Adam Empringham,
Director of Sales at Image Property.
Why Brisbane Property Prices have Exploded
[lwptoc]By Adam Empringham, Image Property
Twelve short months ago, as coronavirus took hold and societies around the world shut down, with an unprecedented level of fear hanging over us like the darkest storm cloud, there didn’t seem to be much to look forward to.
Now, real estate in southeast Queensland is in the midst of its most exciting and promising period ever.
The sun is shining, confidence is high, there are plenty of reasons to be hopeful, and the mood is one of a bright future.
New data from research firm CoreLogic shows Brisbane’s median house price soared by a staggering 17.7 per cent in the 12 months to July.
The median unit price rose by seven per cent in the same period.
A report by Domain also found this exponential growth is the fastest recorded in some 12 years.
Right now, the median house dwelling value is sitting at $675,000 and for units it’s $420,000.
In terms of pockets of the city enjoying frenzied attention, the growth is across the board but the strongest in the inner-city ring, where median prices are up 30 per cent.
In the city’s north, the increase is almost 20 per cent over the past year, while the west is up 18.9 per cent and the south 17.5 per cent, the Domain analysis found.
This won’t be a short-lived surge either – new modelling from advisory firm KPMG has plotted a bumper few years ahead, as cities like Brisbane benefit from a covid-induced “turbocharge”.
By December 2023, the analysis forecasts a phenomenal further increase of 20 per cent in median house prices.
A range of growth fundamentals
What’s behind this extraordinary demand for housing in the Queensland capital?
One of the big drivers is an influx of new residents from interstate.
Imagine you’ve just spent the past 18 months in Melbourne or Sydney, in and out of lockdown, restrictions tightening and then easing, living in a state of uncertainty and unease.
Looking north of the border to the Sunshine State, you may have been absolutely seething with jealousy.
Thanks to strict infection controls, a rapid response to outbreaks elsewhere in Australia and a low appetite for risk, Queensland has survived relatively unscathed with minimal outbreaks and only a handful of needs for short and sharp lockdowns.
For the most part, life here has continued as normal.
On top of that, the southeast boasts an unbeatable lifestyle, a more relaxed pace, a perfect year-round climate, and, perhaps most alluring for southerners, fantastic bang for your housing buck.
When you consider the extremely cheap cost of borrowing at the moment, with record low interest rates and intense competition among the banks for your business, leading to some great deals, it’s a good time to be in the market for a home or investment.
And given many would-be buyers haven’t splurged on overseas holidays or other high-priced leisure activities nearly as much, a lot have healthy savings to play with, too.
Those factors are likely to prevail for the long-term – especially the anticipated high population growth from interstate migration.
That’s to say nothing of the explosion in infrastructure spending, urban renewal, new development, and amenity improvement to come from preparations for the 2032 Olympic Games.
What a time to sell
If you’re a vendor right now, or considering listing your home for sale, the potential benefits are huge.
For one, you’ve got an extremely captive audience of prospective buyers.
Demand is far outstripping supply and so the number of good quality listings remains low.
Just as quickly as something goes up for sale, it’s gone again, because people are hanging out for great homes to come up, eager to buy and end their long searches.
Competition is robust as a result. Just go to a typical open for inspection on a Saturday and you’ll see what I mean.
You’ll probably find a line of people out the door, through the gate and up the street waiting to get in to check things out.
There’s a strong fear of missing out. Buyers know it’s a great time to be in the market, but they’re keenly aware of the scarcity of listings. They’re motivated, ready to go, and not interested in messing about.
Those potential vendors looking to re-enter the market also have the opportunity to use that extra capital gain to put towards a bigger and better home, that’s then likely to continue benefiting from an extended period of growth.
Average asking rents are also through the roof as investment properties are converted into owner-occupied properties.
They’re now the highest they’ve ever been, exploding 12.5 per cent over the past 12 months to hit $450 per week.
So, those sellers looking to take a bit of the boosted profit from unloading a current property could put it towards an investment and reap the benefits.
Whether someone is selling a family home to downsize or upgrade, selling their first place to get something bigger and better, freeing up cash to become a landlord or add to their portfolio, or simply cashing in on a strong growth run, it’s a fantastic time to be a vendor in the southeast corner of the Sunshine State.
