Beyond the hype…. is this another boom market?
They’re just not great headlines: “Market good, some prices up strongly, other prices up a bit”. And of course it serves some peoples’ interests to talk a market up, especially if they have a bunch of new properties to sell. So amongst the repeated stories of a return to boom days, here’s a quick look at the stats and some thoughts from on the ground in Brisbane’s inner suburbs.
According to Macquarie Real Estate Brisbane’s house prices rose 9% in the first half of this year. Matusik Property Insights report a jump of 6% in the June quarter alone (yes that’s 24% annualised). These are very strong numbers from very credible sources. And with just under 50,000 people moving to Queensland in 2006 (net of those deserting us!) demand for housing is strong. Matusik rightly reports that supply is still constrained, and shortfalls in Brisbane are “acute”.
Inner city Brisbane is clearly a mixed bag with houses and many apartments suited to owner-occupants selling fast and with prices that reflect the reported stats. It’s fair to say we are going through a mini-boom in some pockets. Investors though have not yet leapt back into the market in big numbers. While rents are rising they’re not on fire, so net returns are yet to stir serious levels of interest. And investors are a little preoccupied elsewhere. ABS report a $72billion increase in Australians’ superannuation assets during the June quarter as people rushed to meet the June 30 deadline. That money’s simply not flowing back to property – yet.
So for a lot of smaller or older inner Brisbane apartments there’s now some big price savings compared to larger apartments and houses right next door, simply because there’s fewer buyers for them. The part-time developers are starting to pounce on unwanted, tired apartments and doing a Blitz/Block/Hot Property makeover, serving them back to a hungry owner-resident market. For those keen buyers who enjoy painting bathroom ceilings on their Sunday mornings there’ll no doubt be some dollars to be made!