Connect with us

Opinion

Millennials driving new-found optimism in housing market

Published

on

Millennials driving new-found optimism in housing market

HOME hunters have singled 2018 out as the year they will finally make a move on the housing market, with Millennials driving the newfound optimism.

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.

Millennials are driving new-found optimism in the housing market, a new poll has found.

Millennials are driving new-found optimism in the housing market, a new poll has found.Source:Supplied

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.

 

A national poll has revealed two in five people believe it is a good time to buy a home. Image: AAP/Sam Mooy.

A national poll has revealed two in five people believe it is a good time to buy a home. Image: AAP/Sam Mooy.Source:AAP

“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.”

Canstar financial services expert Steve Mickenbecker.

Canstar financial services expert Steve Mickenbecker.Source:Supplied

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.

New research has found a new wave optimism in the housing market in 2018. Photo: Jodie Richter.

New research has found a new wave optimism in the housing market in 2018. Photo: Jodie Richter.Source:News Corp Australia

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

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Opinion

Expert insight: Should investors buy Brisbane properties today?

Published

on

Expert insight Should investors buy Brisbane properties today

With the Sydney and Melbourne property markets declining, the stability of the Brisbane property market has been welcomed by investors with open arms. Will the Queensland capital ultimately emerge as the next investment hotspot?

While Brisbane has yet to witness a stellar growth in its property market, the capital city has remained stable in the past few months as other major capital cities suffer continuous decline in property values.

As a result, a considerable number of investors are starting to flock into the Queensland capital, hoping to take advantage of the affordable entry points and consequently benefit from the eventual rise of its property market in the near future.

How exactly will the Brisbane property market be performing in the next five years?

Streamline Property Buying’s Melinda Jennison said that, in general, she’s optimistic about the Brisbane property market moving forward.

“We’ve certainly had a lot of headwinds as have all property markets now that the royal commission and the federal election are behind us, even though we still have tight lending – that’s going to continue into the foreseeable future, I think. With the second half of the year coming up, one or two rate cuts may provide further stimulus into the market.”

“Brisbane itself had a 38 per cent reduction in building commencements just in the last 12 months. We had an oversupply in the apartment market but that has been absorbed by the accelerating population growth. Vacancy rates are now declining in some of the inner city locations,” the buyer’s agent highlighted.

With good population growth and a decline in housing supply, the Brisbane property market only needs employment and wage growth to complete the ‘perfect recipe for upward pressure on prices’, according to Ms Jennison.

Where to invest

As there is no ‘one size fits all’ strategy for investing in property, Ms Jennison highlights the importance of understanding the investor’s personal goals before ultimately jumping into a purchase.

What type of results do they want—rental yield, capital growth, or a balance of both? How can they get their considering their personal and financial capabilities and limitations?

Moreover, investors are encouraged to study the fundamentals that will drive growth into their assets over the long-term.

Ms Jennison said: “We love trains and sub-train line locations, but Brisbane is very widespread and we don’t simply buy in all train line locations.”

“There are blue chip suburbs and the fringe suburbs just on the outer areas of those blue chip locations – the train lines there, that’s where we’re certainly looking at right now… Where there’s price disparity between one suburb and the next, there are certainly opportunities for investors there.”

Apart from train stations, investors are also advised to look out for ongoing and upcoming infrastructure projects in the area, which could ultimately spur growth for investment properties.

In Moreton Bay, for instance, the new campus of the University of Sunshine Coast is expected to improve the housing market conditions across The Mill at Moreton Bay, the new destination with the university at its core, and, ultimately, the entire Moreton Bay region.

Stage one of the campus, which will be located adjacent to the Petrie railway station, is set to be completed in time for the first semester of 2020.

“We feel that Moreton Bay will gentrify quite quickly with young university students moving in, so we’ll see the types of accommodation gradually change over time to suit their preferences. There’s lots of opportunities within the area and the region as a whole because of this gentrification.”

Finally, rezoning may also spur growth in certain property markets across Brisbane in the near future.

Local councils often rezone land to assist in the planning for future growth. Rezoning, therefore, typically occurs around growth corridors or areas where the population and infrastructure spending has been rapidly increasing.

“A lot of the land has been rezoned and we’re certainly still finding great opportunities in that region for investors that are in the $500,000-price point. If we were to categorise investors in Brisbane based on price point alone, that would definitely be our preferred location right now.”

“Were not going Logan or Ipswich for the simple reason that property investment is all about supply and demand—the availability of future supply of land in the Moreton Bay region is a lot more limited than it is when you go west towards Ipswich or when you go south towards the Gold Coast,” Ms Jennison explained.

At the moment, Brisbane is ripe with off-market opportunities, which puts investors who engage property professionals at an advantage.

Property professionals with local knowledge of the markets could serve as the perfect guide and ‘insider’ as investors try to navigate the real estate landscape, especially in changing markets such as Brisbane. Thus, investors are strongly encouraged to engage field experts, where appropriate.

“We’re certainly getting a lot of off-market opportunities presented to us as we get an influx of interstate investor activity… There’s some great buying opportunities across Brisbane, and we’re achieving yields of upwards of 5 per cent right now.. Even up to 5.5 or 6 per cent per annum,” she concluded.

Source: brisbaneinvestor.com.au

Continue Reading

Opinion

How good an investment is south-east Queensland

Published

on

How good an investment is south-east Queensland

Why do we believe we’ll see increasing investor interest in this market? Strong population growth, a diversified and growing economy, and substantial investment in infrastructure should combine to boost demand.

We expect that these factors will swell the number of white-collar jobs – increasing demand for office space, which in turn will push down vacancy rates and raise rental incomes. This should be good news for office property investors – especially those like Centuria Metropolitan REIT (CMA) that are already well-positioned in the market.

A significant and growing population

South East Queensland (SEQ) stretches from the Gold Coast up to the Sunshine Coast and across to Toowoomba in the west. As Australia’s third-largest population zone, the region has been growing significantly, particularly Brisbane and the Gold Coast. Interstate migration figures show a pattern of steady net migration, with Queensland the only Australian state with consistent net inflows of people from other states. In the five years prior to the 2016 Census, over 220,000 people moved to the Sunshine State – mainly to SEQ where nearly 90% of population growth occurred. This is important for property investors because of its implications for demand, but the trend is interconnected with other favourable factors.

A diversified economy poised for growth

Queensland’s economy is diversified across a range of industries including agriculture, resources, construction, tourism, manufacturing, and services. Over the past two decades, its economic growth has consistently exceeded the national average – and in our view this is likely to continue.

The resources sector is gaining momentum, and a significant pipeline of major infrastructure and development projects is helping propel economic and jobs growth, in turn increasing interstate migration and driving demand for both residential and commercial property.

Investment in infrastructure

A strong infrastructure program delivers more than business and consumer amenity – it generates jobs, drives investment, and facilitates population growth. The pipeline of infrastructure and development projects announced in the past few years is likely to have a material impact on the region – substantially improving its accessibility and amenity – most notably, Brisbane’s Queen’s Wharf precinct and the Cross River Rail.

Queen’s Wharf, touted as a “world-class entertainment precinct”, is an integrated resort development costing $3.6 billion and covering over 26 hectares with retail, dining, hotel and entertainment spaces. As Queensland’s biggest ever tourism project it will be a game-changer for Brisbane, attracting overseas as well as local visitors.  Estimated to contribute $1.69 billion annually to the economy, it will employ more than 2,000 people during construction and an estimated 10,000 once operational.

The Queensland Government’s number one infrastructure project, the $5.4 billion Cross River Rail, comprises a new 10.2km rail line between Dutton Park and Bowen Hills, which includes a 5.9km tunnel under the Brisbane River and CBD. It’s the first major rail infrastructure investment in the inner city since 1986 and is set to generate urban renewal, economic development and the revitalisation of inner-city precincts.

Outlook for commercial office property investment

These factors indicate a region poised for growth – and for growing commercial property demand. CMA’s portfolio has a significant exposure to the area in general (six SEQ assets with a combined book value of over $480 million), with many of the individual assets located in those parts of Brisbane set to benefit most from these developments.

Our view is that Brisbane office markets, where five of CMA’s assets sit, are continuing to improve, with vacancies hitting a five-year low – indicating increasing tenant demand – and continued yield compression, demonstrating strong investment demand. Office sales hit the highest level in a decade during 2018 (at $2.35 billion), increasing 60% from 2017.

With the strong outlook for SEQ, we expect the region will continue to attract tenants and investors alike.

Source: brisbaneinvestor.com.au

Continue Reading

Opinion

Brisbane’s out-performing real estate markets: Hotspotting’s Terry Ryder

Published

on

Brisbane's out-performing real estate markets Hotspotting's Terry Ryder

Brisbane is like a car where the engine is revving but it can’t move forward because the handbrake is on. The city’s property market is poised for an up-cycle but, according to the generalised price data published in mainstream media, it’s not yet happening.

Brisbane is like a car where the engine is revving but it can’t move forward because the handbrake is on. The city’s property market is poised for an up-cycle but, according to the generalised price data published in mainstream media, it’s not yet happening.

The key point for investors, however, is that there are many Brisbane markets achieving above-average price growth.

There’s no doubt that Brisbane real estate has an underlying strength and it continues to show gradual improvement in its market. It remains poised to deliver on the potential shown by advances in the economy, population trends (lots of Sydney refugees are escaping to affordable South-East Queensland) and infrastructure spending. 

The price data for the Greater Brisbane Area is noteworthy, because it shows that the generalised figures published in mainstream media are highly misleading. The latest figures from sources like SQM Research, Domain and CoreLogic have Brisbane houses showing little or no growth in the past year, but Hotspotting’s suburb-by-suburb analysis shows there are many out-performers.

We analysed 269 suburban markets, looking at the latest price figures showing quarterly and annual growth rates: 83 of them have recorded annual price growth above 5% (including 20 suburbs with double-digit growth) and another 100 have recorded growth below 5%; 47 have dropped by less than 5% and 39 have dropped more than 5%.

This means seven out of 10 suburban markets have median prices higher than a year ago – very different to the trend in Sydney which is dominating media coverage and causing careless analysts and writers to morph that into a national downturn.

Many of the Brisbane suburbs where the median house price has lifted more than 10% are higher-end markets, including Bardon (up 11% to $1,005,000), Hendra (up 13% to 1,100,000), Graceville (up 13% to $950,000), Kenmore Hills (up 10.5% to $900,000), Norman Park (up 10% to $950,000) and Paddington (up 11% to $1,165,000).

But the highest annual growth in median house prices has been recorded for Sandgate houses (up 19% to $755,000).

A key trend is that 27 or the 39 markets with prices down more than 5% are unit markets: median prices have dropped for apartments in Bowen Hills (20%), Bulimba (15%), East Brisbane (15%), Woodridge (10%), Greenslopes (11%), Hamilton (11%) and Woody Point (18%). 

This reflects the cold reality that the Brisbane unit market has been oversupplied for the past few years – and not just in the inner-city areas.

The Moreton Bay Region LGA has been the busiest market in Greater Brisbane for some time – and my latest survey of sales activity shows that the number of suburbs with rising demand has risen from 7 (six months ago) to 12 – making it one of the leading municipalities in the nation for growth markets.

Growth locations include Bray Park (median $435,000), where quarterly sales have been 37, 57, 62 and 65 in the past 12 months; Murrumba Downs ($540,000) where the sales pattern has been 50, 60, 58 and 68; and Everton Hills ($595,000), where sales have been 26, 39, 39 and 45. 

A number of Moreton Bay suburbs recorded good median price growth in the past 12 months, including Beachmere (up 10%), Sandstone Point (8%), Upper Caboolture (7.5%), Strathpine (10%), Burpengary East (up 9%) and numerous others which grew 5-6%.

The Brisbane-north precinct (the northern suburbs of the sprawling Brisbane City Council area) is now level with the Moreton Bay Region on growth markets (those where demand, as measured by sales volumes, is rising). 

With Moreton Bay Region and Brisbane-north the strongest market, it means the Brisbane market is strongest north of the Brisbane River (with more than half the rising suburbs in the Greater Brisbane area being in these two northside precincts).

A number of Brisbane-north suburbs recorded have good annual price growth, headed by Gordon Park (9%), Hendra (13%), Sandgate (19%), Newmarket (8%) and Nudgee (10%) – while many others have grown 5-6-7%.

These numbers, once again, show how misleading the generalised data is – and that investors need to dig a little deeper to find the growth markets. Brisbane – boosted by the affordability and rental yield comparisons with the biggest cities – has a lot more forward momentum than the media reports suggest.

Once the handbrake comes off (with the big banks starting to compete for business again and the Federal Election soon to be history), Brisbane will become a more obviously upwardly-mobile market.  

Source: brisbaneinvestor.com.au

Continue Reading

Make Your Super Work

smsf property investment smsf borrowing

Positive Cashflow Property

duplex designs, dual occupancy homes

Property Investment Advice

rentals brisbane, rent brisbane, brisbane rentals

Trending