The latest monthly data on Queensland house prices has confirmed what buyers already know — prices are booming.
- This month marks the sharpest monthly increase in Brisbane house prices since 2007
- Experts say the rise is due to low mortgage rates and a shortage of housing stock
- Demographers say net interstate migration to Queensland is the highest it has been in 20 years
Figures released by property analysts CoreLogic showed prices grew in almost every region of Queensland in February.
Across Brisbane, prices rose by 1.5 per cent in one month, taking annual growth to 5 per cent.
The February increase is the steepest rise since November 2007, when the monthly growth rate was 1.72 per cent.
In Brisbane’s east, house prices went up by nearly 10 per cent in 12 months.
The Gold Coast and Sunshine Coast also posted strong price hikes, rising 2.6 per cent and 2.5 per cent in February, which pushed the 12 month gains up to 10.5 per cent and 11.2 per cent.
Townsville was the only region to record a drop with prices falling 0.6 per cent in February.
But the north Queensland city still posted a 12-month increase of 6.2 per cent.
CoreLogic’s Head of Residential Research Australia Eliza Owen said there were several key factors pushing prices up.
“The main drivers are record-low mortgage rates and relatively low levels of stock on the market and that’s something that’s driving an upswing across most areas of Australia,” she said.
“The Gold Coast and Sunshine Coast have been top destinations for internal migration for years now.
“In an environment where there’s no international migration, that internal movement is really benefiting markets relative to other parts of the country.”
Ms Owen said prices were expected to keep rising in 2021.
“In terms of prices steadying or falling across Queensland, I wouldn’t expect to see that until we get a significant uplift in the amount of stock on the market which is unlikely as people aren’t really moving as much at the moment,” she said.
“Or we see the cash rate increase, and as such mortgage rates would increase, and again that’s not something we would expect until the inflation target is between 2 and 3 per cent.
“[We would then] see the unemployment rate being really tight at around 4.5 per cent.”
The CoreLogic data also revealed the increase in house prices was widely spread across Australia.
‘We’ve missed the boat’
Emma and Grant Parkin were planning to move out of their townhouse and into a slightly larger home with their two young daughters.
The couple was one of 17 registered bidders for a house at Indooroopilly in Brisbane’s west that went to auction in late February.
It sold for more than $1.5 million — well above what they were expecting.
“We thought we were in with a chance and in about 20 seconds it was already above what we had planned to spend,” Ms Parkin said.
Mr Parkin said prices “have gone through the roof” since the threat of the coronavirus pandemic eased in Queensland.
“You’ve got people who can’t travel, so where are they going to spend their money?” he said.
“People can now work from home a lot more … so people are spending money on property and motor vehicles and consumables.”
Mr Parkin said the young family would now do some renovations to their townhouse and try to buy a larger home in a couple of years.
“I feel like we’ve missed the boat this time around and the concern is how high does it go?” he said.
“Property prices seldom if ever slow down and stop and decrease.
“If anything, the rate of increase just slows slightly and I think with the interstate influx and people working from home, it’s just gone through the roof.”
Not a bubble, says academic
Finance professor from the University of Queensland, Shaun Bond, said a strong up-tick in demand was affecting house prices.
“We’ve had a lot of people moving back to Australia from overseas, we’ve had almost half a million people by the latest count, we see record low interest rates,” he said.
“Plus, we see a lot of people rethinking their options, people choosing not to be in inner-city apartments, they’re choosing to think about lifestyle areas, they’re going for coastal areas, sometimes they’re looking at regional areas, even within a city like Brisbane they’re starting to think about larger suburban properties.”
Professor Bond said while price growth was strong, he would not classify it as a bubble.
“Yes, we’re seeing a strong up-tick in demand, but I feel like that can be explained by several of the factors we’ve discussed, plus the strong economic recovery we’re seeing in Australia as well — Australia has weathered the COVID crisis very well.
“The underlying economy is actually in a much better place than people thought it would be at this stage.”
Professor Bond said the rollout of the Coronavirus vaccine in Australia could affect the housing market.
“One of the things may be that it suddenly gives people more choices, so maybe some of those expats who returned from overseas may decide that they’re going to go back to the US, back to the UK to work or resume their careers there — people might start to travel again.”
Interstate migration at 20-year high
Australian Bureau of Statistics (ABS) demographer Andrew Howe said over the last year Queensland had a net inflow of about 25,000 people.
“Although [it’s] still not quite as high as the peak years for interstate migration to Queensland in the early 1990s.”
Provisional internal migration figures from the ABS showed Queensland had a net gain of 7,237 people in the September 2020 quarter.
The number of people arriving in Queensland from other states fell in comparison with the previous quarter.
But, crucially, fewer people left Queensland, with departures at their lowest level since December 1994.
In net terms, Queensland gained more than 4,000 people from New South Wales in the September quarter.
Last week, Premier Annastacia Palaszczuk told parliament more people were moving to Queensland’s regional areas rather than to Brisbane.
“This is contributing to the highest investment in new houses in Queensland since 1994,” she said.
Article Source: www.abc.net.au
Landlords use Gold Coast rental crisis to retaliate against tenants who deferred rent during COVID, agent says
Gold Coast landlords are retaliating against tenants by not renewing leases for people who stopped paying or reduced the amount of their rent during the COVID-19 pandemic, according to a real estate property manager.
- Oxenford has the lowest rental vacancy rate on the Gold Coast at 0.1 per cent
- REIQ says the rental vacancy rates on the Gold Coast have reached a 15-year low
- A local property agent says potential tenants are offering up to $100 per week above the rental price to secure property
Oxenford Ray White real estate co-principal Sally Hynes said many tenants are now paying the price as a city-wide rental shortage worsens.
“Now the owners have taken that onus back and are not renewed the lease because they did not do the correct thing during COVID according to the rules and regulations of the Residential Tenancy Authority.”
Ms Hynes said tenants could apply for a rental deferral if they could prove they were under financial pressure, and their landlord was in agreement.
But many tenants simply used the pandemic as an opportunity to stop paying the required rent.
The CEO of Tenants Queensland, Penny Carr, said some tenants renegotiated their rents with landlords while others did not, fearing retaliatory action.
“Some of those tenants had absolutely no choice but to pay a reduced rent and many of them are still battling accrued debts,” she said.
“Simply because they’ve followed the procedures that were available to them, those things that were set in place to protect people that were affected by COVID, they’re now having retaliatory action.”
Ms Carr said many tenants are facing large rent increases or being overlooked by landlords due to the competition in the rental market.
According to the latest Real Estate Institute of Queensland (REIQ) current vacancy report, 70.2 per cent of the state’s rental vacancies remain under 1.0 per cent.
On the Gold Coast, Oxenford’s vacancy rate is the lowest at 0.1 per cent.
Ms Hynes said they have one property on their books for rent and it was in the neighbouring suburb of Parkwood.
“The rental market in Oxenford at the moment is extremely, extremely busy.
“Not many properties are available and when they do become available they are gone within hours.”
Ms Hynes said the rental market had been busy for the past two months.
“It’s crazy, it’s just gone crazy,” she said.
“We don’t bother putting signs up anymore, it’s just not worth it.”
The property manager attributes the rental shortage to interstate migration, and Oxenford, like other suburbs in the northern Gold Coast corridor, is highly sought after because many homes are on larger blocks.
“I do say to them ‘have all of your paperwork ready’.”
Solid tenants impacted
Many tenants with sound rental histories are also becoming victims as property owners capitalise on the real estate boom.
“I have four very, very good tenants at the moment that the owners are selling their properties because of the market,” Ms Hynes said.
“I am trying to relocate them and I want to keep them, and I have no hope.
“People are getting very upset. We have people on the phone in tears.”
Ms Hynes said it was not unusual for a potential tenant offer up to $100 per week above the rental price to secure a property.
“It’s all very well to have the correct value for your property, as long as the owner is happy with that price then it is really about tenant selection.
“It’s not just all about the money.”
Homelessness group Everybody’s Home said the rental affordability crisis in Queensland is fuelling youth homelessness, and it is calling for more investment in social housing.
The campaign organisation wants the federal government to take action to make housing easier for young Australians to access.
Everybody’s Home said Gold Coast was leading the state with rents rising 20.6 per cent over the past 12 months.
Rents on the Sunshine Coast rose 15.3 per cent, while North Queensland’s increased 14.8 per cent in the same 12 months.
Brisbane’s rents increased 5.8 per cent in the same period.
Article Source: www.abc.net.au
Crisis looms in housing rentals as ‘stampede’ from south crushes vacancy rates
Rental supply has reached crisis point in large areas of Queensland, forcing the real estate industry to call for investor incentives in the upcoming state Budget.
The data from REIQ also shows that the drive to the outer suburbs and regions has created a severe shortage in places like the Gold Coast, Gympie, Rockhampton, Maryborough, Bundaberg, the Southern Downs and the Sunshine Coast.
But it has also forced people back into the CBD, which had been vacated during the worst of the pandemic and had been suffering from low occupancy of office space.
The shortage is understood to have increased rent prices but also meant “rent bidding” has been occurring. This relates to people offering to pay above the advertised price to secure a property.
The Real Estate Institute of Queensland’s Antonia Mercorella said Brisbane’s private rental market had been pushed into unchartered territory by a ‘’pandemic-driven stampede’’ of interstate migrants.
“With no support measures announced for the established housing sector in last year’s State Budget, the REIQ believes the Palaszczuk Government must take immediate action to resolve our current rental crisis,” Mercorella said.
“The State Government say they want to help households transition from community housing to housing in the private rental market.
“Given that, more needs to be done to better support both increased and ongoing property investor activity in the Queensland property market and the contributions they make to the State economy.”
The REIQ wants the First Home Buyers grant expanded to established housing.
While Queensland has a long history of attracting interstate migrants, it picked up during the lockdowns of last year.
ABS data shows that for the year to September 2020, regional Queensland welcomed a net of 14,101 people from interstate, outperforming the number of people arriving to Greater Brisbane of 13,014 over the same period.
The increase has created a real estate boom in many areas of the state with expectations that house prices could increase by as much as 17 per cent Australia-wide this year.
The REIQ said first quarter results for 2021 state rental vacancies showed almost 80 per cent of Queensland’s rental markets remained static or experienced tighter strains on the number of rentals available.
It found 70 per cent of the state’s rental vacancies remain under 1 per cent, with the biggest pinch recorded in Brisbane’s inner city, with rates dropping .5 per cent over the quarter.
“Record-low interest rates, government support and stimulus measures, and the pandemic-driven stampede we’ve witnessed migrating beyond our southern borders have sent Brisbane’s private rental market into uncharted territory, pushing vacancy rates down to their lowest levels since October 2012,” Mercorella said.
“In fact, our capital has seen rental markets across the entire metropolitan tighten quarter-on-quarter for the last four consecutive reporting periods, from Brisbane’s CBD out to the city’s outer rim.”
In the last 12 months, rental vacancies dropped 1.1 per cent across the Brisbane council area while Greater Brisbane saw the market tighten by 0.9 per cent.
She said Brisbane’s CBD achieved an “incredible’’ 4 per cent comeback in rental demand over the year.
The inner city (0-5km) experienced a 1.3 per cent increase and the mid-city region (5-20km) saw a 1 per cent rise.
Some of the tightest vacancies across the capital’s suburban spread include Anstead (0.5 per cent), Birkdale (0.3 per cent), Capalaba (0.2 per cent), Ferny Hills (0.3 per cent), Gumdale (0.4 per cent), Manly West (0.5 per cent), Rothwell (0.2 per cent), Sandgate (0.5 per cent), Shailer Park (0.4 per cent), Thornside (0.3 per cent) and Wakerley (0.4 per cent).
“Where we’re seeing the most pronounced rental demand levels far outstrip available vacancies is across regional Queensland, with the tightest vacancies currently to be found in the Fraser Coast’s Maryborough (0.2 per cent) followed by the Southern Downs (0.3 per cent) and Bundaberg regions (0.5 per cent), while a rate of 0.4 per cent has been recorded across Gympie, Rockhampton and Sunshine Coast,” Mercorella said.
“Meanwhile, the Gold Coast has tightened a further 0.3 per cent to reach a record low of 0.6 per cent in last 15 years of data records.”
While the popular Surfers Paradise precinct remains at 0.8 per cent over the quarter, other areas are unprecedentedly tight with the Gold Coast’s northern suburbs recording a median of 0.7 per cent. The southern suburbs has a median of 0.4 per cent.
The State Government has been approached for comment.
Article Source: inqld.com.au
Brisbane Housing Market Insights: April 2021
The Urban Developer’s Brisbane housing market insights for March reveals increased demand for houses has been underpinned by increasing consumer sentiment and a surge in interstate migration.
This resource, to be updated monthly, will collate and examine the economic levers pushing and pulling Brisbane’s housing market.
Combining market research, rolling indices and expert market opinion, this evolving hub will act as a pulse check for those wanting to take a closer look at the movements across the market.
Brisbane house prices have soared to record heights after a steady 12 months of growth and a rebound in listings and sales during recent months.
Brisbane’s housing market has remained particularly unaltered by the closure of international borders, where historically high demand from overseas migrants has been disrupted.
Brisbane advanced a further 2.4 per cent during March, pushing it up 4.8 per cent for the recent quarter and 6.8 per cent for the year to date.
The current median value for dwellings is $548,260, which is $12,642 higher than just a month ago.
The median house price of $607,969 continues to attract interstate migrants from the larger markets of Sydney, where the median is now $1.1m, and Melbourne at $859,097.
The premium end of the Brisbane’s housing market is still leading the acceleration in capital gains with upper-quartile property values rising by 3.1 per cent. Lower quartile property values were up 1.1 per cent throughout March.
Brisbane median house and unit price values
^Source: Corelogic Hedonic Home Value Index – March
CoreLogic’s weekly auction clearance rate across the combined capitals has been at or above 80 per cent just five times since 2008, and four of those were in March, 2021.
The week ending March 7, recorded Brisbane’s highest auction clearance rate on record—82.3 per cent—while also being the busiest week for auctions since late March, 2018.
Total listings across the country remain 26 per cent below the five-year average.
Brisbane auction clearance rates
|Week||Clearance rate||Total Auctions|
|Week ending 7 March 2021||82.3%||107|
|Week ending 14 March 2021||65.2%||110|
|Week ending 21 March 2021||73.0%||151|
|Week ending 28 March 2021||68.8%||191|
^Source: Corelogic Auction Clearance Rates – March
Gross rental yields in Brisbane remains favourable compared to Sydney and Melbourne at 4.3 per cent.
According to the SQM, Brisbane’s gross rental yield for houses is currently 4 per cent and 5.2 per cent for units.
Vacancy rates are where your jaw may drop, with Brisbane at just 1.5 per cent, and other locations below 1 per cent.
Traditionally Brisbane’s vacancy rates have been tight, hovering well below the level of 2.5 per cent, which represents a balanced rental market.
Brisbane residential rental vacancy rate
|City||March 2021 vacancy rate||Monthly % change|
Rental stock on market
|City||March 2021 vacancies||Vacancy net loss|
^Source: SQM Research – March
Brisbane rent prices
|Type||Rent||Monthly % change||Annual % change|
^Source: SQM Research – March
The seasonally adjusted estimate for total dwelling units approved in Queensland in February was 3,930, 40.5 per cent higher than recorded in January.
Loan data shows investors have started coming back into a housing market they had largely vacated and the boom is being driven overwhelmingly by established owner occupiers and first home buyers.
Queensland building approvals
^Australian Bureau of Statistics, (Suspension of trend series between May 2020 and Jul 2020 due to Covid-19)
|Dwelling||Approved||Monthly % change|
^Source: Australian Bureau of Statistics; Reference period February
Queensland home loan lending indicators
|Region||First home buyer loan commitments||First home buyer ratio – dwellings||First home buyer ratio – housing|
|Queensland||3078▲ ▼||39.6%▼||34.7% ▼|
^Source: Australian Bureau of Statistics – February
Queensland interstate migration
|Region||September (quarter) 2020 arrivals||September (quarter) 2020 departures||September 2020 quarter net|
^Source: Australian Bureau of Statistics – September quarter 2020
Brisbane’s housing market: policy updates
Australia’s central bank will maintain low interest rates to support the country’s ongoing economic recovery and surging housing market, buoyed by its busiest Easter auction market on record.
Strong tailwinds will bolster the Australian economy through the second half of the year, but macro-prudential measures are likely to be introduced to ease house price pressures in 2022.
Queensland faces a “hard road” during the next four years as the state recovers from the coronavirus pandemic, Treasurer Cameron Dick says.
Brisbane housing market forecasts
ANZ economists forecast Brisbane house prices will rise by 9.5 per cent next year, as low interest rates and government stimulus flow through the economy while Commonwealth Bank updated its forecasts, projecting a strong rebound in prices across the second half of 2021.
CBA now expects Brisbane house prices to increase by 16.6 per cent to December 2022 compared to 13.7 per cent in Sydney and 12.4 per cent in Melbourne.
Westpac has also updated its property forecasts, with Brisbane real estate prices tipped to surge 20 per cent between 2022 and 2023.
Article Source: theurbandeveloper.com
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