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Hudson Report August 5th 2019
Recent price movements from the Brisbane Residential Property market are promising; they provide the long hoped for green shoots for investors.
The July Australian Property Market Report from realestate.com.au has shown Brisbane to be the only capital city to report positive price growth in the June quarter. The median property price rose 0.1% – I agree not much- to $490K whilst ALL the OTHER capitals fell back .
The fundamentals in Qld are strong from population increase (mostly from interstate) to increased confidence in the mining sector and massive infrastructure spending from all levels of government.
Australia wide factors fed into the local bounce as well including;
- The Liberal government re-election has provide more confidence to the economy whilst at the same time removing the uncertainties that a change to negative gearing and CGT regime had brought to the market prior to May 18
- Two rate cuts from the RBA have mostly started to flow through the economy
- The APRA relaxation of lending requirements for the major banks has improved borrowing capacity across the board
- Tax cuts of $1,080 on average have begun to hit bank accounts improving consumer sentiment and cash flow capacity
The longer term forecasts on the market fundamentals, likewise is positive. In its recent quarterly report he respected BIS Oxford Economic team nominated Brisbane as there top capital city performer over the coming three years.
They reviewed the fundamentals of the supply and demand in the city and opined;
“ The strongest price growth in the three years to June 2022 is forecast for Brisbane, where attractive affordability, a recovering economy and an emerging dwelling deficiency will underpin price growth” BIS Oxford Economics
There forecast was for an increase in the median dwelling price in Brisbane of 20% over the three years to June 2022.
The market in Brisbane has not enjoyed the growth experienced by Sydney and Melbourne over the past ten years . The larger capitals have experienced much large price rises over the past ten years but also have seen large price falls over the past 2 to 3 years as the over heated markets have come back to realistic levels.
As more and more residents of the expensive and congested NSW and VIC capitals look north to the relatively low prices on offer for property in Brisbane, many are voting with their feet and making the move.
The improved economy is providing the jobs they need to sustain the lifestyle they seek
This migration is not a new phenomenon but rather a repeat of what has occurred in past residential property cycles. As Sydney and Melbourne property prices have increased many residents have voted with there feet and moved to areas that provide them with a more affordable housing option as well as lifestyle and career opportunities
The improving economy in QLD provides the job opportunities that were not there three years ago and the infrastructure spending with increase these opportunities and expand the overall economy
For investors this fundamental shift provides opportunities as well.
More realistic entry prices for property as well as a still reasonable rental yield across Brisbane and lower overall interest rates make for a compelling investment narrative.
If you would like to discuss your personal situation in light of this scenario with your Hudson Adviser please call 1800 80 4296
Courier Mail July 11 2019
Bis Oxford Economics Residential Property prospects 2019 – 2022