictor Index (PPI).
Overall, Regional Queensland leads the nation with 70 per cent of all locations canvassed are showing a rising markets, compared to 57 per cent in Brisbane, 49 per cent in Adelaide and Melbourne with 47 per cent while Sydney’s data has yet to be tallied.
“The uplift in sales activity in the past six months has been extraordinary,” said Hotspotting property analyst Terry Ryder of Queensland’s fortunes.
The PPI is generally considered a precursor to price growth with both Greater Brisbane and regional Queensland recording their highest figures in the six years the quarterly surveys have been conducted.
To think, less than 12 months ago, when Australia was in the midst of the pandemic, there were just 28 Greater Brisbane suburbs showing a housing price increase.
That number doubled during the following quarterly survey, when 56 suburbs were identified and now a whopping 124 suburbs are showing house prices are steadily increasing in value.
Leading the surge is Yeronga where the median has risen a whopping 38 per cent over 12 months and lifted the median to $1.045 million.
The second biggest gain was made in St Lucia where the median rose 36 per cent and the median price is $1.525 million, third highest in the state behind New Farm ($1.75 million) and Hamilton ($1.54 million).
Next best were suburbs where the median ballooned 20 per cent were New Farm, Highgate Hill ($1.2 million) and Manly ($945,000).
Mr Ryder said the results showed the number of growth suburbs doubled in six months and then doubled again within three months.
“The previous best result in the six years of our quarterly surveys was 80 growth (Greater Brisbane) suburbs six years ago at the start of 2015,” Mr Ryder said.
“At the same time, the number of plateau markets is the lowest ever, while the number of declining or ‘danger’ markets has dropped from 37, eighteen months ago, to just five now.”
The ‘danger’ markets are Fortitude Valley (unit market), Kelvin Grove (house and unit), South Brisbane (unit), West End (unit) tend to be where there are a higher saturation of apartments such as inner-city suburbs.
Leading the charge for rising sales within Greater Brisbane is the Moreton Bay region which includes 31 Moreton Bay Local Government Areas – a record for any LGA across Australia in the survey’s history.
“This means that three-quarters of the ranked suburbs in the Moreton Bay Region have rising sales activity, a circumstance that makes strong price highly likely in 2021,” Mr Ryder said.
Within metropolitan Brisbane, the northside has collectively performed better with 20 suburbs, including Banyo, Chermside and Kedron, showing steady growth in values.
On the southside, Logan City has 17 growth suburbs, followed by Brisbane-south (with 13), Brisbane-inner (11), Brisbane-east (12), Brisbane-west (7) and Redland City (8).
Even though house price growth has included more suburbs on Brisbane’s northside, some of the biggest median house price gains have been made in the inner, western and southern suburbs, according to the PPI.
St Lucia’s median house price has jumped 36 per cent to $1,525 million while the media at Yeronga has rocketed from 38 per cent to $1,045 million.
Trendy inner New Farm has increased 20 per cent to a median of $1,75 million while Highgate Hill ($1.2 million) and Manly ($945,000) have gained 20 per cent in their median prices.
“The uplift in sales activity in the past six months has been extraordinary,” Mr Ryder said.
“In the most recent quarter, 76 per cent of suburbs had some level of price growth.”
One area to miss out the positive momentum being felt elsewhere in the Greater Brisbane area was Ipswich City with only five growth suburbs.
As for regional areas, the Sunshine Coast is going gangbusters with 30 of 41 LGA showing a rising market, while all seven Noosa suburbs are shooting skywards.
The highest growth occurred in the top end suburbs such as Minyama with a 43 per cent increase in the median to $1,315 million while Sunshine Beach was up 47 per cent and a median of $2 million.
There were 31 Gold Coast suburbs that experienced increases in price growth with the median price at Worongary and Miami both up 18 per cent and Arundel and Clear Island Waters jumping 14 per cent.
“Our analysis shows that 81 per cent of regional Queensland locations have recorded price growth in the past year, with most of them rising more than five per cent,” Mr Ryder said.
RECENT BIG PRICE SURPRISES
BULIMBA – $400,000 above the reserve
Noosaville – $810,000 above reserve.
Camp Hill – $300,000 above reserve
East Brisbane – $251,000 above next best offer
Article Source: www.qt.com.a
Brisbane’s property market forecast for strong growth in 2021
Are you wondering what will happen to the Brisbane property market this year?
Well…Brisbane house prices remained resilient last year when other parts of Australia suffered from the economic impact of the GVC (Global Virus Crisis) but they are now roaring ahead in 2021.
A recent report released from ANZ Bank forecasts Brisbane house prices will rise by a strong 16% through 2021, before slowing to 8% property price growth in 2022.
What a turn around from all the pessimistic forecasts all the banks made in the middle of last year.
ANZ senior economist Felicity Emmett expects the Australian Prudential Regulation Authority (APRA) will introduce macro prudential measures to slow house price growth into 2022.
Currently the Sunshine State is shining and has delivered 5.6% growth in the last 3 months and housing prices are up by 8.3% in the past year.
Outstanding demand for lifestyle areas as well as extremely strong demand for detached houses in Brisbane, particularly in the inner and middle ring suburbs has delivered 5.3% overall growth in the last 3 month, with Brisbane’s more expensive properties outperforming.
The resurgence of buyer interest in the Brisbane property market has meant that auction clearance rates have consistently been in the 70% range, which is unusual for Brisbane considering this city is not known for its auction culture like it’s southern cousins, but this is just another suggestion that there are more buyers than there are sellers and this always leads to higher property prices.
At Metropole’s Brisbane office we are noticing more investors are getting into the Brisbane market recognising that while there are no bargains to be found, in 12 months time the properties they purchased today will look like a bargain.
Not that long ago Westpac Bank updated its forecasts and tipped Brisbane prices to surge 20 percent between 2022 and 2023, meaning Brisbane is likely to be one of the best performing property markets over the next few years.
Of course, while some locations in Brisbane have strong growth potential, and the right properties in these locations will make great long-term investments, certain submarkets should be avoided like the plague.
Increased demand for Brisbane houses has been underpinned by increasing consumer sentiment, historically low-interest rates, and internal migration considering the relative affordability of houses in Queensland compared to Sydney and Melbourne.
Similarly, popular areas of the Gold Coast and Sunshine Coast have enjoyed strong demand considering the increased flexibility of being able to work from home and commuting to the big smoke less frequently.
At the same time, property investor activity has been strong, particularly for houses, not only coming from locals but from interstate investors who see strong upside in Brisbane property prices as well as favourable rental returns.
But be careful…there is not one Queensland property market, nor one south-east Queensland property market, and different locations are performing differently and are likely to continue to do so.
Houses remain a firm favourite of prospective home hunters, with demand rising post-lockdown and it remains significantly elevated compared to last year.
However, apartment demand has been sliding and, in general, apartments in Queensland are a higher risk investment than houses, particularly due to a high supply of apartments that are unsuitable for families or owner-occupiers.
To help you make an informed investment decision, I’m going to examine what’s going on in the Sunshine State in detail in this article.
But be warned…it’s a little longer than normal, so if you’re looking for a particular element of the Brisbane property market, use these links to skip down the page.
There are multiple markets in the diverse sprawling city of Brisbane; divided by geographic location, price point, and property type.
And just to make things clear…I’m talking about the property market in Brisbane – not the Queensland property market.
That’s a very different animal!
If you’ve been following my property investment strategy, you’ll know I only invest in capital cities and that’s why I avoid the Sunshine Coast, the Gold Coast, and Queensland’s regional markets which have very different (and fewer) growth drivers than Brisbane and are therefore more volatile.
And not all Brisbane properties will perform well.
In Queensland houses are the preferred style of accommodation over units and investors who buy rental apartments in high supply areas are taking high risk with both equity and cash flow risks materially increasing over buying the right house.
So…is it the right time to get into the Brisbane property market?
Anyone who buys an A grade home or investment grade property in Brisbane now will look back in a couple of years time and recognise they bought a bargain, as this new property cycle still has some years to run.
There is a perfect storm of positive growth drivers that will have Brisbane house prices performing strongly in 2021 and 2022.
- The biggest game-changer has been how quickly our economy recovered. We have experienced a V shape recovery where 90% of the jobs that disappeared have now been reinstated and 97% of mortgages that were put on hold last year are now being repaid.
- This has led to significant increases in both consumer and business confidence.
- Historically low interest rates making borrowing as cheap as it has ever been and therefore holding investments or taking out a home loan very affordable
- The RBA “promised” not to raise rates for at least 3 years, saying it will do everything it can to support jobs, businesses and boost our economic recovery.
- The Senate is debating sweeping changes to remove overly restrictive lending rules. This will give more people access to easier credit, enabling them to borrow more and get into the market.
- Federal Government spending, initiatives, and infrastructure projects
- State Government spending and infrastructure initiatives
But, as I have explained, there are multiple housing markets within Brisbane, based on price point, geography and type of property and as always, you can’t just buy any property and count on the general Brisbane property market to do the heavy lifting over the next few years, so careful property selection will be critical.
Article Source: propertyupdate.com.au
- Property Management6 years ago
7 Common GST Mistakes On Property
- Residential5 years ago
Ipswich Proves Frontier In Affordable Housing
- Infrastructure3 years ago
Decision on horizon for key marina section of huge North Harbour development at Burpengary
- Market Place3 years ago
How to make $1 million ‘flipping’ houses
- Market Place3 years ago
Moreton Bay makes top 10 list of places to invest in property
- Developments3 years ago
Brisbane and interstate investors drawn to up-and-coming King Street precinct
- Infrastructure2 years ago
Watch: Route of Gold Coast’s new ‘M2’ motorway revealed [video]
- Market Place4 years ago
The fastest growing suburbs on the Gold Coast aren’t what you’d expect