By Steven Webster, Image Property
Despite the ongoing threat of the pandemic, Brisbane’s property market continues to see record-breaking demand from buyers. Winter was sensational, and Spring & Summer promise to be just as good. So what are the key influences that I am seeing in the local market?
Record Buyer Numbers
It’s easy to assume the property boom is partly due to a severe lack of new listings becoming available. However, when looking at the bigger picture, it’s a little more interesting.
The number of new listings is 13% higher than this time last year, the significant difference being the buyer pool has expanded to record levels.
REA recorded a 61% YOY increase in buyer inquiry across August, which resulted in weekly sales activity reaching record levels. Some 55% higher YOY compared to 2020 and 75% compared to 2019. What does all this mean if you are a buyer or seller? In short, properties are here today, gone tomorrow!
Investment Buyers are back!
On the front line, I am seeing a massive increase in inquiries from interstate investors. Both Corelogic and REA have recently released articles supporting this, showing that national questions from investors are at the highest level since 2015.
North Brisbane investor inquiries had increased more than 400% YOY, while South Brisbane and Brisbane’s inner-city saw significant annual growth upwards of 200%.
This uptick in investor activity has seen the value of new loans to investors more than double since the pandemic began. With vacancy rates at historic lows, the Brisbane market will continue to represent an attractive market for investors moving forward.
With Melbourne and Sydney in and out of extended lock-down periods, it is little wonder why residents are leaving their droves. Queensland’s enviable lifestyle has seen it gain over 30,000 new residents from other Australian states over the past year.
Amongst them, 47% resettled in Brisbane. Overall, this is the most significant annual net population gain from internal migration in 16 years!
The Fear of Missing Out
One of the other key drivers of price in a hot market like this is the fear of missing out. This happens when home buyers and investors get caught up in the market’s momentum and fear that if they do not act now, the opportunity might not present itself again.
The tell-tale sign is secondary properties selling well above their vendor’s expectations. This presents an excellent opportunity for property owners on main roads, structurally unsound properties and apartment developments that will seriously diminish your views. Unfortunately, some of the critical thing’s buyers will overlook in such a market are:
- Compromising on Location – desperate to get into a particular suburb, more buyers are now buying close to main roads, train lines, flood-prone areas & apartments looking into construction sites.
- Overspending – Intense buyer competition is seeing more buyers take financial risks by exceeding budget and even using cash reserves that are allocated to moving expenses.
- Avoiding Due Diligence – We are now seeing more contracts on terms favourable to the seller. Some buyers are waiving cooling-off periods or not conducting essential building and pest inspections or strata searches to beat the competition.
- Ignoring Repairs and Defects – Other buyers are seeing the structural issues on reports and still offering a premium price to get a foot in the door.
Where does this leave property prices in 2021?
Record low-interest rates and a sustained series of Brisbane infrastructure projects kicking off for the Olympics in 2032 will continue to provide a fertile sales environment. I still believe that Brisbane is the value buy of the Australian East coast, especially our inner-city apartment market.
We are genuinely operating in one of the golden eras of Brisbane real estate.