Despite going into recession only mid last year, the Australian property market has recovered well and is positioned with a strong opportunity for growth, not only in 2021 but in the next few years to come. Holding the property fort at bay for many months now has been the Queensland market due to both the way it’s been able to contain outbreaks as well as its agreeable climate, attracting many southerners with a collective corporate realisation that working remotely means you can live almost anywhere you choose. Many investors are these days looking closely at the Brisbane market to decide if this is the time for a bull run.
The beginning of the pandemic brought a great amount of uncertainty to the table. Both buyers and sellers were worried about the repercussions of their decisions and it provided a grey area for the future of the property market. However, in a surprising revelation, the market seems to be hotter than ever. The labor market is continuing to improve and the local economy is outperforming predicted forecasts and people are ready to buy. Westpac economists Bill Evans and Matthew Hassan stated, “The bottom line is that Australia’s housing upturn now has strong momentum that looks to be lifting further and will remain well supported by monetary conditions and an improving economic backdrop,” A promising statement bringing hope back to Australian buyers and the economy.
Furthermore, looking locally, it is predicted that Brisbane is positioned to become one of the best performing property markets over the next three years in Australia. Removal of overly restrictive lending rules, the likelihood of rates staying low for the next few years and swift recovery of the economy from the disruption brought by the pandemic are three important factors driving this positive growth. In addition, increased internal migration due to more affordable property prices in Brisbane compared to Melbourne and Sydney and increasing consumer sentiment are also factors that are affecting the market outlook. Economist Saul Eslake told the Sydney Morning Herald, “Much of the demand is coming from first-time buyers, who appear to perceive an opportunity to get into the housing market without facing the competition from cashed-up immigrants or negatively geared domestic investors, which has ‘squeezed’ them out for most of the preceding 30 years.” People want to act now as they currently have more opportunities than they ever have before.
From our perspective, we’re buoyed by what we’ve seen at Astute in the last 12 months. For many Australians, interest rates have helped reduce the pressure for Australian households during the past 12mths and in 2021 as a mortgage broker, I expect to see more Australians consolidating their debts to pay them off faster.
Refinance activity has been strong. With reduced travel opportunities, plans to renovate, move, buy or sell seem to have been brought forward. I expect, even more, great deals to be offered by lenders in the coming months, as they push to keep the good times.
However, due to all the buzz and popularity around the Brisbane market, the number of properties available for sale are beginning to dry up; meaning competition is at an all-time high. Buyers are beginning to struggle to find ideal properties which are resulting in unsatisfied potential buyers. But the historically low-interest rates are attracting a mass of purchasers into the market. The demand is slowly becoming higher than the supply. Along with this, property prices are increasing which will be interesting to follow over the coming months. Will there be an increase in the number of property listings? There is much to consider for potential buyers and investors.
Is now the time to invest?
Different variables always come into play when talking about investment and there is never one specific or perfect time to bite the bullet. However, in the current climate money is cheap and there are plenty of great resources and opportunities available for prospective buyers… so it's pretty close! A recent report by Westpac looked at the record low-interest rates and forecast a potential 8-10% rise in real estate values across most of the country's capital cities both this year and the next. Rushing into an investment property without assessing all your options available is not recommended but neither is waiting around until after prices rise.
So where do you start?
Finding the right property for you to invest in along with the financial capacity can be a stressful and difficult process. That's why talking and dealing with a trusted real estate agent and mortgage broker is highly recommended to ensure that you are making the best decision to suit your circumstances.
We certainly suggest getting in contact with us early to assist with your planning stage so that you know what is achievable for your budget and how best to go about securing the loan that you want.
We’re always open to a call so feel free to reach out to discuss.
Disclaimer:
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