Rising home prices and tropical island holidays…
Across Australia home prices made a solid recovery in 2013. The stats show Sydney and Melbourne soared ahead while some towns still lumber behind (yes we’re talking about you again Hobart). But overall the move is up.
Brisbane’s had a promising if not spectacular year of price gains (up around 2.8% according to RP Data), our prices now almost back to the 2009 peak and tipped to mark new ground in 2014.
And when home prices rise people feel good. Take this new stat from the USA for example: In the year to September 30th American homeowners gained $2.2 trillion in equity. That’s 2.2 million millions. Now there’s one of the planet’s wealthiest nations feeling pretty good about their economic fortunes. Rising home equity is giving them options to spend. And spend they will.
And so too here. We know Australians have been paying down their mortgages and other debt over recent years. Throw in some price growth and net equity is rising for many Australian households. Our economic options open up to us.
At shops, school concerts and funerals, I’ve been asked “how’s the market?” It’s a popular time to be a real estate agent. When there’s a running story of price growth homeowners love to get a snippet of good news. What they really want to know is, can I afford that new car; will our next island holiday be at Bribie or Hayman; can we loosen the purse strings a bit?
Consider the inner-Brisbane property market of the past 6 months particularly and the inflow of investors from Sydney. With median home price growth of 12.5% in the past year in that city, they could be forgiven for feeling a bit flush. That percentage lift on their prices (now up to $640,000) adds up to a lot of spare equity. In the early 2000’s we heard that line about the “Commonwealth of Australia” being replaced by the “Sydney-wealth”, and it’s not far from the truth again right now.
We’re not economists and we don’t try to read the real estate tea-leaves. But looking to 2014 Brisbane’s property market looks healthy. With such a big price gap between us and Sydney/Melbourne, southern interest in investing here seems unlikely to slow. Brisbane real estate market is already busier (turnover is up approx 20%) so selling a property here is easier and our own local confidence is rising.
It might be time to book the villa at Hayman. It’s about to get crowded!
We’d love to hear your comments about the market. And yes, we did just put that picture of Hayman Island in this post so we could imagine we’re there this Christmas!