Opinion
Ipswich property price correction ‘happening now’
He is preparing for property prices to finally correct themselves after the impacts of the GFC and 2011 floods.
Mr Ramsey compared business in the 90s, when he started, to the devastating impact of 2010’s GFC and 2011’s floods.
“The mid 90s were probably equally as hard as the 2011 floods and the GFC,” he said.
“Everyone blames the floods on the downturn but I do recall a downturn in August 2010.
“There was an absolute noticeable drop-off in investors and the take-up rate of property.
“Then the flood came and it just stopped us in our tracks.
When you’re geared for property sales and the tap turns off, you have to restructure your whole business real quick. You have 30 staff and you have to keep feeding them when the sales weren’t coming.”
Mr Ramsey said, luckily, sales started to increase after 2012 and the industry hasn’t looked back since.
“Every year has been better than the last. It’s not back to what it was but it’s happening as we speak.
“Ipswich has not had its correction, the market has been going sideways for nearly 10 years, yet all the Brisbane suburbs have increased.
“Our correction is due and it’s happening.
The curve is going to steepen within the next two years.
“If it happened again, I would be a lot more organised.”
Originally Published: www.qt.com.au
HOME hunters have singled 2018 out as the year they will finally make a move on the housing market, with Millennials driving the newfound optimism.
A NEW wave of optimism has hit the housing market, with Aussies singling out 2018 as the year they’ll finally chase down their dreams of property ownership — and Millennials are leading the charge.
A national poll has revealed two in five people believe it is a good time to buy a home amid rock bottom interest rates, less competition from foreign buyers and a national cooling in house prices.
Nearly a third of those surveyed plan to buy property this year, whether upsizing, investing, moving to a new area or buying their first home, according to the YouGov Galaxy Poll commissioned by Realestate.com.au.
Millennials have driven much of the new-found optimism, with more than half of those born between 1983 and 2000 planning to pull the trigger on a home purchase.
Millennials are driving new-found optimism in the housing market, a new poll has found.Source:Supplied
Realestate.com.au head of home loans Andrew Russell said the increased optimism was the result of a shift to more stable price movements amid a low interest rate environment.
“With a lot of the recent commentary talking about a slowdown, some buyers may be looking at the market and thinking it will be a good time to buy,” Mr Russell said.
Activity on Realestate.com.au’s home loan platforms showed confidence was at a high among one group in particular, he added.
“Excitement is coming from all categories of buyers, but especially first homebuyers,” Mr Russell said.
A national poll has revealed two in five people believe it is a good time to buy a home. Image: AAP/Sam Mooy.Source:AAP
“It shows that the dream of home ownership has continued to grow and first homebuyers are more confident they can achieve that dream than perhaps they were in years past.”
Canstar financial services expert Steve Mickenbecker said some homebuyers may had spotted a rare gap in the market.
“Rates are at rock bottom, are likely to stay low for some time and prices are down in some areas so you’ve got a lot of people saying ‘now’s our chance’,” Mr Mickenbecker said.
“Investor participation is down too and there are less foreign buyers in the market so some (house hunters) may feel there’s more space for them.”
Canstar financial services expert Steve Mickenbecker.Source:Supplied
Brisbane couple Matt Brandon, 31, and Alice Tidmarsh, 27, have just bought their first home together and are feeling positive about their decision.
“With interest rates low and the first homeowners grant still available, I think it’s a great time to get in to the market,” Mr Brandon said.
The Millennials have purchased a new townhouse in a residential development in Cannon Hill and will be paying only $25 more a week than they currently are renting.
“Our plan was to buy something new and live in it for one to two years,” Mr Brandon said.
“We would like to build a portfolio in the future.
“This isn’t going to be our last home — it’s a stepping stone.”
Aaron Woolard of Place Estate Agents said about 80 per cent of his clients were Millennials renting in the trendy, Brisbane inner-city suburbs of New Farm and Teneriffe, who were now looking to buy there.
Mr Woolard said Millennials were willing to spend up to $1 million to get into those suburbs, even if it meant taking on a bigger mortgage.
“Most people I talk to want to get into the market and invest wisely,” he said.
“They have drive and ambition to reach their goals, and one of those is property.”
Mr Woolard said he had also noticed an increase in the number of young people wanting to take advantage of the extension of the Queensland First Home Owners’ Grant to June 30 this year.
New research has found a new wave optimism in the housing market in 2018. Photo: Jodie Richter.Source:News Corp Australia
The research surveyed more than 1000 people across the country under age, gender and regional quotas reflecting ABS demographics estimates.
The survey also included a mix of renters, adult children living with their parents, mortgagees and those who owned their properties outright.
With less barriers to potentially shut buyers out of the market, those with property ambitions said lofty prices would likely be their biggest obstacle.
More than half of respondents (53 per cent) said high prices would be the factor most likely to derail their property goals for the year, followed by not being able to borrow as much as they would like (30 per cent).
To combat those challenges, 84 per cent of Australians were prepared to make sacrifices to get into the market.
That percentage rose to 94 per cent for Millennials, who were more likely than Baby Boomers and Gen Y buyers to forgo luxuries such as a new car, overseas travel and new clothes, among others.
“Young people are determined to get into the housing market,” Mr Russell said. “They realise how much a home loan will impact their lives and they’re willing to make sacrifices.”
WHAT MILLENNIALS WOULD SACRIFICE FOR HOME OWNERSHIP:
— New car 62%
— New clothes 58%
— Eating out/going to movies 56%
— Domestic holidays 50%
— Overseas holidays 68%
— Private health insurance 36%
— No sacrifice 7%
(Source: YouGov Galaxy poll)
Originally published: brisbaneinvestor.com.au
WHETHER you are a first time entrant into the market, a family looking to expand or wanting to dip your toe into the luxury market, these are southeast Queensland’s top spots to buy this year.
Is the new year time for a new home? Whether you are a first time entrant into the market, a family looking to expand or wanting to dip your toe into the luxury market, we’ve asked the experts to nominate the top southeats Queensland suburbs to buy in 2018.
The Experts:
Tony Warland – Ray White Qld CEO
Damian Hackett – Place Estate Agents CEO
Brendan Whipps – Harcourts Qld CEO
Jon Iceton – Belle Property Head Qld
Paul Arthur – Qld Sotheby’s International CEO
Their picks:
FIRST HOME BUYERS (under $500,000)
NORTH
Narangba: A long-time popular suburb for its affordable homes. TW
North Geebung: Growing in value, 20 minutes from CBD with access to motorway and renovated Chermside shopping centre. DH
Banyo: Great buying, emerging services and close to Nundah’s thriving scene. BW
Redcliffe: Affordable waterside suburbs, new rail link, very attractive to the first homebuyer. JI
Banyo: Close to the CBD, train and bus, and strong returns. This a great place. PA
SOUTH
Springfield: Technically southwest. Still close to the CBD, while still in Ipswich Council area. TW
Acacia Ridge: Next to thriving south-side suburbs, without the price tag. Large blocks. DH
Springfield Lakes: Great value for money and plenty of investment surrounding it. BW
Rochedale: An attractive alternative for the first homebuyer looking to enter the Brisbane market. JI
Rochedale South: New estates popping up. this is the best pick for in the south . PA
EAST
Alexandra Hills: Nice steady suburb for homebuyers and investors with good returns. TW
Tingalpa: Great opportunities only minutes away from premium locations like Bulimba and Hawthorne precincts. DH
Wakerley: Close to the Bayside and City, surrounded by big blocks . BW
Murarrie: Post-war weatherboard and chamferboard houses combined with more modern estates. JI
Alexandra Hills: Average home prices of under $500,000, but still less than 30 mins to CBD. PA
WEST
Ipswich: We expect price growth in 2018 as the market has caught up and is ready to go . TW
Forest Lake: New homes at affordable prices in smaller communities with great amenities. DH
Riverhills: Affordable one to watch with better access to the city now through Legacy Way. BW
Oxley: Quiet neighbourhoods with a strong sense of community. Streets are wide and leafy, and many big blocks of land. JI
Ferny Hills / Arana Hills: I can’t go past either for location, quality, and value for money. PA
GOLD COAST
Upper Coomera: Long been a favourite for commuters and for affordable stock in the high growth corridor. TW
Upper Coomera: Continuously evolving, with new homes and developments in safe communities at affordable prices. DH
Ashmore: Great value in low sets and good sized blocks. Pockets of opportunity. BW
Coomera / Hope Island: Within reach of the beaches and an easy commute to Brisbane, great opportunities for the entry level buyer. JI
Varsity Lakes: Smaller homes ideal for first home buyers close to Bond University and Robina Town Centre. PA
SUNSHINE COAST
Sippy Downs: Set for more growth as it becomes more of an education hub. TW
Sippy Downs: It offers housing opportunities close to the Sunshine Coast University at very affordable prices. DH
Caloundra: Beaches, closest Sunny Coast location to Brisbane for work options and beautiful. BW
Caloundra: Plenty of development in the pipeline offering excellent opportunities for those wanting to enter the market. JI
Bli Bli: Increased infrastructure, new developments and regular capital gains.PA
FAMILIES ($500,000 to $1 million)
NORTH
Bracken Ridge: Close to good arterials and shopping centres. A lot of people who sell in Bracken Ridge, buy in Bracken Ridge. TW
Wavell Heights: An attractive suburb close to the M1, with good, quality character homes and homes ready to renovate. DH
Wavell Heights : A hot spot in the inner-north. Beautiful leafy streets and big homes. BW
Wavell Heights: A quick commute to work. Families can capitalise on generous blocks close to the city. JI
Wooloowin / Kalinga: Close to the city, and many great prestigious schools, plus Kedron Brook. Still priced under the luxury market. PA
SOUTH
Rochedale South: This suburb stands out for its volume. This is family heartland. TW
Mount Gravatt East: Still offers value for money. Some of the South’s best school catchment areas, public transport and parks. DH
Daisy Hill: Home to some large, quality homes on large parcels of land. BW
Tarragindi: Easy commute to the CBD and a major motorway heading north and south.JI
Macgregor: Still a relatively undiscovered gem with some great bargains still to be had.PA
EAST
Carina: There’s been a solid five years of growth in Carina and it should continue. TW
Cannon Hill: Affordability for families on reasonable land, and an attractive lifestyle. DH
Camp Hill: It’s hard to beat the inner-east — so much to offer for everyone in the family. BW
Carindale: A lively entertainment and shopping culture, and quiet residential pockets and greenspaces. JI
Manly: Brilliant opportunity for families looking to take advantage of the coastal life while still in reach of the city. PA
36 Watcombe St, Wavell Heights is listed for sale in the popular family suburb. Picture: realestate.com.auSource:Supplied
WEST
Toowong: There’s such strong affinity to St Lucia in this education hub. TW
Kenmore:Large renovated Queenslanders on decent-sized allotments and a leafy lifestyle. DH
Chapel Hill: Leafy, quiet, well positioned and easy access to quality schools. BW
Kenmore: Changing demographic towards younger families, neighbourhood bars and eateries are eon the rise. JI
Bardon/Auchenflower: Close to the city, including Suncorp Stadium, with consistent growth, and great resale. PA
GOLD COAST
Helensvale: Helensvale is rocking. It keeps improving year on year. TW
Elanora: Affordable family homes on larger allotments with easy access to beaches. DH
Hope Island: Big homes with all the lifestyle and quick access to the M1 for commuters.BW
Palm Beach: A fabulous blend of community on the beach. Only minutes from the airport and heart of Surfers Paradise. JI
Parkwood: Larger blocks, many on the golf course. Excellent, central location with easy transport links. PA
SUNSHINE COAST
Buderim: In a high ground area which has always been popular. TW
Coolum: Significant growth in infrastructure and new developments, making it a hotspot for families for affordable beachside living. DH
Buderim: Bustling community with funky cafes, stunning views and close to the beach. BW
Moffat Beach: Beachside neighbourhood which radiates summer. Moffat is becoming a favourite for family’s due to its easy lifestyle. JI
Buderim: Perfect for families. Warm, close-knit community, close to good schools and just over 60 mins to Brisbane CBD. PA
LUXURY – ($1 million plus)
NORTH
Ascot: This is blue ribbon Brisbane’s classic heartland for fine luxury homes. TW
Teneriffe: Riverside hotspot offers one of Brisbane’s best lifestyles. Restaurant precincts and extensive amenities. DH
Clayfield: Stronger than ever, tree lined streets, stunning homes and some hidden value.BW
Hamilton: Picturesque river views, a perfect blend of community vibes, heritage aesthetics and entertainment culture. JI
Hendra: 2018 should see Hendra come into the light after reaching an average sales price above $1m for the first time last year. PA
West End: In the $1 million median club for its great schools and vibrant community. TW
Coorparoo: Strong development and growth, with new developments, like Coorparoo Square, adding to the appeal of the location. DH
Tarragindi: Emerging luxury, family orientated and great proximity to CBD. BW
Coorparoo: A balance of old and new, with character-rich homes and entertainment and lifestyle developments moving into the area. JI
Highgate Hill: It will rebound strongly in 2018, to join the group of suburbs with an average sales price above $1m. PA
EAST
East Brisbane: Strong connections to Kangaroo Point, Woolloongabba and Stones Corner. A lot of real estate opportunity. TW
M anly: A relaxed, seaside community lifestyle, perfect for families and boating enthusiasts. DH
Balmoral: Views, cafes, restaurants, stunning homes — always in high demand. BW
Hawthorne: Premium river side location with an enviable selection of refurbished homes and colonial Queenslanders. JI
Balmoral: Great city views, great community, great lifestyle. PA
39 Yabba St, is listed for sale in the luxury enclave of Ascot.Source:Supplied
WEST
St Lucia: A long held suburb where people buy and hold for many generations. TW
Chelmer: Plenty of opportunity for those who want to live in a renovated Queenslander in a leafy, riverside location. DH
Paddington: Character filled with opulence. so close to the city. BW
St Lucia: Prestigious, renovated Queenslander and federation homes. JI
Brookfield: Seclusion, privacy on generous acreage blocks, Brookfield is now home to Brisbane’s most stunning luxury properties. PA
GOLD COAST
Paradise Point: This has always been an affluent high end sought-after area. TW
Palm Beach: Huge growth in new homes on prime beachfront land along with the opening of trendy restaurants in the main strip. DH
Broadbeach: Say no more — you can have it with no shortage of luxurious choice. BW
Broadbeach: Towering high-rise and contemporary apartments dominate the picture-perfect coastline. JI
Broadbeach Waters: Luxurious, waterfront residences. Enviable lifestyle close to popular shops, cafes, beaches and schools. PA
SUNSHINE COAST
A lexandra Headland: Had two years of growth and we don’t see it slowing anytime soon. TW
Noosa: An incomparable premium beach lifestyle with stunning luxury homes. DH
Noosa: Who doesn’t love Noosa, National Parks, beautiful beaches and relaxed coastal scene. BW
Sunrise: A relaxing beachside location, with pristine beaches and national parks. JI
Noosa: It’s hard to go past Noosa for location and luxury on the Sunshine Coast. It’s a crown that seems to never tarnish. PA
Originally published: brisbaneinvestor.com.au
The Queensland economy is now well into recovery stage after an inevitable slump following the mining boom.
In the third quarter of 2017, state final demand rose a significant 2.7 per cent year-on-year, which was the first time in three years this measure returned a positive result – the culmination of five consecutive quarters of positive growth.
Access Economics have also forecast the Queensland state final demand will average 3.8 per cent annual growth over the next four years, easily outstripping the average annual growth of 0.2 per cent in state final demand over the last five years.
Infrastructure boom set to takeover apartment construction
According to JLL, Queensland employment surged 4.1 per cent year-on-year to August 2017, easily surpassing Victoria and New South Wales (3.7% and 2.3% respectively) and the national figure of 2.8 per cent.
This is in spite of a clear slowdown in the construction of apartments in Brisbane that has been well underway for the better part of 18 months.
Building approvals for units in the greater Brisbane area were down 59.9 per cent for the year to August 2017 as it became harder for both developers and investors to obtain finance.
Interestingly, the pressure from APRA for banks to limit investor finance has actually benefited the Brisbane apartment market. It has inadvertently forced developers to create more appealing and better quality products – which is contributing to a change in buyer profile to more owner-occupiers and less investors and reducing the amount of “cookie cutter” apartments in the market.
Over the coming quarters, it is anticipated approval numbers will remain subdued. However, any negative employment effects felt from a reduction in construction will be offset by the burgeoning pipeline of infrastructure programs currently underway or soon to commence in Queensland.
Major Infrastructure Projects
Cross River Rail
With the recent re-election of the Palaszczuk government, Brisbane’s $5.4 billion Cross River Rail will commence construction next year.
It will involve the construction of four new underground stations, significant upgrades to existing stations and Brisbane’s first southern CBD rail station at Albert Street.
Forecast to create 1,500 jobs annually, the Cross River Rail project is due for completion in 2024.
Queens Wharf Redevelopment
The redevelopment of the $3 billion Queen’s Wharf precinct is one of the largest developments ever undertaken in Queensland. It covers 27.3 hectares, roughly one fifth of the CBD area.
At peak construction, Queens Wharf is projected to created 2,000 jobs with 8,000 jobs ongoing upon completion in 2024.
Queens Wharf will house over 50 restaurants, bars and cafes upon completion, with an additional 1,000 hotel beds and 2,000 apartments in the residential precinct.
Once fully operational, Queen’s Wharf is expected to bring an additional 1.39 million visitors and an increased tourism spend of $1.69 billion annually.
Brisbane Showground regeneration
The redevelopment of the 22-hectare site is the largest brownfield development of its kind in Australia.
Due for completion in 2026, the $2.9 billion redevelopment of the Brisbane showgrounds will generate more than 2,000 jobs over the course of the development and add over $300 million annually to Queensland’s economy.
Brisbane International Airport second runway
This is the largest aviation project currently underway in Australia, and one of the largest currently being undertaken globally.
Due for completion in 2020, the $1.35 billion second runway will create 2,700 construction jobs over seven years.
By 2035, Brisbane airport will handle 50 million passengers a year.
Herston Quarter redevelopment
A world-class health and wellbeing precinct will become a new landmark in Brisbane’s northeast.
The $1.1 billion precinct is due for completion in 2027, creating 700 jobs in the construction phase.
Brisbane Metro
Due to commence in 2019, the $944 million Brisbane Metro project will feature two new high-capacity, high frequency metro lines connecting Brisbane’s southern suburbs and inner northern suburbs with the CBD.
Due for completion in 2022, Brisbane metro will create 7,000 construction jobs.
Brisbane’s Property Outlook
Cyclical lows for inner city residential developments
As the cranes come down and the lights go on, we’ve officially hit the settlement stage of the inner-Brisbane apartment market.
The number of apartments being approved is now at cyclical lows and has been edging that way for quite some time.
Urbis reported the third quarter of 2017 saw only 672 apartments reach development approval status – a significantly lower number than those in the peak of the cycle which reached over 5,000 apartments per quarter in 2014 and 2015.
We’re also seeing cyclical lows for the number of pre-sales achieved each quarter, with the last four quarters averaging 348 in sales volumes.
These figures are a result of the stage of the cycle the market is in, reflecting the natural slowdown in completed stock that will likely carry through until 2020. And while small pockets of Brisbane have seen an oversupply in the last 18 months, prices have not been materially affected.
Significant growth for house prices
This chart from JLL’s third quarter Brisbane Apartment Market report shows Brisbane apartment prices were down only 0.2 per cent as at August 2017 year-on-year, while houses returned a robust 4.2 per cent positive growth story. Given this period spans the peak supply periods of the Brisbane apartment market (2016 and 2017) this is a reasonably solid result for apartments.
On a citywide level for apartment price growth, even the so called “hotspots” have remained relatively buoyant, despite the “oversupply” story.
The table below shows the five strongest and weakest performing suburbs for median price growth for Brisbane houses and units for the 12 months to August 2017.
Supposed “problem suburbs” such as Newstead and Brisbane City have only seen a median price drop of 2 per cent each for the year and other challenging areas such as West End have achieved small positive returns in the 12 months to August 2017 (again, approximately 2%).
Brisbane housing values remain steady against soaring Sydney
The Brisbane housing market has not seen the same run up in prices as our east coast sister cities, Sydney and Melbourne. As a result, Brisbane should be insulated from any major price correction some economists are forecasting for these cities.
In fact, Brisbane’s housing is now valued at only 43 per cent of Sydney’s – which is at both historical and cyclical lows for the last two decades. The chart below shows the relationship between dwelling values in Brisbane as a percentage of Sydney’s and net interstate migration.
So what does this chart tell us?
- Over the last two decades, Queensland’s net interstate migration peaked at just under 40,000 people (2002). This coincided with Brisbane’s housing being at its lowest value in relation to Sydney’s (43%).
- In 2017, the ratio was at the same level as it was in 2002, as a result of Sydney’s recent bull market run up in prices.
- Queensland’s net interstate migration has been steadily increasing since 2014 and history suggests that the dwelling price difference to Sydney (and Melbourne) should lead to a surge in interstate migration in the coming years and a subsequent surge in dwelling values in Brisbane.
Indeed, according to the Macquarie Bank equity strategy team we can expect “another great wave of interstate migration into Queensland.”
Based on past patterns, approximately 130,000 people could be expected to make the migration north into Queensland over the next three years.
The average number of migrants over a three-year period is greater than the peak year in the above chart.
Migration on this scale would more than likely soak up any additional supply in the Brisbane apartment market, and could also drive up real estate prices.
Over the medium-term, the Brisbane property market is looking steady due to:
- Lower apartment supply and surging interstate migration.
- Political stability and a burgeoning pipeline of major infrastructure project.
JLL’s outlook for the Brisbane property market for the 12 months out from December 2017 can be seen below. While there is still some supply to work through the system, the outlook for unit prices in the next 12 months is steady, and they expect price appreciation in the housing market.
Gold Coast to see improving state employment and net migration
The Gold Coast property market boasts similar features to Brisbane – and is likely to see the same benefits as a result.
- Wide price differential compared with Sydney and Melbourne
- Improving state employment picture
- Increasingly stable state government
- Expected increase in net state migration.
Where the Gold Coast market differs is on the supply side of the equation – particularly since the global financial crisis.
Lenders exposed to the Gold Coast apartment market experienced losses at this time, and as a result lending on large developments all but dried up in the ensuing years.
Under normal circumstances, a chronic lack of supply would lead to a sharp upturn in prices – but in the case of the Gold Coast, there was an equal lack of confidence from buyers, particularly from interstate investors.
So, for the Gold Coast, prices are only really now getting back to pre-GFC levels for off-the-plan apartments in desirable beachside locations.
What can we see from this chart?
- The median apartment price for Gold Coast has practically flat-lined since around 2008.
- Historically, the median apartment price of Gold Coast and Sydney have converged after Sydney has had a run up in prices. This should give confidence to buyers of Gold Coast apartments in the short to medium term, given the gap is at the widest it has been in the last 20 years.
Looking ahead
South-east Queensland’s property market seems to have weathered the worst of the economic storm and the oversupply of apartments in and around the Brisbane CBD.
The economic and demographic signs are now positive for both Brisbane and the Gold Coast:
- Strong employment growth
- Extremely strong outlook for the state economy (projections for State Final Demand)
- Huge pipeline of infrastructure yet to be complete
- Net interstate migration story.
If the latter plays out as expected, this should provide an enormous transfer of wealth from the southern states – and would have far reaching positive outcomes for the economy and property prices as a whole.
If the market can navigate 2018 safely, the ensuing years could potentially experience some of the strongest years of price growth for south-east Queensland property since the early 2000s.
Originally Published: brisbaneinvestor.com.au
