Posted by Rob Honeycombe on 7 April 2009
Will property developers take a risk?
Marketing is all about perceptions and Hyundai USA have a remarkable new offer for car buyers. Buy one of their cars then if you lose your job you can return it for a refund. And Hyundai will make your car payments for you for 3 months, saying “It’s easier to find a job when you have a car”!
Are they nuts?! A recent Colmar Brunton survey of Australians found that while unemployment here might tip 7% almost half of us feel less secure in our jobs. Hyundai USA know that while lots of people worry, only a few jobs will be lost. They’re taking some risk but how many cars will they sell if they sit on their hands? Big risk in that.
So where’s the real estate connection? That same Australian survey showed 52% of us believe now is a good time to buy a property. But they’re not buying. Real economic problems are effecting home buyers, but how much more damage is being done by perceived problems?
There’s a lot of buyers looking and waiting in Brisbane right now. Rents have risen, costs of ownership are low and buyers have plenty of choice. You can sense that the most common conversation of 2010 might well be, “I wish I’d bought in 2009!” But fear of the unknown is stopping many.
When might one of our nation’s big builders or developers take Hyundai’s lead?
Tags: Colmar Brunton, home buyers Brisbane, unemployment rate Australia
Posted in Brisbane's sales market, real estate marketing | No Comments »
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 »
Posted by Rob Honeycombe on 15 November 2006
Brisbane’s inner city property values have gone up twice as fast as homes in outer suburbs, according to recent research. Valuers Herron Todd White drew a 5km radius from the GPO and found the median price there had jumped almost 500% since 1991, compared with just 243% for homes within the 20-25km radius. Interestingly the rates of growth were similar until 2001 so the past five years has seen Brisbane’s inner city really race ahead. HTW say urban renewal and the growth of café strips have contributed.
The population trend ‘downtown’ (and subsequent housing boom) now seems well entrenched in Australia but for an international comparison of property growth rates we took a quick look at the city that never sleeps. New York’s metro region has also well and truly outperformed suburban USA: its median house price grew 46% in the past 3 years while their national figure was 31%. NYC has had a long reputation as a desirable inner city lifestyle and over the past 15 years averaged annual price growth of 9% versus 5% nationally. Today a slice of the big apple will cost you AUD$656,500!
The link between a sought-after lifestyle and capital gains mightn’t be the only things inner city Brisvegas and NYC have in common: New Yorkers are experiencing strong job growth and now boast an unemployment rate of just 5.3%. Almost as good as Queensland’s 4.5%.
Tags: Brisbane home prices, Herron Todd White, New York, unemployment rate Australia, urban renewal Brisbane
Posted in Brisbane's sales market, trends in Brisbane property | No Comments »
