Brisbane’s property market did not have the greatest first three months of 2016.
So much so that one member of the real estate industry believes the end of the current growth cycle in the city and the wider south east Queensland region is already in sight.
Figures released this week by the Real Estate Institute of Queensland (REIQ) show the median house price in the Greater Brisbane area fell 4% over the March quarter to $480,000, while in the Brisbane Local Government Area, which encompasses the city’s inner suburbs, the median house price fell 2.4% to $620,000.
Speaking to Your Investment Property, REIQ chief executive officer Antonia Mercorella said the March quarter was a “slow” one for Brisbane, but she believes there isn’t too much cause for concern.
“Both of those markets, which had been performing consistently well slipped a little bit in the quarter. But that is only one quarter so we do need to be careful not to draw too much from that or sound the alarm bells at this stage,” Mercorella told Your Investment Property.
“Both the LGA and Greater Brisbane have been performing consistently well and if you look at the broader data they’re still tracking nicely,”
According to the REIQ’s figures, the Greater Brisbane median house price has grown 2.1% growth over 12 months to March and 7.8% over the past five years, while in the Brisbane LGA the median house price is up 6.1% over the 12 months to March and 17.9% over the past five years.
Mercorella said figures from the June quarter may too show a softening in Brisbane’s performance due to the impact of the ongoing Federal Election campaign; however she predicts the market will bounce back relatively quickly after the campaign is completed.
While Mercorella believes Brisbane still has plenty of fuel in the tank, Scott Northcott, director of Queensland based Real Property Advice, believes the peak of the current cycle is steadily drawing closer for the Queensland capital.
For Northcott, one of the factors that had breathed life into the south east corner of Queensland will also be its undoing as he predicts a post-Commonwealth Games slump.
“Brisbane will always follow Sydney and Melbourne and precede places like Adelaide, Perth and Darwin, that’s just the order things happen,” he told Your Investment Property.
“In our on the ground experience we have seen very strong price growth activity over the last 24 months and even a bit longer.
“I think we’ve got 18 more months for decent activity and I think after the Commonwealth Games at the end of 2018 we’re going to see quite an abrupt slowdown starting from the Gold Coast area. The Gold Coast will sort of infect upwards from there.”
The REIQ’s figures show over the March quarter that the median house price on the Gold Coast increased 0.5% to $557,500 and is 5.8% higher than 12 months ago and 10.2% higher than five years ago and Mercorella doesn’t believe the end of the Commonwealth Games activity will bring the Gold Coast and surrounding regions to a halt.
“I don’t think that’s going to be the case. Obviously there’s a lot of new construction going on there at the moment and other things because of the Commonwealth Games, but we were already sort of seeing the gold coast bounce back from the GFC anyway,” she said.
“I don’t think it’s going to be this situation that after the games we’re going to be left with this glut of stock and people are going to leave the Gold Coast.”
But Northcott’s outlook for the region is much grimmer, likening the current state of the Gold Coast to that of areas that went from boom to bust during the resource boom of recent years.
“People are chasing the Commonwealth Games boom.
“The big issue is that there’s a whole lot of stuff being built and sold and everybody thinks it’s all rosy, but when investors, both international and local, want to get out post Commonwealth Games they’ll simply dump their stock.
“Twelve to 18 months after the games there will be a bad taste in people’s mouths and then from mid-2020 to 2001 we’ll power on again.”
Original article published at www.yourinvestmentpropertymag.com.au by Phil McCarroll 17/6/16
Travel bans fuel Brisbane’s $30 million auction splurge
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.
“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.”
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”.
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.
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
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
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
Property confidence stages remarkable comeback
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
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