Timing or time? Decisions for Brisbane home buyers
This has been a start to a year unlike any I’ve seen before and home buyers and investors could be forgiven for being a little unsure of which way the market is heading. But interestingly the past two weeks has seen some of the busiest sales enquiry we’ve had to our agency in months. Maybe the Premier was right in saying we breed “tough north of the border”.
To help you make some sense of it all for Brisbane’s inner city property market, here’s a snapshot of some of the latest research commentary:
Westpac’s Chief Economist Bill Evans says interest rates will stay flat, maybe rising just a 0.25% by June 2012. At a seminar we attended this week he said the expected economic impact of the flood recovery has seen him jump his GDP forecast from 3.4% to 4.2% for 2011. He expects more than $2.5b to be spent on post flood works. Queensland’s exports remain strong and he has increased his growth expectation from 4.25% to 5% for the “sunshine” state. That seems a pretty impressive number.
Amongst a balanced range of comments he made the point that Australians are “de-leveraging” at a great rate, with our savings rate now higher than it’s been since the 1960’s. Housing affordability is not as big an issue as often proposed.
Population growth, or the cooling of its pace, has been raised as a question mark on demand. Local commentator Michael Matusik says Queensland grew by 89,000 in 2010, now a lower number than NSW and Victoria are getting. We’re not attracting the net migration we used to. But with 244 new people crossing the border each and every day (and many of them choosing inner-city Brisbane) it still seems a big number. And will Victorians and New South Welshmen stay put in future?
RP Data released 2010 stats showing Brisbane’s house price dropped 1% for the year. And amongst their data here’s the info we believe most home buyers and property investors should consider: During this past decade Brisbane’s house prices rose an average of 10.6% per annum. Over the past 5 years it was 6.6% per annum. We don’t know what they’ll do over the next 5 and 10 years and that’s exactly the point.
We were looking this morning at the true cost of owning an inner-Brisbane investment property and one real life example was $100 per week – or approx 1% of the apartment’s value. Tax deductions and strong rents shouldered much of the holding cost so if its value rises more than 1% that investor is ahead.
If you can “pick” an upcoming jump in the market you’re wiser than most. The rest of us might just recognise the long term view that’s served inner Brisbane property owners so well in the past.