Posted by Rob Honeycombe on 15 February 2010
A recent full price sale in South Brisbane
Brisbane’s inner city home buyers are out in force and 2010 is looking like it might easily overtake last year’s sales volumes. Regular readers will know we’re reluctant to draw too wide a comment based on a small number of transactions. But right now we’re flat out!
Market commentators will probably note the recent RBA decision to hold official interest rates, but the activity from Brisbane home buyers was already busy before this piece of good news.
Of our last seven sales 5 were secured within a week of the property going on the market. Unsurprisingly the prices achieved have been strong.
During 2009 sellers sat on their hands waiting for a healthier market and those that have now made the decision to sell are being rewarded.
Tags: Brisbane home prices, interest rates, Reserve Bank, sales volumes Brisbane
Posted in Brisbane's sales market | No Comments »
Posted by Rob Honeycombe on 8 April 2009
So the Reserve Bank dropped official rates yesterday and we now have a cash rate of 3%, the lowest since 1960. What’s next from the government for property? We all know confidence remains low but (while not wanting to talk things up) the worst may be over for real estate. In March the major property web portals had another big jump in traffic. Almost 5 million visitors went to realestate.com.au, up 11% on the same time last year.
Some markets (but not all) are witnessing more sales. In making the rate cut announcement the Reserve Bank’s Governor confirmed there’s been more activity. “Demand for credit is weak overall, though credit for owner‑occupied housing is picking up”, he said. The chatter about the market right now is getting more positive. The big surge of course has been from first home buyers, keen to take up the $7000 boost to the usual grants. In the last quarter of 2008 the govt handed out 7,659 FHOG giftbags, up a whopping 39% on the previous 3 months. And we can’t help wondering if Swan and Rudd will feel that when the boost offer expires on June 30th it’ll be time to shift their support to another market.
Reserve Bank deputy Ric Battellino might agree. He last week told a Brisbane seminar the grant’s benefits could quickly be eroded. “By all accounts the bottom end of the housing market has picked up a lot in recent times and it doesn’t take long for the average house price to increase by $20,000 and leave the homebuyers no better off than they were before.” Market analyst Michael Matusik is opposed to the grant. “The FHOG is inflationary, distorts the normal cycle and creates few new homes over the longer term.” He argues in a time of undersupply we should have incentives to build new housing.
Some commentators worry that removing the first home boost will punish the lower end of the market. But our view is there’s a whole bunch of forgotten buyers on the sidelines getting closer to acting. Investors might just be the next busy audience as they recognise the opportunities on offer.
How should the government support the housing market? We’d love to hear your comments…
Tags: Brisbane home prices, Brisbane housing supply, first home buyers, interest rates, Michael Matusik, Reserve Bank, www.realestate.com.au
Posted in Brisbane's sales market, property taxes and rates etc, trends in Brisbane property | 1 Comment »
Posted by admin on 5 March 2008
The announcement of a further 0.25% interest rate rise has predictably drawn comment that recent strong property sales volumes will slow. And we agree. There’s no doubt buyer confidence in the market will ease because this is exactly what the Reserve Bank needs. To rein in inflation the RBA needs you and I to put our wallets away. But in the face of this co-ordinated campaign to slow property sales we thought it worth reviewing some of the supply and demand issues behind Brisbane’s solid property price growth.
More people require more homes, and the ABS tells us our national population grows by 1 person every 1 minute and 42 seconds. New arrivals off the plane pretty much cancel out deaths, so every time a doctor slaps a new-born bum our country needs more homes. Queensland was the only state last year to record significant population growth (approx 24,000) while NSW the only to record a big drop (approx 24,000 – if only they would support our Origin team once they got here!).
What about ability to borrow and repay a loan? Our unemployment rate dropped again in January, now at 4.1%. And in the year to November our wages were up 5%. There’s no doubt interest rate rises will put home ownership out of many people’s reach, and these people will continue to rent, adding pressure to that surging market.
On the supply side Queensland’s building approvals dropped almost 6% in December and nationally we had a 3% drop in investment housing finance in the same month. The Housing Industry Association says we’re undersupplied by 20,000 homes and the prices of new homes are continuing to rise. In its recent HIA Trades Report it records all residential construction trades as being in short supply with SE Qld one of the most severely affected by skills shortages. If you can’t find a sparkie to fix anything it’s because they’re rated as “critical short supply”. Booms in mining, infrastructure works and commercial building are all forcing construction prices higher.
Overall we have more people earning more money needing more homes, with those homes costing more to build. In areas like Brisbane’s inner city this situation is at its strongest. So while the RBA wields its ‘rates sabre’ the decision to not buy will for many be based on fear, that strongest of investment emotions.
For those who understand the strength of demand and scarcity of supply, and recognise an opportunity, this could well be a great time to buy.
Tags: Australian Bureau of Statistics, Brisbane housing supply, Housing Industry Association, interest rates, population growth Brisbane, Reserve Bank, unemployment rate Australia
Posted in Brisbane's sales market, trends in Brisbane property | No Comments »
