ANZ economists have significantly revised house price forecasts from a bearish 10 per cent decline to a 9 per cent lift in 2021.
The counterweight of low rates and government stimulus has flowed through to housing construction, approvals and sentiment, economists Adelaide Timbrell and Felicity Emmett said.
The peak-to-trough decline will be limited to 2 per cent, with Perth set to benefit from a 12 per cent lift as Brisbane and Hobart follow with gains of more than 9 per cent now forecast.
Sydney prices are expected to rise at about the national average of 8.8 per cent, while Melbourne will continue to lag slightly at 7.8 per cent.
“Our view that house prices would decline around 10 per cent, peak-to-trough, has proven too pessimistic: low rates have trumped factors like elevated unemployment and low population growth,” Emmett and Timbrell said.
Stagnant population growth will continue to weigh on demand and place downward pressure on prices, however the RBA’s latest rate cut has proven a heavier offsetting factor as debt serviceability hits 20-year highs.
ANZ’s latest housing market update comes as auction clearance rates hit 75 per cent across all capital city markets over the weekend. A total 1,739 homes were taken to auction, compared to 2,590—at a 70 per cent clearance rate—the same time last year.
Sydney’s market performed well, according to Corelogic’s weekly figures, returning a 76.6 per cent clearance rate while Melbourne posted a strong post-lockdown result with 603 scheduled auctions returning a 73.5 per cent clearance rate.
Emmett and Timbrell said the momentum will continue as policy and lending support mitigates 2021 labour market risks.
“Owner-occupiers, and particularly first home buyers, are driving the market. Clearly a significant cohort of buyers with stable employment are keen to take advantage of historically low interest rates,” Emmett and Timbrell said.
Investor participation, in contrast, remained well removed from the 30 per cent-plus levels seen in 2015, making up less than 15 per cent of new loans, according to the ABS’ latest lending figures.
Emmett and Timbrell said that the impact of waning demand from investors and new migrants will hit the apartment market hardest.
“The overall weakness in the rental market is flowing through to investor demand, for both established and new housing.
“However, low rates and government stimulus are more than offsetting these negatives.”
“The recent announcement that the Victorian government will spend $5.3 billion on social housing will further lift activity, while news that a vaccine may be widely available by the June quarter will only increase confidence in the housing market.”
Housing market no longer a source of risk: CBA
Meanwhile, CBA head of Australian economics Gareth Aird has indicated that the unprecedented amount of fiscal stimulus means the housing market is no longer a key source of risk.
Aird said the downside risks of lower net overseas migration and house price falls have “diminished materially”.
“It is clear that price falls will only end up being modest nationally. Indeed prices are now rising in most capital cities.
CBA updated house price forecasts in early September for a 6 per cent peak-to-trough decline and a strong rebound in prices in the second half of 2021.
“We believe the risks to our forecasts are skewed to the upside,” Aird said.
“Near-term momentum indicators of the housing market have continued to strengthen and our home price model is signalling that solid price rises could be imminent.
“We no longer expect dwelling investment to be a drag on the economy in 2021 and forecast growth in renovation activity to offset lower new construction.”
The post “House Prices Set to Grow 9pc in 2021” by Ana Narvaez appeared first on the theurbandeveloper.com Blog
Brisbane prestige market surge has arrived as forecast: HTW
Buyers in the prestige sector can probably choose to live in any of Australia’s major capitals, but those who select Brisbane are often pleased at the calibre received at that price point, according to the November report from valuation firm Herron Todd White.
HTW found that back toward the end of last year and heading into 2020, there were early signs the market was about to surge, particularly for detached housing in the inner-city. But the pandemic saw property markets slow from March through to July, with transaction numbers grinding to a crawl.
Owners who didn’t need to sell their homes were holding off listing and buyers, who were filled with uncertainty, were also scarce, however, this seems to have turned a corner in recent months.
David Notley, HTW’s Brisbane Director said, “Queensland’s successful suppression of the virus coupled with our functioning economy has resulted in more action across the prestige sector from August through to present. And it looks to be sustainable, with our market sources saying current activity is similar in Queensland momentum to that experienced prior to the pandemic’s grip. It also appears that prices are holding… and even increasing in some instances. Many will be surprised by this result.”
“Typically, an anxiety-inducing global event like COVID-19 would have severe impacts on the property market, and the prestige sector in particular given the discretionary nature of its buyers and sellers. Instead, Brisbane’s upper-price sector has remained resilient. There’s good demand from local owner-occupiers of course, but interest from interstate appears to be surging too. It seems the chance to relocate to our city, with its excellent lifestyle and relative freedoms (compared to Melbourne, for example) is a magnet for the moneyed up. In fact, once state borders open fully, there’s widespread expectation we’ll see an even stronger market in these upper price points with new Queenslanders looking to come on up and settle both in our capital and on the coasts.”
“Digging down a little and a comparison of prestige property performance in 2020 to the 2019 calendar year reveals very similar numbers of sales in that upper price echelon. Our analysis shows that in Brisbane there were 15 detached dwelling sales above $5 million during 2019. In 2020 to date, there have been 10 confirmed sales with another seven under contract.”
“It’s worth factoring in that 2019 wasn’t a standout year in the $5-million-plus bracket. This was the result of a number of macro financial changes instigated by Australian regulators which constrained available credit, the impact of the recent Royal Commission into the banking sector and the implementation of its findings, the unsure nature of the federal election in early 2019 and the negative media emerging from the southern states throughout this period.”
“The outcome in 2019 was longer selling and marketing periods for properties and, in some instances, a softening in asking prices. But 2020 has proved resilient – even sparkling – and there is an optimism in the air about the coming year. Let’s hope it proves out,” Mr Notley concluded.
Here are a few examples of $4 million-plus apartment sales in Brisbane this year.
350/1 Newstead Terrace, Newstead is under contract for $7.35 million. This fifth-level penthouse is in Pier South.
The property is a fourbedroom, four-bathroom, four-car apartment with a total area of 527 square metres. Apart from the usual high-end fitout and spectacular river views, the Pier South development comes with an onsite concierge service… as you do.
Another cracking sale was 3511/30 Hollins Crescent, New Farm which is under contract for $4.81 million. This is a fifth level apartment in the Mitchell building with views taking in the CBD, Story Bridge and the Brisbane River. The apartment is over 350 square metres in area and provides four-bed, threebath, four-car accommodation.
Also on the luxury apartment list is 3/81 Moray Street, New Farm which sold this year for $4.8 million. The property is on level three of the AQUILA development which has a total of ten one-per-floor residences. It has a prime location, luxe fitout and sweeping CBD views available.
The apartment provides for four-bed, three-bath, three-car accommodation all across 418 square metres of living area.
The post “Brisbane prestige market surge has arrived as forecast: HTW” appeared first on the propertyobserver.com.au Blog
Brisbane set to be Australia’s property market leader: Hotspotting’s Terry Ryder
The Brisbane market has shrugged off the impacts of the pandemic and is in its strongest position in five years to generate price growth. Increasingly, this is translating into evidence of uplift in property values.
Our analysis of sales activity across the Brisbane metropolitan area has identified 56 suburbs with rising momentum, the highest number since late in 2015 and double the number identified in our quarterly survey six months ago.
The numbers show an all-round improvement in the Brisbane market, with a sharp reduction in the number of declining suburbs and a reduction also in the number of danger markets.
Brisbane’s affordability relative to the biggest cities is helping to boost its market, with more people relocating to South-East Queensland from Sydney and other parts of Australia. Brisbane is a natural beneficiary of the Exodus to Affordable Lifestyle trend and is also benefiting from strong consumer confidence as a result of the success in controlling Covid-19.
It’s notable that Brisbane is prominent in the forecasts for prices in 2021 from the major banks. The NAB Residential Property Survey is tipping Brisbane to be the joint leader on dwelling price growth next year, alongside Adelaide and Hobart – with a 7.4% annual rise and similar growth in 2022.
I think this is a tad conservative – and so does ANZ, which is forecasting Brisbane to rise almost 10% next year, with only Perth tipped to do better. Westpac and Commonwealth Bank have also tipped good growth in 2021.
In the six years we have been conducting our quarterly surveys of sales activity and prices, it has been common for northern Brisbane to dominate the positive results – and that is certainly the case in this Summer 2020 survey. Of the 56 suburbs with rising sales activity, 12 are in the Brisbane-north precinct of the Brisbane City Council area and 13 are in the neighbouring Moreton Bay Region.
Both precincts also have a high number of suburbs with consistent sales activity across multiple successive quarters, a notable achievement given the negative pressures in this year of the pandemic.
The rising suburbs in the north of Greater Brisbane include Murrumba Downs (where quarterly sales activity has been 39 44 73), Ashgrove (quarterly sales 54 57 60 72 76 50 78) and Bellara (quarterly sales 23 30 26 40)
While the most prolific markets are in the north, there also has been a notable revival in Logan City in the south. The municipality is the urban bridge between Brisbane City and the Gold Coast and traditionally attracts buyers seeking cheap real estate and good infrastructure.
Logan City markets have been in the doldrums in recent years: six months ago we identified 12 suburbs with a pattern of declining sales, but only five in this latest survey – and there are now nine suburbs with rising sales momentum. At a time when first-home buyers are very active and others are seeking an affordable lifestyle, it’s perhaps not surprising that Logan City would show signs of uplift.
Nearby Ipswich City – another centre of affordable buying in the south-west of the metro area – has only two growth suburbs, so Logan City is the standout of southern Brisbane.
There are growth markets in other parts of the Greater Brisbane area as well – Brisbane-inner (4), Brisbane-east (5), Brisbane-south (3) Brisbane-west (3) and Redland City (5) all have some suburbs with rising sales activity.
There are still six suburbs we classify as danger markets, but that is half as many as two years ago. These are all inner-city suburbs where the market is dominated by high-rise apartments and where vacancy rates continue to be high, in contrast to the rest of the Greater Brisbane Area, and sales rates remain low.
Our analysis of price trends across the Brisbane metropolitan area shows that most suburbs have recorded house price growth in the last 12 months, but an even higher percentage have had growth in the most recent quarter.
This again shows that the city has done well through the pandemic period.
Our analysis shows that 62% of suburbs have recorded annual growth in their median house prices, but 73% have had uplift in the latest quarter.
It’s clear that the top end of the Brisbane market is doing best in this climate, driven partly by the reality that highly-ranked, well-located suburbs in this city often have median house prices in the $800,000s and $900,000s. For people leaving Sydney and Melbourne to relocate to South-East Queensland as part of the Exodus to Affordable Lifestyle, this looks attractive.
Suburbs to record annual median house price growth above 20% include Highgate Hill (28%), Fig Tree Pocket (25%), Nundah (20%) and Windsor (21%).
The inner-city house markets (in contrast to the apartment markets) are doing well, with good annual price growth in Bardon (10%) and Coorparoo (15%), as well as Highgate Hill.
Inner northern suburbs are also performing, including Grange (17%), Windsor and Nundah.
The upper end western suburbs are a standout. In addition to Fig Tree Pocket, there has been strong annual growth in median house prices in Sherwood (12%), St Lucia (14%) and Toowong (13%).
In the south, Yeronga (15%) and Greenslopes (10%) have done well, while in the affordable far north, there has been notable uplift in Woody Point (15%) and Beachmere (10%).
The post “Brisbane set to be Australia’s property market leader: Hotspotting’s Terry Ryder” appeared first on the propertyobserver.com.au Blog
The Queensland properties defying price expectations
As we head towards the end of the year, the Queensland property market is showing no signs of slowing down with the latest CoreLogic index results showing that the Brisbane market is back in positive territory, up 0.5 per cent.
Agents on the ground are seeing a similar trend with many reporting a frenzy of interstate buyer interest resulting in properties selling very quickly and often above reserve.
We spoke to some agents to find how these properties achieved incredible results and their advice for those considering putting their property on the market.
Burleigh Heads property garners international interest
On the Gold Coast, the lifestyle suburb of Burleigh Heads has experienced a dramatic increase of interest from interstate buyers.
According to Mick Brace, Principal of Realty Blue Burleigh, the stalling of buyer activity earlier in the year has turned around with buyers now in full force with demand now outstripping supply.
“We’re seeing buyers that were slowing down and not looking in March/April that are looking now and so we’re seeing a doubling and tripling of buyer enquiries because of that backlog,” he said.
Mr Brace recently sold a five-bedroom architecturally-designed home at 93 Skyline Terrace for $2,250,000, some $50,000 above reserve.
The stylish property garnered both local and international interest.
“We basically were inundated with enquiries.
“There was a mixture of local, interstate and international interest. Buyers from New Zealand, Tasmania, Sydney and Melbourne,” he said.
Despite border closures restricting physical viewings of the property, Mr Brace says that the key factors in the successful sale was to establish trust and good communication with the buyers through utilising technology.
“We basically were inundated with enquiries.”
“We had a lot of run throughs – it wasn’t just one inspection but multiple through different times of the day.
“There was even videoing outside of the house, like driving into town to showcase how long it takes to get there and showing the gradient of the hills coming in and out of the property.
“It was giving the buyer a first-hand feel through the video screen,” he said.
The buyers purchased the property sight unseen from Sydney and plan to move up when borders open.
Mr Brace expects a busy few months ahead as borders reopen and interstate migration resumes.
“My prediction is that the market will be strong through to Christmas and beyond because interstate buyers are not going to be coming in their usual time which would have been in September/October.
“They’re going to come up as soon as borders open so we probably won’t see that slowdown over Christmas like we’re used to,” he said.
For those considering selling, Mr Brace says the most important thing is to talk to an agent in order to get a first-hand snapshot of what is happening in your local area.
“The best time to be selling your house is when not much else is on the market, because the supply is in your favour, and that’s we currently have now.”
“I think the way the market is at the moment, it’s important to talk to an agent and get a first hand understanding of what the market is doing.
“A lot of the information available to sellers on the internet is retrospective so it can actually be two or three months old and may not reflect what is happening in the market right now.
“Properties that were selling six months ago would be selling completely differently now,” he said.
As for when it’s a good time to sell, Mr Brace says it’s all about supply and demand.
“The best time to be selling your house is when not much else is on the market, because the supply is in your favour, and that’s we currently have now,” he said.
Ipswich property market “best I’ve ever seen”
Moving closer to Brisbane and further inland, properties in Ipswich are also receiving a high amount of interstate interest according to real estate agent Jordan Strudwick from NGU Real Estate.
“On the supply and demand side of things, at the moment, the market is super-duper hot.
“We’re getting a lot of buyers from Brisbane, Sydney and Melbourne coming up here,” he said.
Mr Strudwick says that the numbers coming through the agency are astounding.
“The numbers we’re doing at the moment are really unheard of. Last month we sold 54 homes as a business.
“Personally, I sold 14 properties and listed 21 houses, so there’s a lot of properties coming onto the market,” he said.
According to Mr Strudwick, it’s not only listings and sales that are picking up, but the number of buyers attending open homes as well.
“It just keeps getting better and better. I can say this is the best I’ve ever seen the market.”
According to Mr Strudwick, in the Ipswich area, good stock is currently attracting an average of 10-15 buyers inspecting properties during the first weekend on market.
However, with numbers trending up, he’s taken 15-20 groups through multiple open homes, with the highest garnering 25 groups.
Mr Strudwick says that the biggest change he’s seen in the current market is really strong consumer confidence and competition.
So much so that since the start of November, he is nearly selling a house everyday bar Sundays.
“It just keeps getting better and better. I can say this is the best I’ve ever seen the market,” he said.
Mr Strudwick recently sold a 4 bedroom house at 17 Darlington Court in the tightly held area of Flinders View for $590,000.
The owner put the property on the market prior to Covid with another agent but the sale of the property was unsuccessful when the contract fell through.
“I had missed out on the listing because we charge for marketing and have a more expensive commission compared to the agent she chose to go with.
“I took over the property, and sold it the first weekend on the market for $5,000 more than what she originally had listed it for,” he said.
Mr Strudwick says that when choosing an agent, you get what you pay for.
“The cheapest agent isn’t always the cheapest agent. The cheapest agent isn’t the one that’s going to get you the best price for the property,” he said.
Three-bedroom Bald Hills property sells within three days
Further north in Bald Hills, Sales Specialist Jack Harvey from Coronis North says that his market has been flat out since April.
“We’ve sold 42 homes since July and have an average Days On Market of 16 days.
“Average people through the homes would be around 10-12, with multiple offers 90 per cent of the time.
“I’ve been selling real estate for 6 years and I’ve never seen it like this before,” he said.
Mr Harvey says that there are a range of factors that are driving buyers into the market.
“I’ve been selling real estate for 6 years and I’ve never seen it like this before.”
“Stock levels, interest rates, incentives for homeowners are really good.
“I think I saw an interest rate that was 1.98 per cent the other day – which was ridiculous. Money is so cheap, it’s cheaper to buy than rent at the moment.
“We’ve just sold three and listed today. Any stock we’ve got is going pretty quickly,” he said.
Mr Harvey recently sold a three bedroom property at 21 Hearne Street, which sold in three days.
Having sold the property to the owner in 2017 for $409,000, Mr Harvey was looking for offers over $475,000 for the family friendly home.
Once listed, the property sold incredibly quickly and over $20,000 above reserve.
“The property settled this month for $495,500, selling within three days.
“That’s a 20 per cent increase in price in three years,” he said.
Another sold property by Mr Harvey at 85 Brighton Terrace, Brighton was on the market for $999,000 and was sold sight unseen.
“I talked to a buyer on Sunday via FaceTime and pretty much after the inspection they said that they would pay the asking price of $999,000 and bought it,” he said.
The buyers are planning to move up from Melbourne in December.
The post “The Queensland properties defying price expectations” by Emily Ng appeared first on the openagent.com.au Blog
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