I’m always being asked for an opinion on where I think the local market is headed. I keep a close eye on current research, statistics and what respected industry analysts have to say and I’d have to say that the future looks exciting. It’s clear that there has been a consistent undersupply of houses for sale in Brisbane’s inner and middle ring suburbs. Anyone who has been in the market to buy a house within ten kilometres of the CBD would testify to the level of competition to buy. As result there has been upward pressure on selling prices. CoreLogic RP Data has reported growth of 5 – 7% in most of these areas over the past year with more rapid growth to come.
Units, on the other hand, have been the poor performer due to a number of factors but most significantly, a large supply of new units that have come to market or about to hit the market are in some of the same areas. This has also helped create an oversupply of units to rent, affecting interest from investors. Inevitably, markets are about supply and demand and in the case of units, this is what’s happened. Unit prices have generally seen negative growth of 5 – 8% over the past year. There is a silver lining here and cause for real optimism moving forward. Domain Property Group recently published that new multi storey unit development applications in Brisbane have plummeted by 63% which may result in stock shortages within less than two years. Given the growing disparity between the price of a house and a unit, we are likely to see a significant lift in values for units in the medium term.
John McGrath recently gave his overview of the Brisbane, Sydney and Melbourne markets. To use his words, He’s “supremely confident” about the Brisbane and south east Queensland market. Mr McGrath used Brisbane and Sydney suburbs Paddington as a comparison to where the different capital city markets were. “They are quite comparable, the style and equidistance from the city, a similar demographic and so forth,” he said. “There was a time where you would get a bit of change if you sold in Paddington, Sydney and came here, but not a lot. Right now it is double, maybe more to buy a comparative property.
The market here is not expensive; I think the market here is value for money. Brisbane is obviously showing some signs of improvement, and southeast Queensland in general.” Mr McGrath said a rise in telecommuting would also benefit Southeast Queensland property markets, particularly the Gold Coast and Sunshine Coast, as more people sought to buy in lifestyle areas. “Right now we are selling one-bedroom units in Sydney for $850,000 to $900,000, you can go down to the beautiful Gold Coast and buy a house on the water on the canals there for that sort of money.”
He believed the property market would start to rebalance at some point, although wasn’t predicting great drops in Sydney or Melbourne values. “I see Sydney and Melbourne as close to their peak, I think Southeast Queensland has significant growth happening, not in the next 12 months, but over the next few years, which will really bridge that value gap.”
According to the latest CoreLogic home value index the median house price in Brisbane ($530,000) was almost half that of Sydney ($1.05 million).
It’s clear to me that all the signs are that the Brisbane and south east Queensland market is set for an exciting period of strong growth. Both home buyers and investors should approach the current market with a sense of confidence.
Information sources: Kerry Parkes- RE/MAX Colonial, Annerley, Domain Property Group, CoreLogic RP Data & John McGrath.Share