A NEW wave of optimism has hit the housing market, with Aussies singling out 2018 as the year they’ll finally chase down their dreams of property ownership — and Millennials are leading the charge.
A national poll has revealed two in five people believe it is a good time to buy a home amid rock bottom interest rates, less competition from foreign buyers and a national cooling in house prices.
Nearly a third of those surveyed plan to buy property this year, whether upsizing, investing, moving to a new area or buying their first home, according to the YouGov Galaxy Poll commissioned by Realestate.com.au.
Millennials have driven much of the new-found optimism, with more than half of those born between 1983 and 2000 planning to pull the trigger on a home purchase.
Realestate.com.au head of home loans Andrew Russell said the increased optimism was the result of a shift to more stable price movements amid a low interest rate environment.
“With a lot of the recent commentary talking about a slowdown, some buyers may be looking at the market and thinking it will be a good time to buy,” Mr Russell said.
Activity on Realestate.com.au’s home loan platforms showed confidence was at a high among one group in particular, he added.
“Excitement is coming from all categories of buyers, but especially first homebuyers,” Mr Russell said.
“It shows that the dream of home ownership has continued to grow and first homebuyers are more confident they can achieve that dream than perhaps they were in years past.”
Canstar financial services expert Steve Mickenbecker said some homebuyers may had spotted a rare gap in the market.
“Rates are at rock bottom, are likely to stay low for some time and prices are down in some areas so you’ve got a lot of people saying ‘now’s our chance’,” Mr Mickenbecker said.
“Investor participation is down too and there are less foreign buyers in the market so some (house hunters) may feel there’s more space for them.”
Brisbane couple Matt Brandon, 31, and Alice Tidmarsh, 27, have just bought their first home together and are feeling positive about their decision.
“With interest rates low and the first homeowners grant still available, I think it’s a great time to get in to the market,” Mr Brandon said.
The Millennials have purchased a new townhouse in a residential development in Cannon Hill and will be paying only $25 more a week than they currently are renting.
“Our plan was to buy something new and live in it for one to two years,” Mr Brandon said.
“We would like to build a portfolio in the future.
“This isn’t going to be our last home — it’s a stepping stone.”
Aaron Woolard of Place Estate Agents said about 80 per cent of his clients were Millennials renting in the trendy, Brisbane inner-city suburbs of New Farm and Teneriffe, who were now looking to buy there.
Mr Woolard said Millennials were willing to spend up to $1 million to get into those suburbs, even if it meant taking on a bigger mortgage.
“Most people I talk to want to get into the market and invest wisely,” he said.
“They have drive and ambition to reach their goals, and one of those is property.”
Mr Woolard said he had also noticed an increase in the number of young people wanting to take advantage of the extension of the Queensland First Home Owners’ Grant to June 30 this year.
The research surveyed more than 1000 people across the country under age, gender and regional quotas reflecting ABS demographics estimates.
The survey also included a mix of renters, adult children living with their parents, mortgagees and those who owned their properties outright.
With less barriers to potentially shut buyers out of the market, those with property ambitions said lofty prices would likely be their biggest obstacle.
More than half of respondents (53 per cent) said high prices would be the factor most likely to derail their property goals for the year, followed by not being able to borrow as much as they would like (30 per cent).
To combat those challenges, 84 per cent of Australians were prepared to make sacrifices to get into the market.
That percentage rose to 94 per cent for Millennials, who were more likely than Baby Boomers and Gen Y buyers to forgo luxuries such as a new car, overseas travel and new clothes, among others.
“Young people are determined to get into the housing market,” Mr Russell said. “They realise how much a home loan will impact their lives and they’re willing to make sacrifices.”
WHAT MILLENNIALS WOULD SACRIFICE FOR HOME OWNERSHIP:
— New car 62%
— New clothes 58%
— Eating out/going to movies 56%
— Domestic holidays 50%
— Overseas holidays 68%
— Private health insurance 36%
— No sacrifice 7%
(Source: YouGov Galaxy poll)
Originally published: brisbaneinvestor.com.au
Queensland is the next property hotspot, experts say
As New South Wales and Victoria continue to experience weakness. Queensland is expected to take the lead, a National Australia Bank (NAB) poll of property professionals revealed.
According to the survey, industry experts project house prices in Queensland to increase by 0.7% next year and 1.3% in two years.
Some areas seen to perform strongly over the next year include Brisbane, Cairns, the Gold Coast, and the Sunshine Coast. Out of the suburbs, Coomera and New Farm are expected to realize robust gains.
Meanwhile, Queensland’s rental market is also poised to enjoy an upward boost, growing by 1.3% next year and 1.9% in two years. This is despite the stricter rules on housing investment.
The respondents of the survey also expect Queensland to retain foreign buyer interest. In fact, the share of foreign sales hit a four-year high of 22.8% over the previous quarter.
The results of the survey go against NAB’s own projection of the market. For instance, the bank expects house prices to remain flat in Brisbane over the next three years. Unit prices, on the other hand, is seen to fall by 4.5% over the next year.
NAB chief economist Alan Oster said Brisbane’s housing market seemed to be going sideways and its unit market still creates concern.
“It hasn’t peaked yet, so that’s good. We’re seeing quite strong economic activity in Queensland, so that always helps,” Oster said, as quoted by The Courier-Mail.
Gold Coast house values record the biggest growth in Queensland
The Gold Coast has recorded the strongest growth in house prices in Queensland over the past 12 months.
GOLD Coast house prices are leading the way in Queensland, up six per cent in the past 12 months to an average $620,000.
The latest figures by the Real Estate Institute of Queensland show homes on the Glitter Strip are $35,000 more on the same time last year.
Unit prices are up 1.9 per cent to $428,000.
REIQ data reveals houses on the Glitter Strip are worth $35,000 on the same time last year.
REIQ’s Queensland Market Monitor for March said the strong population growth came on the back of infrastructure projects such as the $550 million Gold Coast Health and Knowledge Precinct and M1 upgrades.
“The property market has been one of the big winners from the sporting event as the $1.5 billion infrastructure investment has boosted confidence and demand for housing in the region,” the report stated.
“We expect house prices will show an upward path in 2018. However, this growth will most likely be more moderate.”
A quiet real estate period leading up to, and during, the Commonwealth Games likely contributed to a slight drop (-0.3 per cent) in the March quarterly median sales price, the report reveals.
Andrew Henderson says a growing population and employment opportunities were contributing to a strong property market. Picture: Jerad Williams
REIQ Gold Coast zone chairman Andrew Henderson said he expected interstate migration to continue to benefit the city.
“I expect the market to remain strong,” he said.
“There is a heavy amount of interstate buyers moving here.
“I was at an auction recently where the winning bidder was from Sydney and the underbidder was from Melbourne.”
Mr Henderson said growing employment opportunities were also attracting homebuyers to the city.
The Gold Coast property market is expected to remain strong.
“We have some of the best health facilities in the country and our universities are world recognised.
“Those two things alone complement the tourism industry and the lifestyle aspects that the Coast offers.”
The report found the fastest-selling suburbs on the Coast included Worongary, Merrimac, Highland Park, Mudgeeraba and Carrara.
It also revealed the rental vacancy held tight throughout the first quarter of the year at 1.1 per cent.
Andrew Bell says the Coast had evolved from a tourist town into a vibrant city with an expanding economy. Picture Mike Batterham
Ray White Surfers Paradise Group CEO Andrew Bell said the Games heralded the next chapter for the Coast, as it evolved from a tourist town into a vibrant city with an expanding economy.
“The city’s property market is riding the irreversible momentum that has now come to the Gold Coast in terms of economic diversity and with more employment options we will need more housing options for people,” Mr Bell said.
“We are no longer going to be subject to tourism upsides and downsides as we were in the past because our economy has well and truly diversified beyond just tourism.”
Australia’s golden triangle of opportunity
It was great to be back on the Gold Coast for the 21st annual Australasian Real Estate Conference (AREC), attended by over 4,000 of Australia’s best industry professionals. While I was there I was once again reminded of how much potential the South-East Queensland property market is offering both sea changers and investors at this stage in its market cycle.
In my view, Brisbane is the best market in Australia currently for short to medium term price growth, with the value gap between it and the other big East Coast capitals as large as I’ve seen it in many years.
When you factor in the key drivers for future growth – liveability, affordability, scale and future economic prospects, they all suggest that Brisbane is a market to invest in. Check out the latest statistics from CoreLogic below.
Value gap – median house prices
Value gap – median apartment prices
I’ve been bullish on Brisbane for many years and in hindsight, I called its next growth phase a couple of years too early. It’s had some growth in recent years but there is a lot more to come over the next few years.
According to McGrath’s top prestige agent in Brisbane, Alex Jordan, one of the dominant trends today is downsizers buying up luxury apartments.
Alex says: “Despite the reported oversupply in Brisbane’s inner city apartment market, we are seeing great strength in the prestige apartment sector.
“The luxury apartment market ($1M+) is driven by owner occupiers, particularly baby boomers and empty nesters, who are attracted to less maintenance and better accessibility.
“Popular suburbs include New Farm, Newstead, Teneriffe, Kangaroo Point, South Brisbane, St Lucia, Paddington and the Brisbane CBD. These areas offer a desirable lifestyle with an abundance of shopping, dining and entertaining precincts at their doorstep.”
South East Queensland has so many options for asset-rich, cash-poor southerners. Many of our customers in Sydney and Melbourne are looking closely at South East Queensland both for investment and a potential sea change. I believe its affordability will continue to attract record levels of interstate migration.
If you live in Sydney or Melbourne and you’re struggling with the mortgage and cost of living, Brisbane is a fantastic alternative. It offers big city job opportunities, high quality education options and the chance to transform your financial future.
The boom delivered Sydney and Melbourne home owners a capital gain of up to 75% – that’s enormous new equity that could be cashed in to fund an amazing new lifestyle with far less mortgage stress up north. Plus, you’d be buying in just before Brisbane’s next wave of price growth. It’s the perfect scenario.
I believe the area from the Gold Coast to Toowoomba and up to the Sunshine Coast is Australia’s golden triangle right now.
Toowoomba, with its expanded airport facilities which have opened up easy access to the south, is the perfect and affordable treechange destination. Known as Queensland’s Garden City, about 2,300 people moved here from Brisbane last year for its cheaper house prices and enjoyable regional city lifestyle.
Both the Gold Coast and Sunshine Coast are also appealing sea change options benefitting from a raft of new infrastructure that will drive further population growth and generate more local jobs.
Brisbane is one of the world’s great cities but I don’t think this is fully realised as yet. If you haven’t been to Brisbane for a number of years, get on a plane. This is a thriving city that offers many of the lifestyle amenities you love about the southern capitals but at a much cheaper price.
I think Brisbane will also become very attractive to migration and investment from Asia in the years ahead.
South East Queensland is offering opportunity everywhere for both owner occupiers and investors alike. Now’s the time to consider what Australia’s premier lifestyle market can do for you!
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