Connect with us

Opinion

Property experts expect between 5 & 10 per cent house price growth by 2020

Elanora Waters Property Management, Property Management Elanora

Recently, the Finder survey of 20 economists and experts found 35 per cent believed property prices would rise 10 per cent by 2020, while a further 30 per cent expected increases closer to 5 per cent.

Brisbane InvestorWith a significant spike in house price growth expected, Finder spokeswoman Bessie Hassan said it was “concerning for first-home buyers”.

 “That said, it’s typical of the cyclical nature of the property market. In fact, a 5 to 10 per cent increase is somewhat conservative – it’s a common belief that property value doubles every seven to 10 years,” Ms Hassan said.

“While there was concern about a ‘housing bubble’ or unsustained growth for some time, we’ve now seen a correction phase where the property market has softened yet is likely to go up again in the future,” she said.

Eight of 20 experts surveyed expected prices to rise by 10 per cent by 2020, including Housing Industry Association’s Shane Garrett, LJ Hooker chief executive Grant Harrod and BT Financial Group’s Chris Caton.

Bank of Queensland’s Peter Munckton, Raine & Horne chief executive Angus Raine and St George Bank senior economist Janu Chan thought prices were more likely to rise by 5 per cent.

Already, the winter 2016 season is off to a stronger start than expected with Sydney house prices surging 3.6 per cent in May due to investor buying activity.

A quarter of the panel predicted no change, or a drop in house prices, including former ANZ economist Saul Eslake who predicted prices would stay the same.

QIC chief economist Matthew Peter and Marketing Economics’ Stephen Koukoulas were the only two experts surveyed to predict an upcoming fall in prices by 5 per cent and 10 per cent respectively.

Mr Koukoulas said the fundamental factor was a huge wave of supply coming into the market from the record building boom, particularly in Brisbane.

“Foreign investment rules can also exacerbate the amplitude of a downturn,” he said.

And then there’s the risk of changing demographics, with population growth “clearly slowing” and immigration tapering off, he said.

“Then you throw in the cyclical elements, investor lending being tightened and the weak growth in rental yield that [make investing in property] harder to justify when you’re getting a dismal rental yield,” he said.

But it isn’t going to be a collapse in property prices, he said, expecting something closer to the fall seen after the Global Financial Crisis.

“It was an ordinary fall, no panic, no melodrama,” he said.

“It was a bit of a measured fall, [home owners] hunkered down and no one got burnt. Banks didn’t have a significant change in their arrears levels. That’s the sort of rough scenario I’m thinking will be happening here.”

Mortgage Choice chief executive John Flavell, predicting a 5 per cent increase by 2020, said the fundamentals of the property market remained strong, with historical low interest rates, continued population growth generally and unemployment rending downwards.

“With that in mind, we would expect to see continued growth in property values over the short to medium term,” Mr Flavell said.

“While this rate of growth won’t be as strong as the growth we have come to expect in recent years, it is reasonable to assume that property values will continue to climb.”

Domain Group senior economist Andrew Wilson, who predicted up to 10 per cent growth, said the future would be more stable but even 3 per cent growth a year was “optimistic”.

“We don’t have the capacity to drive higher levels of economic activity, which could spur on the property market, and even if we do it won’t have the fizz it has had in previous cycles,” Dr Wilson said.

“We won’t get the 10 per cent growth every year result we’ve had in Sydney in recent years,” he said.

 

Original article published at www.domain.com.au by Jennifer Duke,  7/6/16

Brisbane

Travel bans fuel Brisbane’s $30 million auction splurge

Brisbane

Expats and upgraders are splashing major cash on prestige properties across Brisbane with more than $30 million in real estate transacted from 38 auctions on Saturday.

The auction clearance rate was 81 per cent, compared with just 22 per cent this time last year.

Off the back of continued travel bans, property punters say buyers are continuing to pour millions into homes instead of holidays, and stranded Aussies are fuelling the prestige market from afar for fear if they don’t buy soon, they’ll miss out when borders open.

It’s a trend McGrath Estate Agents Cleveland agent Pamela Neilson said had spurred more than a handful of top sales in her area in the past few months, and one that helped her clock the city’s highest recorded auction on Saturday, after an upgrader forked out $4.35 million for a Raby Bay mansion.

 Brisbane

11 Grenoble Place, Raby Bay QLD 4163

“I’m seeing more transactions now between $2 million and $3 million (than I have in a long time). We’re finding this market is just continuing to move and I can’t see it quietening down,” Ms Neilson said.

“The biggest thing is expats at the moment and I have clients from London to Chicago, all wanting to come home but they want to get into the market now.

“I sold two [sight unseen] to expats just last month.”

 Brisbane

Marina views from 11 Grenoble Place, Raby Bay.

Although it was a local buyer who scored the winning bid on the sprawling Ray Bay home at 11 Grenoble Place, Ms Neilson said the incredible result was indicative of the sheer appetite for luxury homes in the Queensland capital, and also in Raby Bay, where high-end sales had surged in the past six months.

“We had 52 groups through the property and five offers prior to the auction. I think the massive land size of 2479 square metres [fuelled the interest] but also the big pontoon, the glorious views and the tennis court,” Ms Neilson said.

“It all needs updating, but it’s just so private, and after a renovation this property could be worth between $7 million and $8 million.

“The Raby bay area is also a lot stronger [than it has been in years]. The area is getting more attention now – people are finally waking up to it and the people trying to move in have probably missed out.”

Ms Neilson said it was only back in August the suburb price record was smashed with the $8.5 million sale of 1990s Aussie pop star Daniel Jones, of Savage Garden.

In the inner city, an old cottage on a tiny parcel of land clocked an incredible $1.55 million under the hammer on Saturday, after six registered bidders battled it out for a minuscule piece of dirt in “Brisbane’s best suburb”.

 Brisbane

210 Arthur Street, Teneriffe QLD 4005

The green and yellow four-bedroom abode, at 210 Arthurs Street, Teneriffe, occupies just a 256-square-metre block but with houses frequently clocking more than $2 million in the chic neighbourhood, selling agent Brett Greensill, of McGrath New Farm, said the home was a little piece of gold.

“It´s a small slice of land but, of course, Teneriffe is the most expensive suburb in Brisbane so to get a little slice of the best suburb [is still fantastic],” Mr Greensill said.

“We had six registered bidders, and there was an excellent crowd. The lady who turned out to be the underbidder started off with a cheeky bid of $600,000 but then the next bid was about $1.1 million.

“The reserve was $1.5 million, so we sold it for just over, and five of the six bidders were local.

“I actually sold this house in 2013 for $815,000 when it was first renovated. Here we are not even 10 years later and it has almost doubled. And, in the past six months (alone) this house gained probably 10 per cent (in value).”

Mr Greensill said the sale was another top result in a booming market where houses in particular were streaking ahead of apartments amid insatiable buyer appetite.

“Brisbane has always had headwinds of varying degrees but since Christmas we’ve had tailwinds (in the housing market).

“We have also had lots of conversations with expats recently.”

Other high-end sales across the city included one of Highgate Hill’s original homesteads at 77 Hampstead Road, which sold for $2.6 million through Luke Croft, of Ray White South Brisbane.

Brisbane

UNDER CONTRACT 77 Hampstead Road Highgate Hill QLD 4101

Built about 1890, the seven-bedroom, five-bathroom home mixed modern chic with heritage touches after an incredible architecturally renovation.

Under the $1 million mark selling agent Bevin Powell, of Ray White Annerley, set an office record for registered bidders after 30 hungry home-hunters battled it out for a four-bedroom brick home at 3 Appleyard Crescent, Coopers Plains, which sold for $816,000.

“This was an amazing auction, the property market is still hot right now but having said that, I’m not sure we’ll have another auction like this one for a while. The winning bidder purchased the property for their parents,” Mr Powell said.

 

Ray White Queensland chief auctioneer Mitch Peereboom said across their Brisbane agencies top results were fetched alongside soaring clearance rates with the high-end sector swelling.

“The marketplace is particularly strong in the $800,000 to $1.5 million range. We know buyers are selling and then have been looking to upgrade and that bracket is performing excellently,” Mr Peereboom said.

 

Article Source: www.domain.com.au

Continue Reading

Opinion

Property Industry Expects Interest Rate Rise

Property industry confidence levels are near record highs but there are rumblings that interest rates could to increase soon.

The ANZ/Property Council industry survey for the March quarter found confidence levels has improved drastically since the pandemic started, led by the residential sector.

The survey canvassed the views of more than 830 respondents—including, owners, developers, agents, managers, consultants and government—across all major industry sectors and regions.

The results revealed respondents also believe there will be an interest rate increase during the next 12 months.

This comes as the Reserve Bank of Australia closely watches the housing market as “cyclically low-interest rates and rising asset prices create a risk of excessive borrowing”.

According to the RBA financial stability review, this could lead to financial instability particularly if lending standards are weakened, which could expose lenders to large losses.

Interest rate changes

Property Industry

^Source: RBA 

For the meantime, the Reserve Bank decided to hold the official cash rate at 0.1 per cent for the fifth time in a row.

Despite expecting an interest rate rise, survey respondents were confident about work expectations, national growth and house prices in the next year.

Property Council of Australia chief executive Ken Morrison said the expectations for house prices were at the highest level in the survey’s 10-year history.

“When the property industry is confident it is exceptional news for the entire national economy because it employs so many people—more than 1.4-million Australians,” Morrison said.

“While the economy still faces significant challenges, the property industry is clearly buoyed by the speed of our turnaround and the strong demand they are seeing, particularly in the residential and industrial sectors.”

ANZ senior economist Felicity Emmett said that for now the combination of record low mortgage interest rates and targeted stimulus was clearly supporting the housing sector.

“Property sentiment has improved again, reflecting stellar economic performance, a large pipeline of work for the coming year and a strong outlook for property prices,” Emmett said

The survey also revealed an easing of concerns about the office sector as more CBD workers return to their work places.

 

Article Source: theurbandeveloper.com

Continue Reading

Brisbane

Property confidence stages remarkable comeback

property

The latest results from the ANZ/Property Council Survey reveal surging confidence levels in Queensland’s property sector, despite the slower than anticipated return of workers to major business precincts.

Property industry sentiment in Queensland bounced from 124 points in the December 2020 quarter, to 144 index points in the March 2021 quarter. The result shows that industry confidence has nearly tripled since the height of the COVID pandemic, when a low of 58 index points was recorded during the March 2020 quarter. A score of 100 is considered neutral.

Property Council Queensland Executive Director, Chris Mountford, said the results were nothing short of phenomenal, however, it was critical that the positivity was not taken for granted.

“The results highlight a remarkable recovery for Queensland’s property sector, which proved resilient throughout the challenges of last year and is now spearheading the State’s economic recovery,” said Mr Mountford.

“The industry has recorded strong results on most metrics of success, from crane counts to property clearance rates, to our own quarterly confidence surveys.

“However, we do need to maintain some degree of caution as these positive results were recorded prior to Brisbane’s most recent lockdown, and while the benefits of Government stimulus programs continue to be felt.

“It is well documented that these lockdowns cost our economy millions and impact on the confidence of employees to return to their places of work.

“Office occupancy within Brisbane CBD has stagnated at circa 63 per cent, showing the road to recovery for our city centres has clearly not been as smooth as in other property sectors.

“With the end of JobKeeper and the ever-present spectre of another lockdown, there is clearly a need to support our CBDs and the many businesses that rely on the daily visitation of workers, students and tourists to make ends meet.

“Over the coming months, the Property Council will be working with its members, Brisbane City Council and the Queensland Government, to implement a plan to support our city centre and ensure it continues to drive Queensland’s economy,” concluded Mr Mountford.

 

Article Source: www.miragenews.com

Continue Reading

Positive Cashflow Property

duplex designs, dual occupancy homes

Property Investment Advice

gold coast property management

Trending