AS Generation Ys grow up and become a bigger force in the residential property market during the next decade they will be one of the main groups that influence how our housing and suburbs work.
By the time 2020 rolls around Baby Boomers will no longer be the dominant force in the Ipswich property market, according to property consultants Urbis.
Urbis director of economics and market research Jon Rivera said it would be those currently aged 18-32 who would make up half of Brisbane’s population by then and would put the most demand on the housing market.
“In less than seven years, one of Australia’s largest population groups will be moving out of the family home and into independent living as 60 per cent of the generation Y demographic will be aged between 25 and 36 years of age,’’ he said.
“Housing demand from this group may be one of Brisbane’s biggest ever.’’
He said the shift toward the sort of housing generation Y were interested in had already started. They looked for affordability, lifestyle and accessibility, which meant many bought units.
“I think we have really been in the middle of it (the change) since probably the catalyst point was the GFC.’’
A lift in overseas migration had helped to swell the ranks of gen Y as a large majority of migrants were aged between 20 and 35.
“When we look at projections that we have been modelling, about 60 per cent of gen Y (in 2020) will be above the age of 24. Close to 30 to 35 per cent will be above the age of 30.’’
Mr Rivera said the type of property those people were looking at was focused on lifestyle.
“Generation Y is the most mobile and globally connected generation that property has ever seen and will be seeking dwellings and products of their time.
“Due to housing affordability in the areas where they really want to live, in the early years generation Y will opt to purchase an apartment or townhouse in Brisbane’s middle ring suburbs or rent an apartment in the inner city.
“They are a product of their time; they want low maintenance, walkability and trying to balance that all within the cost of living.’’
As a result Mr Rivera said houses were not going to be the preferred option for many as it was too expensive. Apartments were an easy entry point, low maintenance and in the location they were after.
As the opportunities to develop housing close to the city were becoming scarcer, Mr Rivera said it would show its true value in the future.
“We will see more infill (development) in the middle ring,’’ he said. “I think Brisbane is really well placed for this change, because we have got some good fundamentals.
He refers to the future demand as having a “Westfield effect’’.
“If you look at Brisbane a lot of growth areas are around Westfield shopping centres. Carindale, Mt Gravatt, Chermside, Indooroopilly. They will be good hubs.’’
Mr Rivera said those suburbs with strong transport links and services would benefit from demand.
“Brisbane will grow not just from the centre but from the outside (suburbs) in.’’
Despite the emergence of gen Y as a property buying force, Mr Rivera said Baby Boomers would still have a role to play.
Many would downsize to three-bedroom apartments in the inner city in mixed-aged environments and in locations with shops, restaurants and entertainment, or move to coastal lifestyle locations.
“Already, the December 2012 and March 2013 quarters have registered a bounce back in the number of sales for owner-occupied, three-bedroom apartments.’’
Mr Rivera said in the next three decades the different housing demands of different generation types would change Brisbane’s inner and middle ring suburbs.
“Projects such as Nundah Village, Showground Hill, Boggo Road Urban Village and East Village are examples of these urban precincts which will be behind Brisbane’s transformation.’’
Original article published at www.news.com.au by Michelle Hele The Courier Mail 17/6/2013
Experts warn of ‘debt bomb’ as housing downturn worsens
That’s according to the sobering 60 Minutes segment Bricks and Slaughter which aired last night, revealing the country’s property downturn was just the tip of the iceberg.
According to reporter Tom Steinfort, the current slump is actually “more like falling off a cliff”, with a number of real estate and finance experts claiming houses could plummet in value by up to 40 per cent in the next 12 months.
If that happens, it would also cause an economic “catastrophe”.
Mr Steinfort spoke with data scientist Martin North from Digital Finance Analytics, who said Australia was uniquely vulnerable when it came to an economic crash tied to a property downturn.
“At the worst end of the spectrum, if everything turns against us we could see property prices 40-45 per cent down from their peaks, which is a huge deal,” he said.
“That’s higher than any other country in the Western world by a long way.
“There’s probably no country in the world more susceptible to the ramifications of a housing crash than Australia. We are uniquely exposed at the moment.”
Mr North said Australia was now in the same position as the US was back in 2006 and 2007 — a position which triggered an economic collapse.
“As a society, and as a government, and as a regulatory system, we’re all banking on the home price engine that just goes on giving and giving and giving. It’s not going to,” he said.
“We’ve got a debt bomb, we’ve got a debt crisis and at some point it’s going to explode in our face.”
He said foreclosures had also risen by 600 per cent in the region.
“The mortgage stress is definitely being felt especially in this area,” he said.
60 Minutes also spoke with several Aussie homeowners who gave harrowing details of the stress they faced trying to pay off their mortgages, including having their power turned off and being “hounded’ by their banks.
What does a million dollars buy in Aussie capital cities?
Market analyst Louis Christopher of SQM Research said the market had been “clearly overvalued”, labelling the downturn as the “correction we had to have” — at least in Sydney and Melbourne.
“On our numbers, Sydney was effectively over 40 per cent overvalued. And Melbourne was overvalued by about the same amount,” he said.
But property investor Bushy Martin said the blame lay squarely at the feet of buyers who “mortgaged themselves up to their eyeballs” in a bid to snap up dream homes before being able to afford them.
However, the segment has also sparked backlash online, with some claiming the situation had been exaggerated.
One Reddit user branded the report as an example of “alarmist journalism and scare tactics”, while another said it was “dramatic and cringe-worthy”.
Others also criticised the segment for making it seem like all homeowners would be affected, when the downturn was actually mainly focused in the NSW and Victorian capitals.
And some said it was unfair to blame the banks for the situation, and that homeowners needed to take responsibility for their own decisions.
That was in response to comments made by one homeowner on the program, who said the bank had “suddenly switched the mortgage to interest and principal”, raising his repayments by 57 per cent.
“The interest only part annoyed me the most. The bank didn’t ‘suddenly change’ your repayment from (interest only) to (Principal and interest) your IO term expired. You a) knew this would happen and b) assumed the bank would renew it when it expired. I hope this speculator gets burnt first,” one Reddit user said.
Related article: Experts warn of ‘debt bomb’ as housing downturn worsens
Queensland is the next property hotspot, experts say
As New South Wales and Victoria continue to experience weakness. Queensland is expected to take the lead, a National Australia Bank (NAB) poll of property professionals revealed.
According to the survey, industry experts project house prices in Queensland to increase by 0.7% next year and 1.3% in two years.
Some areas seen to perform strongly over the next year include Brisbane, Cairns, the Gold Coast, and the Sunshine Coast. Out of the suburbs, Coomera and New Farm are expected to realize robust gains.
Meanwhile, Queensland’s rental market is also poised to enjoy an upward boost, growing by 1.3% next year and 1.9% in two years. This is despite the stricter rules on housing investment.
The respondents of the survey also expect Queensland to retain foreign buyer interest. In fact, the share of foreign sales hit a four-year high of 22.8% over the previous quarter.
The results of the survey go against NAB’s own projection of the market. For instance, the bank expects house prices to remain flat in Brisbane over the next three years. Unit prices, on the other hand, is seen to fall by 4.5% over the next year.
NAB chief economist Alan Oster said Brisbane’s housing market seemed to be going sideways and its unit market still creates concern.
“It hasn’t peaked yet, so that’s good. We’re seeing quite strong economic activity in Queensland, so that always helps,” Oster said, as quoted by The Courier-Mail.
Gold Coast house values record the biggest growth in Queensland
The Gold Coast has recorded the strongest growth in house prices in Queensland over the past 12 months.
GOLD Coast house prices are leading the way in Queensland, up six per cent in the past 12 months to an average $620,000.
The latest figures by the Real Estate Institute of Queensland show homes on the Glitter Strip are $35,000 more on the same time last year.
Unit prices are up 1.9 per cent to $428,000.
REIQ data reveals houses on the Glitter Strip are worth $35,000 on the same time last year.
REIQ’s Queensland Market Monitor for March said the strong population growth came on the back of infrastructure projects such as the $550 million Gold Coast Health and Knowledge Precinct and M1 upgrades.
“The property market has been one of the big winners from the sporting event as the $1.5 billion infrastructure investment has boosted confidence and demand for housing in the region,” the report stated.
“We expect house prices will show an upward path in 2018. However, this growth will most likely be more moderate.”
A quiet real estate period leading up to, and during, the Commonwealth Games likely contributed to a slight drop (-0.3 per cent) in the March quarterly median sales price, the report reveals.
Andrew Henderson says a growing population and employment opportunities were contributing to a strong property market. Picture: Jerad Williams
REIQ Gold Coast zone chairman Andrew Henderson said he expected interstate migration to continue to benefit the city.
“I expect the market to remain strong,” he said.
“There is a heavy amount of interstate buyers moving here.
“I was at an auction recently where the winning bidder was from Sydney and the underbidder was from Melbourne.”
Mr Henderson said growing employment opportunities were also attracting homebuyers to the city.
The Gold Coast property market is expected to remain strong.
“We have some of the best health facilities in the country and our universities are world recognised.
“Those two things alone complement the tourism industry and the lifestyle aspects that the Coast offers.”
The report found the fastest-selling suburbs on the Coast included Worongary, Merrimac, Highland Park, Mudgeeraba and Carrara.
It also revealed the rental vacancy held tight throughout the first quarter of the year at 1.1 per cent.
Andrew Bell says the Coast had evolved from a tourist town into a vibrant city with an expanding economy. Picture Mike Batterham
Ray White Surfers Paradise Group CEO Andrew Bell said the Games heralded the next chapter for the Coast, as it evolved from a tourist town into a vibrant city with an expanding economy.
“The city’s property market is riding the irreversible momentum that has now come to the Gold Coast in terms of economic diversity and with more employment options we will need more housing options for people,” Mr Bell said.
“We are no longer going to be subject to tourism upsides and downsides as we were in the past because our economy has well and truly diversified beyond just tourism.”