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Why are Brisbane property prices going up by so much during a pandemic?

Brisbane

A perfect storm of low stock, even lower interest rates, wage growth and a global pandemic have catapulted Brisbane’s typically slow-moving property market into the stratosphere, sparking a once-in-a-decade boom that experts say could fuel a further 10 per cent rise in house prices in the coming year.

While detached property prices rose in every capital city except Darwin and Perth over the January quarter, according to figures released by Domain, the almost magical mix swelling Brisbane’s usually stable market has been brewing for two years, says Brisbane-based market analyst and owner of Propertyology, Simon Pressley, with the red-hot industry showing no signs of slowing.

“So, it’s a case of rising tides lifting all ships – but not everyone is rowing in the same boat.

“We had a series of events for a couple of years before COVID that meant progressively there was less and less resale stock (here in Brisbane), and it was getting tighter and tighter. Then in the six months leading up to COVID, we had auction clearance rates through the roof, prices rising primarily because we had not enough supply for sale and not enough rental supply and then we had four interest rates cuts.

“And that was all before COVID.”

But while the stars were aligning for a Brisbane property boom well before the pandemic struck, Mr Pressley said the virus further fuelled the fire as Melbourne and Sydney bore the brunt of the nation’s coronavirus chaos.

“We saw in Melbourne they lost 10,000 people (to interstate migration) in six months, and that was before the lockdown,” Mr Pressley said.

“So, there’s no question in my mind that Brisbane will outperform Sydney and Melbourne for quite some years.

“What we are going to see throughout 2021 is an increase in properties listed for sale, but at the same time, buyers will regain more confidence. We’re calling it the biggest single property boom in 15 years Brisbane … and we could see double-digit price growth [over the next 12 months].

CEO of Brisbane’s Place Estate Agents, Damian Hackett, said the launch of major infrastructure projects within the state capital had further seasoned the property boom dish – making the city a particularly enticing destination for interstate migrants fleeing lockdowns and bad weather.

Brisbane

Infrastructure projects have helped underpin Brisbane’s growth, says Damian Hackett. Pictured: Howard Smith Wharves, now two years old.

“2020 was always going to be strong for Brisbane, but the increase in demand outside of Brisbane [off the back of the pandemic] has just accelerated it,” Mr Hackett said.

“I’ve looked back over my 30 years (in this industry), and I’ve spoken to a lot of people who have been in it for the same amount of time and for us the acceleration of the market and how fast it came out of nowhere makes it the most prolific market we’ve seen.

“The last boom in 2007 built up over time, and then the GFC happened but as far as the pace [goes] – particularly in January this year – the rule book has been rewritten.

“In January we saw the strongest numbers (for sales) we’ve seen (in a long time) … people really shot out of the gate, and just for contracts written, it was up 85 per cent on January last year.”

While Mr Hackett said the writing for a Brisbane-wide boom was on the wall, like many, he had worried COVID would stop the market in its tracks with early predictions the economy would take a devastating nosedive.

Instead, Australian Bureau of Statistics figures released in November last year revealed Queensland enjoyed one of the nation’s highest quarterly wage growths (of 0.6 per cent) amid reports of sky-high buyer activity.

Brisbane

Why not when the market’s hot: Brisbane’s most expensive one-bedroom unit is back on the market for $2.95 million. 4103/71 Eagle Street, Brisbane City, is located in Riparian Plaza. Photo: Place Estate Agents

The city has since undergone two consecutive quarters of house price growth, with suburb price records smashed every other week in a remarkable show of strength Mr Hackett said felt a world away from March last year, when they were desperately restructuring the business and preparing for the worst.

“Looking back at this time last year we were talking about how it was going to be Brisbane’s year because we hadn’t seen much growth with Brisbane being fairly steady – not like Sydney and Melbourne. Interest rates were low, and the government hadn’t put negative gearing in like everyone thought, and people were feeling really confident,” Mr Hackett said.

“Then came Sunday, March 22, and it was like, holy hell. Everyone went through predictions like ‘what if we don’t sell a house for six months’; it was really worst-case scenario plans that we had in place.

“Then at our auctions last month we had a 100 per cent hit rate — and that’s unheard of in Brisbane.

“It was always going to be Brisbane’s time (because of that perfect storm) but what’s surprised me the most out of the past few months is if you’re talking about where we sat 10 months ago and what the predictions said, is just how fast it changed and how dramatically it changed …  it’s the confidence people have had to jump into the market.”

CEO of Ray White Queensland Jason Andrew put that confidence in Brisbane’s market down to more than just affordability and a top lifestyle, but a rising need for somewhere safe to live in a time of heightened volatility.

“In a time of need, the safety of a home has emerged as something unbelievably important in our lives … so, while there’s no question that affordability of money plays a part in this [boom] there’s great energy right across Queensland, and a lot of people have looked at Queensland as a place of comfort and safety,” Mr Andrew said.

“When you look here, there is no market that isn’t experiencing some form of growth and we’re experiencing a shortage of inventory within the property market. Within the rental sector, you’re looking at a vacancy rate of less than 1 per cent.”

“And then there’s the interstate migration. I think all of that has driven that to where we are now.”

Mr Andrew said while Brisbane and Queensland, in general, had long been a popular destination for southern buyers, the city had never undergone lengthy market booms like its southern state capital counterparts.

He said what had stopped it before was a handful of missing ingredients such as infrastructure projects and wage growth, with the final addition of COVID-19 resulting in a boom that could change the city’s landscape.

“We’re seeing a real demographic shift here. Previously, in Queensland, it was more conservative, buyers would go up to retire, but it’s not that demographic anymore. Now you are seeing more and more 30-year-olds bidding at auction.

“[The pandemic] has highlighted what a wonderful piece of the world we have … and it’s exciting for Brisbane because our market was undervalued.

“I think it (COVID-19) has expeditiously moved us towards the path we were going towards.

“Now, numbers at open home are unheard of, and prices will continue to increase.”

 

Article Source: www.domain.com.au

Brisbane

April 2021: Four homes to secure in Queensland’s City of Logan from $230,000

The City of Logan is situated in a thriving growth corridor between Brisbane and the Gold Coast, with abundant amenities, good schools and a burgeoning health precinct

Queensland is in the midst of an exciting period of growth and Logan City is well-positioned in the centre of this change.

The City of Logan is situated in a thriving growth corridor between Brisbane and the Gold Coast, with abundant amenities, good schools and a burgeoning health precinct.

More and more home buyers are purchasing their first property in Logan thanks to its fresh and contemporary residential neighbourhoods, new estates and bushland acreage.

The adjacent Griffith University Logan campus, Queensland TAFE and the $145 million Logan Hospital expansion provides the opportunity for Meadowbrook to evolve into a major health and educational hub.

Given its central geographic location in south-east Queensland and available young workforce, Logan is ideally placed for continued growth in the region and provides great opportunity for families and investors.

Urban takes a look at four homes to secure in Logan City from just $230,000.

1. Brookhaven, Bahrs Scrub
Address: 33 Menora Road, Bahrs Scrub QLD 4207
Four-bedroom townhome from $475,000

City of Logan

Brookhaven 33 Menora Road, Bahrs Scrub QLD 4207 

Brookhaven is a new master planned community in Logan City, balancing safety, amenity and liveability amongst picturesque natural surrounds.

Situated just 4.3-kilometres from Beenleigh Town Centre, Brookhaven is connected to Brisbane and the Gold Coast.

Developed by Frasers Property Australia, the homes achieve a five-star green star communities rating and up to 5km of multi-use trails promoting walking, running and bike riding.

2. Aquila Lodge, Eagleby
Address: 10 Bishop Street, Eagleby QLD 4207
One-bedroom townhome from $230,000

City of Logan

Aquila Lodge 10 Bishop Street, Eagleby QLD 4207

Located near train stations, the Pacific Motorway and Logan Motorway, Aquila Lodge offers an 18-townhome development in the City of Logan’s Eagleby.

Each residence features one bedroom, one bathroom and a single-car lock-up garage.

The 42sqm homes include stone benchtops, stainless-steel appliances and air-conditioning to present comfortable living to its residents.

3. Clearwater Junction, Bethania
Address: Clearwater Street, Bethania QLD 4205
Three-bedroom townhomes from $335,000

City of Logan

Clearwater Junction Clearwater Street, Bethania QLD 4205 

Clearwater Junction is an established townhouse complex located in the hidden away suburb of Bethania.

Located in a cul-de-sac street, the peaceful residential development is bordered by farmland and situated within walking distance to the train station and shops.

Three and four-bedroom townhomes are available at the project, with a mixture of designs and layouts, including both single and double storeys.

Amenities include a well-appointed gym, in ground swimming pool, and picnic area.

4. Acacia Waters Estate, Eagleby
Address: Fryar Road, Eagleby QLD 4207
Two-bedroom apartments from $305,000

City of Logan

Acacia Waters Estate Fryar Road, Eagleby QLD 4207 

Surrounded by gardens, walking paths and numerous amenities, Acacia Waters Estate presents nine contemporary designed buildings in Eagleby.

Residents who secure a home in the development will benefit from 24-hour on-site management, undulating lawns and ample visitor parking.

Other amenities include a swimming pool and barbeque pergolas, as well as essential amenities in close proximity, including parks, public transport and shops.

 

Article Source: www.urban.com.au

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Brisbane

Bid to Open Up Student Accommodation to Workers

Student Accommodation

Scape Australia plans to open up its student accommodation to essential workers and interstate travellers as it waits for international students to return to the country.

The group applied for a temporary change of use for its Atria South Brisbane property until the end of February 2023, providing accommodation for non-students in the 88 Ernest Street building.

This will “allow the applicant to effectively manage the impact Covid-19 has had on their Brisbane assets [six buildings in total]” according to the application.

“Prior to Covid-19 [December 2019], building occupancy in Brisbane was at 75 per cent currently the assets have an occupancy rate of 28 per cent as Scape’s primary market is international students,” the report stated.

“The proposed ‘other change’ will allow Scape to use the vacancies in its buildings to offer the Brisbane housing market an alternative to typical renting models [share houses and the like].

“Scape are hoping to host like-minded occupants within the building who are not students.

“Examples include interstate travellers who do not want to sign a six- or 12-month lease elsewhere but need to remain in Brisbane for three-plus months or hospital workers who are assisting in the nearby Mater with the Covid-19 response.”

This is the second time Scape has tried to change the use of the building—that proposal was rejected by the council in August last year due to parking and transport issues.

Overseas arrival numbers remain at record lows, according to the Australian Bureau of Statistics, which recorded a 99.1 per cent drop in visitor arrivals in February compared to the same period last year.

Student Accommodation

▲ Scape have multiple properties in Brisbane and more than 18,000 beds across the globe in development or operation. 

To shape a recovery for the industry, federal education minister Alan Tudge announced a 10-year, whole-of-sector international education.

In 2019 there were 750,000 international students studying in Australia, accounting for a third of university enrolments.

“In 2019, we started the year with around 480,000 continuing international students, while another 150,000 entered Australia to study in the first half of the year, and a further 130,000 in the second half,” Tudge said.

“Closing the borders, of course, had a significant disruption on the international student sector.

“That normal pattern was not possible last year. While some started online, many also deferred their studies, preferring to wait until travel is again possible.”

Despite a lack of international students in 2020, Scape continued to expand its Australian portfolio, purchasing 252 serviced apartments in the Aurora Melbourne Central building for $125 million in November.

The group also lodged plans for four student towers on each corner of an intersection in Kensington and Kingsford near the University of New South Wales.

 

Article Source: theurbandeveloper.com

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Brisbane

The cost of renting in Brisbane reaches record levels, outstrips Melbourne prices

For the first time in years, it now costs more to rent a home in Brisbane than Melbourne, with mass migration and a near two-decade low vacancy rate shooting median asking prices to record heights.

Amid tales of tenant bidding wars and rejected applicants reduced to tears, the latest Domain Rent Report, released Thursday, revealed the average weekly asking price for a house in the Queensland capital soared by almost 8 per cent to an unprecedented $440 per week over the past 12 months – and by 3.5 per cent over the past quarter alone.

The price hike means the average Brisbane tenant is now paying $10 more a week than their Melbourne counterpart for a house, and $25 more a week for a unit after prices for the latter rose by a slightly more modest 3.9 per cent over the year to a record-breaking $400 per week.

Domain senior research analyst Nicola Powell said the report marked a sharp turnaround for the city, with houses, in particular, marking the steepest annual increase in rent prices since 2008 following three strong consecutive quarters of rent gains.

“Melbourne house rents have been higher than Brisbane’s since about 2016 so what we’ve really seen in Brisbane since mid-2020 is an acceleration in asking rents and this really goes against what was happening in the lead up [to the pandemic],” Dr Powell said.

“They had relatively flatlined since 2013.”

Dr Powell said while Queensland had always been a hot destination for interstate migrants, the pandemic and the possibility of remote working had fuelled the trend with the annual number of Australians moving to the state hitting its highest level since 2006.

“Tenants will find less choice, with the pool of available rentals shrinking by one-third compared to last year, pushing Brisbane’s vacancy rate to a multi-year low,” she said.

“House and unit rents held steady or increased in all regions across Greater Brisbane over the March quarter, apart from unit rents in Ipswich sliding a mere $5 a week. Annually, the biggest jump in asking rent was recorded for houses in Brisbane’s north and Moreton Bay North, the steepest annual increase since 2008, up 6.8 per cent and 6.7 per cent annually.”

While rent prices indeed soared across most parts of the city it was the capital’s family-friendly pockets in the middle and even outer rings that shone brightest, with houses in Bald Hills and Everton Park enjoying the biggest annual price rise after surging 10.6 per cent to $520 per week.

Hot on their heels were Kenmore, Brookfield and Moggill, where median asking prices for houses shot up by 8.2 per cent over the same period to an unprecedented $595 per week – a rental price equal only to houses in the inner-city west region.

It’s a rare rental boom that Aurora Realty Brisbane leasing manager Abi Harrington said was reaching eye-watering levels – with their agency currently managing 100,000 tenants actively seeking a home.

“We’ve gone from houses taking three weeks to rent out, to three days and even down to three hours [in the past quarter],” Ms Harrington said.

“You wouldn’t believe the gifts I have received (from desperate tenants) from gin, to flowers to cheesecake and even a bottle of champagne.

“We used to have the policy that a tenant mustn’t apply before they’ve seen the property but now we say apply first if you like the photos … and if you get approved we’ll arrange a private inspection after [because rentals are being snapped up so quickly].”

As for the soaring rents in Everton Park and Bald Hills, Ms Harrington put the increase down to tenants being simply priced out of Brisbane’s more expensive inner pockets, with houses in quiet suburbs boasting a good school catchment the number one lure.

“I’ve just listed a property in Everton Park … and in less than 24 hours I have five inspections booked in … but sometimes we get up to 15 people in the first few hours,” she said.

“This is the height of it and it’s absolute chaos. On average tenants are offering $20 to $30 dollars over the asking price but some people are surpassing that. People from Sydney and Melbourne are cashed up and headed this way because buying a house is far cheaper here and Queensland is the obvious choice as the office doesn’t exist anymore.”

Ms Harrington said soaring interstate migration was a major contributor to rising rent prices, with some southern home hunters willing to fork out $90 per week more in a move that was causing much anxiety among Brisbane residents.

cost of renting in Brisbane

Properties for rent in suburbs like Chapel Hill and Kenmore are sparking bidding wars.

“Locals feel like they’re being pushed out … and I see this getting worse. And it’s not fair on locals living here struggling to meet that price range … and we don’t encourage [bidding wars] because we’re trying to manage expectations,” she said.

Ray White Metro West property manager Stephanie Budrodeen said with rental wars now a common occurrence in hot spots such as Chapel Hill and Kenmore, median prices, in reality, had soared beyond eight per cent to as high as 30, creating a scene more akin to an auction, with the charge being led by Melbourne families particularly desperate to bag a house in a top school catchment.

She said the pandemonium was further fuelled by the “nuts” sales market with some tenants pushed out by owners desperate to sell in a booming market, while others were forced to rent purely because there was nothing to buy.

“Two weeks ago, we just had one property [a two-bedroom unit] left on our rental roll … and that’s never happened before. But the downfall to all of this is owners think their properties are worth more than they are and this is going to make problems for the future when prices are no longer inflated,” Ms Budrodeen said.

“Tenants are in panic mode right now … and in my opinion this a ripple effect from the housing market.”

 

Article Source: www.domain.com.au

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