Brisbane property market update
Many of our clients at William Buck are property investors. Just as many aspire to or are keen to increase their property portfolios, in some cases, a lack of time, knowledge and confidence holds them back from making the investment decision. For several years now we have been working with Tracey Gardiner, Managing Director of TG Property Solutions.
Tracey is a buyer’s agent. She works for property buyers, from people who are looking for their first home to seasoned investors, helping them to source commercial and residential investment properties alike. We asked Tracey to comment on the current state of the Brisbane property market and share her thoughts with us.
Tracey Gardiner: “There is an obvious change in sentiment surrounding the Brisbane property market since the new year. It seems as though buyers have awoken from a slumber and are out in record numbers inspecting properties and making offers. My real estate agent contacts are reporting record numbers of people through their open homes for inspections.
My thoughts on what has been happening include;
- A stable government, the completion of the financial Royal Commission, APRA changes and lower interest rates have combined to breathe life back into the property market;
- Media sensationalism has changed from a “property crash” mentality to a property boom. Be wary of this, as I always say, there is not one Australian property market; there is not one Brisbane property market. There are many property markets with areas of boom and areas of bust. The positive signs from the southern markets are helping our own market here in Brisbane.
- Interest rates for term deposits are at an all-time low while residential rental yields in the Brisbane residential market are still quite strong. Interest rates for Investor borrowing continue to trend downwards and APRA has loosened the rules around investor borrowing for interest-only loans. This is enticing investors into the property market.
Currently, in Brisbane, there is a rising demand with a relatively low supply of listings. In December 2019 the number of properties listed for sale across Australia was 12% lower than in December 2018.
The construction of new dwellings has decreased with the Australian Bureau of Statistics indicating the level of new builds in the last quarter as the lowest in 7 years.
Having said that, building approvals are on the rise but it will be some time before these builds can start due to lengthy approval processes and take even longer before they hit the market for sale.
House prices are on the rise.
What to look for as an investor
Obviously, property investing can be quite complicated and very overwhelming for most people. Some just roll the dice and hope they are buying in a location that will increase in value. This can be very risky and expensive.
Some things to keep in mind as an investor or owner occupier are;
- Property investment is all about capital growth. Rental yields are great to help you hold onto the property, but the wealth creation comes from long term capital growth.
- Look for suburbs that are affordable, stable, with good rental yields and a solid local economy. Areas that have done well in the past are those with growing infrastructure, good schools and public transport.
- Try to avoid locations with a lot of land available such as new subdivisions opening in stages
- Look at vacancy rates and rental trends
- Compare statistics on owner occupy verse rentals
- Consider if the property is close to universities or in the catchment of schools with a high demand
- Approach the investment with a long term outlook
- Speak with advisors; obtaining advice from professionals such as town planners, accountants, financial planners and buyer’s agents can save you money in the long term as well as the short term. Mistakes made by trying to cut corners can be very expensive.
- When looking at media reports, read past the headline and look at the details. Listen and learn from respectable property professionals, those that are out in the market every day.
- When investing, buying in major cities is generally the rule but don’t rule out certain regional areas. Some regions have been out-performing major cities. For example, certain suburbs in Morton Bay have had double-digit growth and areas of regional Victoria have been leading the Australian market. The Sunshine Coast is also another area which has had major infrastructure spending recently with more planned in the next few years.
- Do not procrastinate. There will always be something going on in Australia that can give you an excuse not to move forward.
When the market is slow, people can be wary to buy, however, for investors, this is usually the best time to buy. Last year when purchasing, we had more time to negotiate and less competition. This year we are having to move fast to secure great properties. For example, there was one property I saw on the internet and knew that it would be sought after as it was unique to the popular area with 4 bedrooms, 3 bathrooms and located in the inner city. I asked my client to come with me to the first open home. Usually, I will have a look first to save them time but not this time as I knew the interest would be great. On the first open there were 7 offers! My clients were lucky enough to secure this property because we knew the value of it and we had preapproved finance and clean conditions. The use of a buyer’s agent in these circumstances can give you that competitive edge with agents as well.”
Conclusion
There are indisputable advantages to using the services of an expert in certain areas of your life. When it comes to major expenses it takes of pressure and stress and can even save you money in the long run as you will benefit from the experience and due diligence of someone who does this for a living.
Tracey has worked with many William Buck clients assisting them to purchase both residential and commercial properties. Her diligence, ethical and honest approach has seen consistently positive feedback and successful outcomes.
Tracey can be contacted on 0433 950 951 or at tracey@tgproperty.com.au
