Current economic conditions have been described as the “perfect storm” for potential property buyers, driving up prices across the country at the fastest rate of growth in almost two decades. Historically low interest rates and a severe shortage of stock are the two key drivers behind a rapidly building momentum, leaving sellers firmly in the power position as buyers scramble to secure a property.
Data house Corelogic revealed this week that after an unexpectedly resilient performance in 2020, home values surged by 2.1% last month, the greatest monthly rise since 2003. With annualised growth now at 5%, Brisbane is predicted to outperform its southern counterparts this year, with strong demand underpinned by Australian expats moving back home as well as a rising rate of interstate migration, also at a 20 year high.
The most recent forecasting report from Australia’s second largest lender, Westpac, predicts that South East Queensland is on the cusp of a property boom, set to deliver 20% growth in Brisbane property prices over the next two years. While the prospect of such rapid price growth brings the inevitable conjecture over the potential for a bubble, economists say the risk is low, with much of the growth driven by owner-occupiers focused on lifestyle, rather than speculative investor activity.
CBA boss, Matt Comyn, said the difference this time around is in the data behind the demand. Investors were behind the most recent property boom, which in 2015 centered in Sydney and Melbourne and was characterized by more than half of new lending flowing to landlords. This time around, he says property markets in Sydney and Melbourne are not strong on a relative basis, with some lenders reporting as much as 85% of their lending books currently attributed to owner occupiers.
On a local level, we are experiencing a severe shortage of properties for sale and are continuing to record extreme levels of enquiry and attendance at open home inspections. This high level of competition is resulting in sales results that are exceeding expectations, often with shorter than predicted days on market.
Ultimately, for any property owner who’s been considering selling, the current dynamics are compelling to say the least. If you’re in that position, or just interested to know what your property might be worth, please don’t hesitate to get in touch.
All the best,