HOUSING in Queensland is more affordable than it was a decade ago, with many areas now cheaper to buy a property in than to rent one.
A new report by ANZ and CoreLogic reveals household incomes have risen at a faster rate than home values in the Queensland capital – particularly in the last quarter of 2018.
It means the housing market is more affordable for those buying or saving for a deposit.
Greater Brisbane suburbs like Beenleigh, Caboolture, Springwood and Ipswich are now more expensive to rent in than to pay off a mortgage.
In regional Queensland, housing affordability is even greater, with most areas from the Darling Downs to Cairns much cheaper to buy in than rent.
Over the past decade, median dwelling values across the state’s regions have lifted by just 4.4 per cent, while household incomes have increased by a much greater 28.9 per cent.
It is now significantly cheaper to buy a home than rent one in Biloela, with the report estimating it would take only 2.5 years to save a 20 per cent deposit.
“Anywhere around the mining areas have seen steep value declines and that has impacted affordability,” ANZ managing director of consumer banking Kate Gibson said.
“It doesn’t mean it’s a great idea to go rushing in, but we’re starting to see locals who had been priced out (of the market) now in a position to get back in.”
The average household income in Brisbane has jumped more than 31 per cent in the past 10 years, while median home values have increased by 25.8 per cent.
It takes eight years for an average household to save a 20 per cent home deposit, based on a median home value of $493,568 and saving 15 per cent of their income.
But it can take significantly less, or more time, depending on which suburb you are looking to buy a property in.
In Ipswich and Jimboomba, it takes about six years to save for a deposit, while in Bribie Island and Sunnybank, it is likely to take more than a decade to come up with enough money to buy a home.
Ms Gibson said the older, more established suburbs were usually the hardest to buy into in most capital cities, but the report showed areas by the water were the most sought-after.
“If it’s a nice area to retire to or a nice place to have a beach house, we’ve found housing values have been driven more by people buying from outside the area than local residents,” she said.
In Noosa, the report estimates it could take 13 years to save for a 20 per cent deposit for a home, while in Burleigh Heads and Southport, would-be buyers are looking at needing to save for at least 10 years.
Ms Gibson said the report was designed to help potential buyers find opportunities to get into the market at a price point they could afford.
Homeowner and mother-of-two Rachael Tickner said she and her husband, Brent, had considered upgrading to another home, but would need to save for a few more years to get into the suburb they would like to live in.
They currently own a four-bedroom house in Nudgee.
“In my heart I definitely want to live somewhere else … it would be lovely to be more inner city,” Mrs Tickner said.
“I’d love to live in Ascot, but we’re looking at a good 10 years of saving and going without before we can afford that!”
But she said they would be more open to buying an investment property in a less desirable suburb.
“We’d be open to researching the areas that do have a lot of growth and good return and wouldn’t rule out any suburbs,” she said.
It comes in the wake of the first cut to interest rates in almost three years, with the Reserve Bank of Australia slashing the official cash rate to 1.25 per cent this week.
WHERE IT’S CHEAPER TO BUY THAN RENT
Suburb % of income needed to service mortgage % of income needed to rent
Beenleigh 29.9% 31%
Biloela 10.3% 19.1%
Bowen Basin – North 11.2% 19.4%
Browns Plains 26.3% 26.3%
Bundaberg 27.6% 30.8%
Burnett 21.2% 28.8%
Caboolture Hinterland 31.4% 31.5%
Cairns – North 27.4% 28.5%
Cairns – South 26% 30.2%
Central Highlands 12.9% 18.9%
Charters Towers 17.2% 23.6%
Darling Downs – East 18.5% 22.5%
Darling Downs – West 13.6% 20%
Far North 25.2% 29.7%
Gladstone 17.9% 18%
Granite Belt 24.5% 26.8%
Innisfail 19.8% 27.7%
Ipswich Hinterland 26.5% 27.8%
Mackay 23.9% 28.5%
Maryborough 28.1% 33.2%
Outback – North 11.6% 19.7%
Outback – South 8.2% 18.6%
Port Douglas 25% 27.6%
Rockhampton 21.8% 25.4%
Surfers Paradise 34.1% 40%
Springwood-Kingston 25% 28.1%
Tablelands (East) 28.9% 32.6%
Townsville 21% 24%
Whitsunday 29.6% 31.2%
YEARS NEEDED TO SAVE A DEPOSIT
Suburb Years to save a 20% deposit
Bribie Island 10.8
Brisbane inner 7.3
Browns Plains 6.5
Ipswich inner 6.1
Are these Australia’s cheapest blocks of land?
Just when we thought we had found the cheapest – a patch of dirt for $4.94 a square metre near the Queensland and NT border – we found another one.
And this “dirt cheap” vacant block is on the market for $2.08 a square metre – less than a 2L bottle of milk!
The fully fenced rural block of land has town water available and “power close by” but is only suitable for horses or recreation, hence the price.
It is listed with LJ Hooker Gayndah.
In Camooweal, yes that one near the border, a “drovers dream” is listed at 54 Cronin Street for $10,000.
With 2024sq m of vacant land that works out to be $4.94 a square metre — less than a beer at the local pub or a foot-long sub on discount day.
To help you wrap your head around that, that block of land would cost you over $1 million in Ipswich.
A recent report by property services group Oliver Hume found that Ipswich had the best value dirt in southeast Queensland, with land averaging $507 a square metre.
That is nearly half the price of vacant land in Brisbane, where buyers can expect to pay an average of $970 a square metre, so that block of land in Camooweal would set you back almost $2 million in the big smoke.
Bronwyn Finch of Jays Real Estate Mount Isa is marketing the Camooweal vacant block, which is located off the Barkly Highway.
Camooweal had a population of 208 at the time of the 2016 Census, with the average resident aged 36.
“It is walking distance to the local shop and garage, and you can wave at the tourists as they go past,” Ms Finch said.
“I sold another block about a year back, same deal for about $8000.”
Ms Finch said the cheap blocks were usually purchased by retirees looking for a spot to park their van between trips.
She noted it would be a tough ask to get a car park in Brisbane for the same price.
“It is quite close to the Gregory River, which is beautiful, and Adels Grove, our premiere tourist attraction out here, is about an hour away.
“That’s close for us. That’s a daily commute in the city.”
Meanwhile in Mungallala, a tiny outpost on the Warrego Highway west of Mitchell, is a 1012sq m vacant lot of land that is on the market for $6000, or the nearest offer.
That’s $5.92 a square metre – less than a cup of coffee in Ascot.
It is listed with Ray White Charleville agent Glenda Fill.
“There has been a new house built in the town in the last two years,” she said.
“It is very small town off the Warrego Highway and had a population of 136 in 2016.
“It is an hour and a quarter from here (Charleville) so it’s a bit closer to the coast than we are.”
And in Westwood, which is about half an hour from Rockhampton, the beef capital of Queensland, is an 1800sq m block for $9000.
There is also another 1174sq m lot for $8000, and the 962sq m lot, which was listed for $6000, has sold.
“Blocks are not serviced and would suit ‘off grid’ living,” the listing says.
“There is no town water in Westwood – households rely on tank or underground (bore) water.
“No town sewerage (septic or bio), Westwood has electricity – no current supply to this estate.”
Marketing agent John Neumann of Discover Real Estate said “it’s a bargain” with a “rural outlook”.
“There is a rail line nearby, a mining one,” he said. “I think there is a pub, a post office and a police officer there.
“It is only about 50km from Rockhamption and it is on the western highway to the mining belt.”
Mr Neumann said he had already had some interest in the lots, mostly from grey nomads looking for a base and people keen to “go off-grid”.
He said he had even had inquiries from uni students looking to get a leg – or toe – on the property ladder.
Westwood had a population of 174 during the 2016 census.
It was the first new town proclaimed in the Queensland Government Gazette, after the state became a separate colony back in 1859.
‘The margin will never be this close again’: Brisbane’s waterfront secret where property is still affordable
Think “Brisbane waterfront” and Moreton Bay darlings Wynnum and Manly quickly spring to mind.
But only 30 kilometres northeast, on the other side of the airport and a similar distance to the CBD, another bay-front suburb, Sandgate, appears.
The photogenic village topped Domain’s best performing Brisbane suburb list in 2018 with 18.8 per cent median house price growth.
Despite this overall rise in housing value, data-savvy local agent Jacqui McKeering makes the case that Sandgate’s waterfront properties are still undervalued compared to southside bay designer homes.
Ms McKeering, of Jim McKeering Real Estate, says Sandgate waterfront still remains great value because family groups have to buy further back to get more features.
“When the price-to-rateable-land-value gap narrows, you are getting a bit of a bargain,” she says.
“A simple calculation to illustrate this point shows the market value of Sandgate waterfront properties not that much greater than the rateable land value; on average 32 per cent greater.
“In fact one waterfront property sale, back in 2017, sold for 15 per cent less than the rateable land value, yet one block back and without bay view properties have a greater gap of 42 per cent.
“One particular [non-waterfront] property sold as high as 66 per cent greater than the rateable land value.
“The outtake here is there is plenty of money to be made on Sandgate waterfront properties.
“I do believe the margin between waterfront properties and the neighbouring streets will never be this close again.”
Flinders Parade, which runs along the foreshore of Sandgate and into Brighton, plus Eagle Crescent and Shorncliffe Parade, are the waterfront property strips in focus.
Ms McKeering says a lot of people have been buying these older houses and renovating and that at the moment there is some choice in “real cheapies” from about $900,000 to about $1.35 million.
“I know someone who bought for $1.4 million in 2017 with a $1.8 million renovation budget,” she says.
“When you see that sort of money coming into an area, it tells me people are seeing long-term capital value in this area.”
Fellow Sandgate agent Tamara Wecker of RE/MAX agrees suburb 4017’s waterfront properties are priced and selling considerably under their comparable Brisbane market values.
“When compared to Wynnum and Manly,” Ms Wecker says, “absolutely; I mean you can live in the Taj Mahal in Sandgate for about $1.5 million.”
She is seeing buyer migration from Sydney and “a little bit from Perth” because of affordability, and thinks Sandgate’s strict rules, which prohibit multi-unit developments on its waterfront, is a further drawcard.
“People tend to think of Wynnum and Manly but here you can have a premium home and lifestyle only 30 minutes from the city,” Ms Wecker says.
“To be honest, it has been a bit of a secret because we are off the highway so you have to have a reason to come here, but that is changing in the past 18 months.
“We are getting more inquiries from people, even from Brisbane, who just did not know about us.”
Mark Crew has been selling Sandgate housing since 1990 and thinks people have woken up to how great a suburb it is in the past 18 months.
The Professionals’ agent has reported strong interest from Sydney buyers “looking for a better family lifestyle”.
He estimates 25 to 30 per cent of Sandgate buyers this year have come from the neighbouring suburbs of Shorncliffe, Deagon and Brighton; people who want to upgrade but stay in “the village”.
“It is 31 minutes to the CBD and you can be walking on the waterfront with your kids after work and we’ve got excellent schools too,” Mr Crew says.
Regarding Sandgate’s waterfront property market and its value, he says three factors should be considered.
“There are few waterfront properties for sale, land is scarce and over the past 20 years there has been a lot of change to the houses themselves, a lot of renovation and/or raising older three-bedroom cottages and transforming them into often substantial five-bedroom luxury houses,” he says.
“So these houses on their waterfront blocks are, quite rightly, going to fetch more in sale prices when they do one day return to the market; and that is showing.”
Cheap Units In Brisbane Suburbs
Twelve suburbs in Brisbane have a median unit price of just under $400,000, according to Domain’s June House Price Report.
Ten out of these 12 suburbs are in the inner city, the report said.
Bowen Hills, Fortitude Valley, Albion, and Spring Hills are all within three kilometres of the Brisbane CBD. The median unit prices in these suburbs are below $400,000, the figures showed.
East Brisbane, Coorparoo, Clayfield, Nundah, Taringa, and Kedron also offer some of Brisbane’s cheapest unit values, according to the report.
Bowen Hills is the cheapest suburb to buy a unit, with prices falling 13.7% in the past 12 months, the figures showed.
Here are Brisbane’s cheapest suburbs to buy units by median price, according to Domain:
|Suburb||Median price||YoY % growth||5-year % growth|
In Greater Brisbane, the median unit price fell 8.6% over the year to June, according to the report.
The capital city’s unit prices are “sitting at 2013 levels”—down from their peak in 2015, according to Domain research analyst Eliza Owen.
However, prices are expected to bottom out this year, with the end of the downturn in the unit segment in sight, Owen said.
“Unit listings are also moderating, which should reduce downward pressure on prices,” she said.
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