While most major property markets struggle to stay afloat, Brisbane market is believed to be exhibiting resilience yet again. How will the Queensland capital city market fare in the remaining months of 2020?
Despite the overall median data trend showing slight falls in house values, Brisbane continues to witness a significantly high demand for quality housing, according to property professional Melinda Jennison.
“Over July, some open homes we have attended over the month of July have seen more than 30-40 groups through. This illustrates that buyers are still very active in the Brisbane property market,” she highlighted.
“Advertised properties that are listed for sale in desirable locations are being sold very quickly in Brisbane. Often, the sale is a result of multiple offers being submitted on the property. If listed for sale by auction, they are achieving high prices with multiple registered bidders.”
While Sydney and Melbourne lead the fall in capital city values with as much as a 1.2 per cent decline, Brisbane continues to witness strong prices still being paid for quality properties in many regions around the city, as well as several properties being traded off-market.
Ultimately, the COVID-19 outbreak has not resulted in a measurable fall in property prices across Brisbane, so buyers should not expect a bargain brought about by the pandemic, according to Ms Jennison.
House prices across Australia have fallen by 2 per cent, while unit prices are down even further at 2.2 per cent over the quarter, according to the latest edition of the Domain House Price Report.
While all major capital cities saw unit prices fall, house prices fell in most of them except Adelaide, Canberra and Hobart.
Brisbane, in particular, saw property values drop by just 1.4 per cent over the quarter – buffering price falls better than Sydney and Melbourne.
Over the month of July, the latest Hedonic Home Value Index data by Corelogic found dwelling values in Brisbane declining by 0.4 per cent.
Median house values for the greater Brisbane region fell by -0.3 per cent over the month, bringing the median house value to $555,284, while unit median values declined by -0.5 per cent, bringing the median unit value to $384,681.
According to Domain, Brisbane is showcasing a “two-speed property market” as Brisbane City, Moreton Bay, Scenic Rim and Somerset house prices all fell over the quarter, while Ipswich and Logan remained stable.
Domain’s Dr Nicola Powell said: “Prior to COVID-19, there was promising growth in prices for Greater Brisbane. Although this has reversed over the quarter, the fall in prices to date has been minimal considering the economic aftermath of border closures and shutdowns.”
“An initial pullback in seller and buyer activity during the lockdown acted to underpin prices, government financial support has kept distressed or urgent sales minimal, and incentives have encouraged buying journeys to begin.
“The outlook for residential property has improved vastly in recent weeks.”
Ultimately, despite value losses across major capital city markets, Domain noted that the impacts “have been minimal” as the expected drastic price falls were buffered by significant government stimulus, mortgage holidays and the continued low-interest rates supporting home values that have also kept distressed and urgent sales low.
Supply and demand
For the week ending 26 July, CoreLogic found that, of the 1,315 reported auctions, 54.1 per cent returned a successful result, which is an improvement from the week prior when a 53.1 per cent final clearance rate was recorded.
In Melbourne, 540 homes were scheduled for auction, but less than 50 per cent of these returned a successful result.
In Sydney, the final auction clearance rate fell across a higher volume of auctions last week as there were 594 homes taken to auction, which returned a final auction clearance rate of 60.6 per cent, lower than the 61.4 per cent over the week prior when 515 auctions took place.
Across the smaller cities, Canberra was the best-performing capital city, with 77.6 per cent of homes selling at auction. However, this was lower than the week prior when an 88.6 per cent final clearance rate was achieved.
Following Canberra’s results are Adelaide (60.7 per cent), Brisbane (43.9 per cent) and(28.6 per cent).
Over the quarter, unit rental yields fell by 3.2 per cent (equivalent to $15 per week), marking the biggest drop in more than 15 years as COVID-19 pushed landlords to reduce rates, Domain’s latest research found.
House and unit rental prices fell across most major capitals, with Sydney and Hobart unit rentals hardest hit.
According to Dr Powell: “The rental market has become highly fragmented in recent months. With weaker conditions for units compared to houses, tenants have a better chance of nabbing a cheaper unit.”
“This weakness has been led by significant rent reductions in Sydney and Melbourne inner-city areas due to a surge in advertised rentals from March to June.”
Meanwhile, Brisbane house and unit rents also fell over the quarter, but year-on-year data showed that rents remained flat.
At a city level, the rental market in Brisbane has definitely recovered, according to Ms Jennison.
With over 1,200 REIQ property management member agencies surveyed throughout Queensland, results show that only 6.05 per cent of residential rental tenants qualified as “COVID-19 impacted” under the state government’s COVID-19 Emergency Response Regulation. This represents approximately 3,950 renters from a state total in excess of 577,000 residential tenancies.
However, there are still some at-risk markets around the city, particularly in terms of the imbalance in supply and demand.
While Brisbane real estate has not been impacted like other cities with international border closures, plummeting foreign student numbers, job losses and pay cuts have still made their mark, with Brisbane’s CBD particularly exposed to reduced rental demand.
“The vacancy rate in many locations is trending down and is very tight. The areas where this trend is not happening are in the Brisbane CBD and locations immediately surrounding this and also in areas where there are a lot of higher-density unit developments. In these locations, vacancy is still a big problem. Therefore, these markets remain high-risk,” she said.
Moving forward, there remains a lot of worry and concern about what might happen to property values across the country when the government’s fiscal response starts to taper in October and repayment holidays expire at the end of March next year.
For one, experts are forecasting a rise in distressed properties coming to the market.
However, they have yet to see whether this would also mean any downward pressure on prices.
“This is where I think the different property markets around Australia will each experience something slightly different,” according to Ms Jennison.
According to the Commonwealth Bank Home Buying Spending Intentions Index, there was a 6 per cent rise in home buying intentions nationally up to the end of June 2020. This index showed the index had returned back close to levels seen in March – after much weaker readings in April and May.
“We are definitely seeing this trend on the ground with the current high volume of buyers in Brisbane. Because of this, I’m sure we could see some moderate increase in new listings come to the market without any significant impact on the supply and demand balance,” she highlighted.
“Remember, property prices will only fall when supply outstrips demand.”
With dwelling approvals now at the lowest level in eight years, the future supply pipeline also looks tight. The most recent Australian Bureau of Statistics data showed a decline of -10.9 per cent in new detached house approvals in Queensland.
Overall, real-time demand remains strong in Brisbane as property buyers are being fuelled by the lowest-ever interest rates, good levels of affordability and strong rental yields compared with many other state capitals.
Amid economic uncertainties, Atelier Wealth’s managing director Aaron Christie-David said that conditions are likely to be more difficult in the short-term, but those with a long-term view will most likely prevail.
“For investors wanting to sell, days on the market have increased as has vendor discounting, which could further impact median prices,” Mr Christie-David highlighted.
“The good news is that while yields have been trending downward, in May rental yields recovered by 3 basis points. There continues to be opportunities for investors, with supply at record lows and demand strong in certain suburbs.
“Areas which will benefit from First Home Buyer incentives and where incomes and jobs have been less impacted by the economic downturn will remain attractive to investors and will withstand any potential deeper price falls from September.”
Home upgraders will also have good opportunities in today’s market, according to him.
“Falling property values will allow for upgraders to access better homes. Steeper falls will lead to better discounts, but will also affect those opting to sell their PPOR. Record low-interest rates are also making purchases much more affordable,” he said.
Meanwhile, first home buyers will have government incentives, record low-interest rates and falling prices providing them opportunities.
Mr Christie-David advised them to focus on saving for their deposit right now so they could take advantage of the dropping property values.
“The higher the deposit, the lower the [loan-to-value] ratio (LVR) which may potentially allow you to avoid lenders mortgage insurance… If rates fall again or remain steady, this can provide good opportunities for first home buyers,” he said.
While there’s no certainty about the future of the property market, Mr Christie-David advised investors to avoid panicking and, instead, watch the market closely.
As September is a potential danger zone, he strongly encouraged undertaking extensive and engaging professionals in order to assess how any investment decision will affect their portfolios in the short, mid and long-term.
For those keen to buy, Propertyology’s head of research Simon Pressley highlighted five major government projects in Queensland that are tipped to lift the housing market:
- Inland Rail project: A $10 billion 1,700-kilometre rail infrastructure project connecting ports in Melbourne and Brisbane to meet demand for an anticipated 75 percent increase in Australia’s freight over the next decade. The inland route was strategically chosen to more efficiently transport food and general cargo throughout the eastern states and to reduce the volume of trucks on highways. Completion of the project will provide enormous scope for Australia’s vast agricultural precincts to ramp up production as a global giant food supplier. The post-construction economic benefits for regional communities will be substantial and will have a positive influence on property markets in communities such as Seymour, Bendigo, Shepparton, Albury-Wodonga, Wagga Wagga, , Parkes, Dubbo, Narrabri, Armidale, , Toowoomba and Beaudesert.
- Australia-Singapore Military Training hubs: The Australian and Singaporean federal governments have signed an agreement for Australia to provide advance military training to 14,000 Singaporean military personnel every year for 25 years. Singapore has committed to investing $2.25 billion, which will benefit Townsville and Rockhampton through facility infrastructure development. In addition to construction jobs, the 25-year provision of goods and services to trainees will provide long-term economic benefits for Rockhampton and Townsville, increasing the demand for real estate in both regional cities.
- Maroochydore City: A $430 million development of a modern CBD for the Coast. The region’s population grew at a higher rate than any other location in Australia over the last decade. The new Maroochydore city centre development will include commercial, retail, high and medium-density residential development, high-speed internet, parklands, waterways and bicycle tracks.
- Queens Wharf: A $3.6 billion world-class entertainment precinct in Brisbane’s CBD, meaning that Australia’s third-largest city will (finally) have a world-class precinct to rival Melbourne’s Crown entertainment and Sydney’s Barangaroo precincts. Due for completion in 2022 and developed across five city blocks, this game-changing project will attract a staggering 1.39 million visitors per year, bring billions of dollars to the coffers of Brisbane’s economy each year, create approximately 10,000 new jobs and breathe an exciting new energy into the Brisbane community.
- Hells Gate Dam: Agribusiness and general economic development for northern Australia will be big winners from this $5.3 billion irrigation and energy project by constructing an enormous dam on the upper Burdekin River, north of Charters Towers. According to a viability assessment conducted by Townsville Enterprise, if Hells Gate Dam is developed to full capacity, it has potential to inject billions of dollars into the North Queensland economy. The property market beneficiaries of this game-changing project will be Cairns, Townsville, Innisfail, Ingham, Ayr and Charters Towers.
This article is republished from www.smartpropertyinvestment.com.au under a Creative Commons license. Read the original article.
Brisbane apartment market in the spotlight: Media Hunt’s May update
The media veteran Steve Hunt has cast his eye over the Brisbane market and what’s happening in the Queensland capital
The Brisbane apartment market continue to show strength over May, posting 1.1 per cent gains, CoreLogic’s monthly Hedonic Home Value Index found.
The rolling quarterly apartment gains are now up to 3.2 per cent, with the median apartment price reaching $411,000.
The media veteran Steve Hunt, who founded the public relations and media strategy firm Media Hunt in 2005, has cast his eye over the Brisbane market and what’s happening in the Queensland capital.
Hunt mentioned The Fernery, which has been popular with local owner-occupiers
Urban recently spoke to Colliers residential director Andrew Scriven, who said most of the buyers have come from a couple of kilometre radius.
“There’s been overwhelming success since launch in April from the local market, looking to either downsize, invest or secure something for the children,” Scriven said.
“Locals have really embraced the project. They haven’t really had that offering ever.”
The project by the Townsville-based Honeycombes, in partnership with their financier MaxCap, will comprise the 82 apartment block The Fernery, as well as a 12,000 sqm retail centre set next to the Ferny Grove train station.
Article Source: www.urban.com.au
Multimillion-dollar deals fuel record auction day in Brisbane
A record-setting $43 million in real estate sold under the hammer across Brisbane on Saturday in an incredible feat of strength that has revealed the city’s soaring market is showing no signs of slowing.
From the 71 auctions reported 63 transacted to achieve a 89 per cent clearance rate, compared with 65 per cent last week and a meagre 33 per cent this time last year.
It’s also the highest amount fetched in a single day of Saturday auctions in more than six months, with several multimillion-dollar properties sold amid reports of fierce bidding wars.
Although one of the top sales included a sophisticated Queenslander at 92 Elfreda Street in Enoggera, which collected $2.301 million through Place Estate Agents Newmarket, it was a laid-back family suburb on the outskirts of the city that stole the show after hundreds of buyers and onlookers flooded three separate auctions, resulting in milliondollar-plus sales.
Wishart, which is 14 kilometres from the city and has a median house price of just over $800,000, could have been mistaken for an inner-city borough after the three homes collected a combined $3.644 million. Property punters said house prices in the increasingly popular patch have risen by as much as 25 per cent in a year.
Ray White Annerley principal Geoff Sellars sold a dated, low-set brick abode on a 646-square-metre block at 106 Delavan Street to two first-home buyers for $1.067 million on Saturday, and said the price and number of bidders told more than just a tale of the city’s soaring market, but also of a suburb where demand was skyrocketing.
The young buyers were forced to compete against 35 registered bidders for the modest four-bedroom house, forking out $217,000 over the reserve price in front of a crowd of more than 150.
“Wishart has always been fairly popular as well as the Mansfield area, there are people who just buy there to be in the Mansfield High School catchment, but not in the like of what we’re seeing at the moment,” Mr Sellars said.
“There’s an enormous amount of confidence in the market and it becomes a snowball effect. Interest rates are low and people have just prioritised buying property over things like travel and I think the bank of mum of dad is the fifth biggest bank in Australia right now so a large majority of buyers are first home buyers. The confidence over the past 12 months has driven them to that point but a lot of their parents are fronting up money (to help them get their deposit over the line) as well.
“And, in Wishart, I would have thought 106 Delavan would be lucky to be a mid-$700,000s property so there has been a 25 per cent price increase here in some parts.
“At its worst, I think this is the new normal and we have set new average prices for a lot of suburbs. I don’t think we’ll go down from here and there’s definitely the potential for things to strengthen.”
LJ Hooker Sunnybank Hills agents Rob Senic and Kosma Comino sold the other two Wishart homes under the hammer on Saturday, collecting $1.45 million for a contemporary abode at 44 Craig Street and $1.127 million for the slightly rundown four-bedroom house at 22 Cotswold Place.
It was the Cotswold Place property that Mr Comino said attracted an almost rockstar turnout, leading to a 45-minute auction, about 50 bids and a sale price that was $127,000 above the reserve.
“While I knew it would be a good auction because that part always does well, we were thinking it would sell for a maximum of $1,030,000 but then, during the auction, we had a lot of people rock up late and we had a total of 15 registered bidders,” he said.
“From the 15 registered, we had six of them really fighting for it – they were a very mixed group. The bidding opened at $800,000, and it was really rapid then on the fifth bid we hit the reserve.
“A family ultimately won the auction and it’s funny because they had actually missed out on the last two auctions with me in that pocket.”
Mr Comino said first-home buyers and young families looking to upgrade into their second home were making up a large portion of the buyer demographic, with that enticing school catchment attracting half of the buyers, and the suburb’s location being the “X-factor” for the rest.
“You’re also close to the motorway and then you’re close to Westfield Garden City – in fact, if you drive through there now, it’s busier than the city centre. It’s gotten crazy there now.”
Elsewhere, Ray White Carina agent Jose Peralta sold a striking four-bedroom family oasis at 22 Faraday Street in Camp Hill for $1.401 million, and next door in Norman Park, Paula Pearce, of Place Estate Agents Bulimba, sold a modern Queenslander at 64 Morehead Avenue for $1.675 million under the hammer.
In Northgate, Ray White Aspley agent Dwight Colbert transacted the meticulous four-bedroom abode at 26 Mann Avenue for $1.07 million in an auction he said attracted nine registered bidders before fetching $120,000 above the reserve price.
“They were all local buyers and many with young families but in the end it was a retired couple who bought the place as they have six grandchildren. My sellers are upsizing and have bought at Nudgee Beach as they have three children and want some more room,” Mr Colbert said.
“There’s still a lot of desperation for good stock, and it feels like a shortage of listings which I know is helping with competition.”
Article Source: www.domain.com.au
This is how long it takes Brisbane first-home buyers to save for a house
Brisbane first-home buyers have bucked a nationwide trend. They are now taking less time to save for a deposit, with closed borders, government grants and a softening of entry-level house prices launching locals onto the property ladder faster than a year ago.
Despite the city’s soaring property market recently pushing median house prices to record heights, new data from Domain’s First-Home Buyer Report, released on Monday, revealed it now takes the average couple four years and two months to save a 20 per cent house deposit – which is four months less than this time last year.
Brisbane was the only capital city to see savings time slashed over the 12-month period, with Sydneysiders forced to tack an extra six months onto their already painfully slow savings haul – which is now seven years and one month for the average couple.
Domain senior research analyst Nicola Powell said the data revealed just how sunny the market remains in the Queensland capital – with grants and wage growth easing the squeeze for first-home buyers alongside COVID, which had worked wonders for savvy savers.
“Brisbane bucks the trend really in terms of what we’re seeing across our other cities, and while it doesn’t have the quickest time to save, it’s seen more favourable conditions over the past year,” Dr Powell said.
“It was the only city to see a decline in time for houses while for units it remained stable … and what we’ve also seen is tax cuts and compounding interest on savings have helped speed up that time.
“I think over the past 12 months, we’ve all saved more, and for first-home buyers, it has supercharged their savings pot … the pandemic has also really unlocked an element of affordability. For those first-home buyers who can work from home, they are able to now seek different locations to reside, which opens the door to affordability.”
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
Infrastructure2 years ago
Watch: Route of Gold Coast’s new ‘M2’ motorway revealed [video]
Market Place3 years ago
Affordable acreage suburbs within 20km of the Brisbane CBD
Developments3 years ago
Brisbane and interstate investors drawn to up-and-coming King Street precinct