Brisbane was enjoying growth as part of the housing market recoveryoccurring throughout Australia; however, the impact of COVID-19 may change this in the short term.
CoreLogic’s Home Value Index indicated that Brisbane was one of the four capital cities where housing values hit new highs, as prices went up by 2% over the three months to January.
Open houses were certainly seeing a lot of traffic, creating much welcome business for Brisbane agents.
“Right from the first Saturday in January, we witnessed record numbers of people at open homes, most likely fuelled by the low interest rates, the limited volume of properties available for sale, and rising market confidence,” says Melinda Jennison, managing director of Streamline Property Buyers.
“Looking ahead, interest rates are expected to see further reductions in 2020, which, along with consistently strong population growth in southeast Queensland, is likely to continue to support housing demand in Brisbane.”
The implementation of the First Home Loan Deposit Scheme is anticipated to kick-start competition for properties priced up to the set threshold of $475,000, and falling supply may also heighten demand given the city’s increasing population.
“According to the January 2020 quarterly ABS data, dwelling approvals, commencements and completions are all collapsing across Queensland as a whole, despite rising population growth,” Jennison reports.
“Total dwelling commencements are down 27% from the previous year. Additionally, listing volumes remain 6% lower in Brisbane compared to this time last year, so this also puts limits on the available supply in the current market.”
ABS statistics for June 2019 also indicated that net interstate migration gains were the highest in Queensland, at 22,800 people.
Meanwhile, a strong showing in the rental market continues to benefit investors. Rental returns remain reasonably high at an average of 4.5%, and rental rates were up as well over the year to February 2020.
As per the 2019 December Vacancy Rate Report published by the Real Estate Institute of Queensland, the average vacancy rate in the state tightened slightly by 0.1% to 2.1% over the December quarter. More than half of the Queensland rental market is regarded as ‘tight’, with the Whitsundays, Caloundra Coast and Livingstone regions recording the lowest vacancy rate in the state, at 0.4%.
SUBURB TO WATCH
WEST END: High yields in Townsville suburb
Located at the base of Castle Hill, the Far North Queensland suburb of West End enjoys a very strong rental market. With more than half of the suburb’s population composed of tenants, landlords reap significant rental returns (an average of 5.2% for houses and 6.0% for units) from advertised weekly rents of $350 and $250, respectively.
Rental rates skyrocketed in the year to December 2019 – by 9.4% for houses and 13.6% for units.
Buyers are not going to have a hard time getting into the market either, as the affordable median price for both property types remains below the $300,000 mark.
Population: West End residents are primarily renters, giving landlords a steady stream of potential tenants
Affordability: Local properties are low priced, with majority in the $200k range