This year has presented more than its fair share of disastrous circumstances – from a global pandemic to floods and fires – it’s safe to say this is one of the most challenging years many Australians have lived to see. So with all that’s happened so far in 2020, the big question is what is happening in the Brisbane property market? Has coronavirus impacted the value of Brisbane properties? Is now a good time to buy? Or a good time to sell? This article is an overview of what’s been happening in Brisbane’s property market and answers some of your most frequently asked real estate questions.
I’m a first home buyer. What’s on offer for me?
The First Home Owner’s Grant is available to those looking to make their first property purchase. If eligible, first home buyers qualify for a $15,000 grant to go towards their first home. There is a home builder’s grant available right now also, giving eligible applicants $25,000 to go towards the build of a new home. This grant can also be used for extensive renovations of a property, which is all extremely helpful for first home buyers, helping them to secure a property and turn it into a home. If first home buyers purchase a property for less than $500,000 too, stamp duty is waived which can be a huge saving for those looking to get a foot on the property ladder. Finally, it is important to highlight that interest rates are at an all-time low, so the conditions are perfect for first home buyers looking to acquire their first home.
First home buyers vs investors
Statistics are showing that investors have gone quiet in the current property market, making first home buyers the biggest players on the real estate scene. Onsite inspections and auctions were shut down quickly in the early months of the year, which changed the dynamic of the market. The number of auctions in Brisbane declined by 50 per cent year on year and stock entering the market slowed down. The Brisbane property market was starting to recover in February after the strict restrictions imposed by the Banking Royal Commission. The investor market was showing signs of recovery at this point, but within six weeks, a nationwide lockdown brought things to a grinding halt. Now, coming into spring, there is every chance that investors will find some confidence to re-enter the property market, but current trends are showing that the first home buyers are the key spenders.
What’s the state of the market?
At the time of writing this blog, a search for properties for sale in the Greater Brisbane area returned a result of 10,174 properties. Comparatively a search in other state’s major cities showed that Sydney only had 301 listings in the city area, and Melbourne had 2085. Perth, on the other hand, had 20,787 currently listed. So what does all of this mean?
Firstly it means for the Brisbane seller, there is a lot of stock to compete with. In a buyer’s market, there is plenty to choose from and the difference between a quick and successful sale and a long, drawn-out process could boil down to your marketing and your price.
In the Greater Brisbane region in the past month, REA reported 1250 properties to have sold and settled, meaning that 12 per cent of properties listed sold in the past month.
This means a sale may take some time at the moment, but there are still buyers out there – particularly in the lower price bracket around the $500,000. Investors and First Home Buyers – now is your time.
Will stock increase in spring?
Typically the Brisbane real estate market sees an increase in listings in spring, and with the fairer weather, buyers seem to come out of the woodwork. This explains the spike in median house prices in September 2019 in the next point below. With the added hurdle of COVID, it’s anyone’s guess if the market will be impacted this spring, but it is comforting to know that real estate agents are required by legislation to adhere to particular protocols when conducting open homes to ensure the safety of both the vendor and the potential purchasers.
With border closures and tight security on out of area visitors, the likelihood of interstate and international purchasers entering the market is significantly impacted. This can mean a lower base of potential purchasers this spring, particularly those looking for a holiday investment property. Only time will tell what the impact of the absence of holiday goers from interstate will do to housing prices and stock turnover.
What’s the median house price in Brisbane?
According to data compiled by Home Track, the median house price in Brisbane City has remained consistent across the past 12 months. The prices have held steady through the COVID period with only marginally small decreases in the median price. CoreLogic recorded a 0.6 per cent increase in March and a 0.3 per cent increase in April. At its peak in September 2019, the median property price was $525,000 and as of July 2020, the median price sat at $508,000. These figures suggest that whilst the property market isn’t booming, it certainly hasn’t been drastically impacted by the global pandemic.
Will the end of job keeper impact the real estate market?
Typically the real estate market moves in cycles with peaks and troughs, and historically it has been directly impacted by the state of the economy. Chief Economist, Shane Oliver has forecast that property prices across Australia could be impacted by up to 20 per cent, while CBA has predicted Brisbane could experience declines of approximately 5-7 per cent.
Job Keeper payments have been extended to March 28, 2021, and the hopes that a national vaccination may become available in the near future could mean fewer restrictions and a reprieve for the struggling economy. With a healthy dose of uncertainty for the future – only time will tell what the Government’s plans for Australia and Queensland will be and how those plans will affect the property market.
Be sure to do your homework
If you are in the market to purchase a property right now – it’s important to know that it is possible to buy and, in fact, it’s a buyer’s market. If you are looking to make a property purchase, be sure to dot your I’s and cross your t’s. A thorough building and pest inspection is necessary and the peace of mind you will have before entering into such an important transaction is completely invaluable. Just because there is a lot on the market right now, does not excuse you from doing your due diligence. Particularly on auction properties – don’t be fooled by accepting a report that has been supplied by the owner or real estate agent. Have someone independent conduct one for you. Because you have hired them they work only for you and will give you all of the information you need to protect yourself from buying something that might be in need of tremendous repair.