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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

Two green bridges underway, Brisbane City Council seeks feedback on two more

Construction on two green bridges linking Brisbane’s inner-city suburbs is slated to begin this year, but the location of three other planned bridges remains unclear.

In 2019, Lord Mayor Adrian Schrinner made a $550 million pledge to build five new green bridges, catering for pedestrians and cyclists, to reduce vehicle traffic and improve the city’s connectivity.

At Tuesday’s public and active transport committee meeting, Brisbane City councillors were given an update on the progress of the green bridges program.

Public and active transport committee chairman Ryan Murphy told the committee the council wanted state or federal funding support alongside the $550 million already committed.

The $190 million Kangaroo Point green bridge will be 470 metres long and 6.8 metres wide, with separated cycling and pedestrian lanes, linking the inner-city suburb with the City Botanic Gardens.

Construction on the Kangaroo Point and Breakfast Creek bridges will begin this year, with the council now out to tender for both.

Consultation for two West End bridges

Community consultation on the bridges from West End to St Lucia and West End to Toowong was extended following concerns the December-January consultation was too short.

For the West End bridges, suggested locations put forward by Brisbane City Council would either place the landing pads on public parks, such as Orleigh Park in West End and Guyatt Park in St Lucia, or on private property.

Two green bridges

A concept image for the St Lucia to West End green bridge(Supplied: Brisbane City Council)

Greens councillor Jonathan Sri, in whose ward both West End bridges would sit, said it appeared the third option for the St Lucia bridge — between Keith Street in St Lucia and Boundary Street in West End — was most supported.

“I’ve heard from several residents who’ve said they think the Option C location for the St Lucia bridge is preferable from a transport perspective, but they have concerns about the scale and design of the exact alignment proposed by council, and the associated home resumptions,” Cr Sri said.

“The vast majority of residents seem to prefer alignment Option A for the Toowong Bridge, and it seems like the Toowong bridge in general has a lot more support.”

Two green bridges

A concept image for the Toowong to West End landing pad for a green bridge(Supplied: Brisbane City Council)

Option A for the Toowong bridge would see the bridge land at 600 Coronation Drive — the former ABC Towoong site now owned by developers Sunland, but put up for sale late last year.

Last year, Cr Schrinner ruled out purchasing the 600 Coronation Drive site saying the cost would be prohibitive, but said the council would consider resuming a portion of the land for a green bridge if needed.

LNP councillor James Mackay, in whose ward of Walter-Taylor the two bridges would land, recently spoke at a rally for a group opposed to a possible Guyatt Park alignment for the St Lucia to West End Bridge.

Cr Mackay referred queries about his community’s opinions to the lord mayor’s office.

Fifth green bridge site unknown

In mid-2020 a fifth proposed bridge, from Belbowrie to Wacol, was scrapped after several rounds of community consultation found little support.

The council is preparing options for a fifth bridge location, the committee heard.

Two green bridges

A concept image of the Breakfast Creek green bridge linking Kingsford Smith Drive and Newstead House(Supplied: Brisbane City Council)

Deputy Labor leader Kara Cook in a statement said she had lodged a petition with more than a thousand signatures calling for a bridge on the eastern side of the river.

Cr Cook said a bridge in her area — around Bulimba and Hawthorne connecting across to New Farm or Teneriffe — had been mooted since at least 1925.

Technical challenges are greater for the eastern section of the river as any new bridge must be of a height to allow ships through and would span a wider section of water.

 

Article Source: www.abc.net.au

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Brisbane

Commercial Market Update – Brisbane Fringe Cityscope February 2021

The latest research from Brisbane Fringe Cityscope shows in the last three months property sale numbers have increased but sales figures have had a slight increase. The last three months to the beginning of February 2021 recorded 22 sales for a total of $114.2 million, with $23.7 million for commercial, $4.4 million for commercial strata, $4.2 million for retail, $4.3 million for retail strata and $77.5 million for other.

In comparison, the last three months to the beginning of November 2020 recorded 14 sales for a total of $98.9 million, with $86.2 million for commercial, $1.5 million for commercial strata, $800,000 for retail strata and $10.5 million for other.

The 12 months leading up to early February 2021 recorded 60 sales for a total of $323.5 million, more than $212.6 million less than the same time last year.

The table below shows sales recorded for the past eight updates of Brisbane Fringe Cityscope:

Commercial Market

Brisbane Fringe Sales Grid

Significant sales recorded this quarter total nearly $80 million, these sales include:

After a failed sale to iProsperity, interests associated with Amora Hotels & Resorts have purchased the 296-room Novotel Brisbane Hotel for just over $67.8 million; the hotel will be rebranded following Novotel’s lease expiring in late April this year. JLL Hotels & Hospitality Group negotiated the sale. The hotel last traded for $63.5 million in 2010.

A three-storey child care centre at 20-22 Marie Street, Milton has been sold for $8.435 million; it was purchased through The Trust Company (Australia) Limited. The property, formerly an office building, was extended and refurbished in 2018 for use by the a 120-space child care centre. It previously traded for $6.15 million in 2017.

Developer, builder and property managers, Pellicano, have purchased 68 Brunswick Street, Fortitude Valley for $8 million from Metro Property Group. The property was originally going to house stage 4 of the adjoining Central Village development. The 5,374 sqm site was sold through JLL Brisbane and has Council approval to demolish the existing buildings on site.

Commercial Market

Brisbane Fringe Sales Chart

Properties for sale include:

  • Lanmor House, 124 Brunswick Street and 52 Amelia Street – a two-storey office building and a two-storey warehouse/office building, with a combined area of 960 sqm and associated car parking. For sale by expressions of interest, closing February 24, 2021; agent, Colliers International (Hunter Higgins and Nick Wedge).
  • 29 Amelia Street, Fortitude Valley – two-strata units (the whole building) with a combined 828 sqm of office space over two levels, plus ground floor car parking for 20 vehicles. For sale by expressions of interest, closing February 18, 2021; agent, C Property Qld (Sam Callanan and Joe Kennedy).
  • 196 Wickham Street, Fortitude Valley – a two-storey retail/entertainment building with lower ground level to the rear. For sale by offers to purchase; agent, Commercial Brisbane (Glenn Corrigan and Tom Chan).

Properties under contract (conditional or unconditional) include:

  • 38 Warry Street and adjoining car parking at 41 Kennigo Street – 2,955 sqm of office space (the former Keatings Bread Factory site) and an adjoining carparking for 20 vehicles. Under contract; agent, Cushman & Wakefield Brisbane (Peter Court and Mike Walsh) and CBRE Brisbane (Jack Morrison and Peter Chapple).
  • 72 Costin Street, Fortitude Valley – a single-storey plus mezzanine, brick office building with car parking for 15 vehicles. Net lettable area, 507 sqm. Under contract unconditionally with a long, one-year settlement period expected; agent, Colliers International Brisbane (Hunter Higgins and Nick Wedge). The property was advertised with a potential leaseback agreement from 9-months to three-years.

 

Article Source: www.corelogic.com.au

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Brisbane

Brisbane, Gold Coast, Perth outstrip Sydney and Melbourne prestige property markets

prestige property markets

The hunt for a house that’s not just a home, but a COVID-free castle, has pushed up prestige property prices in Perth, the Gold Coast and Brisbane, with a new report revealing the three cities outstripped the nation’s two biggest capitals during 2020.

The Knight Frank Wealth Report 2021, released today, also revealed the trio made a global splash in the Prime International Residential Index (PIRI 100), which tracks the movement of luxury home prices across the world’s 100 best residential markets.

Off the back of surging buyer demand, low interest rates and a greater emphasis on lifestyle, the three cities, with Perth in the lead, were ranked in the top 44 of prestige markets, after they each clocked up annual price growth of more than 2.5 per cent.

Sydney was ranked 56 – after prestige home prices grew just 1.1% – while Melbourne came in at 63 after prices rose 0.9 per cent.

A roaring resources sector and a push towards relaxed lifestyle locations saw Perth not just top the national list and rank 34th globally, but dramatically leap from last place among Australian capital cities in 2019 after prestige property prices soared by 3.6 per cent last year.

Luxury home prices in the Western Australian capital had remained almost stagnant the year before, rising by just 0.9 per cent.

The Gold Coast achieved a global ranking of 36 after prices grew by 3.2 per cent – compared to 1.8 per cent growth the year before.

 

Article Source: www.domain.com.au

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