Low stock has potential buyers worried
The “supersonic” property boom continues to soar with latest data showing a yearly growth rate of nearly 20 per cent — the biggest annual hike since the 1980s.
CoreLogic figures show housing prices have risen almost 11 times faster than wages growth over the past year and are set to soar even further.
Head of Research Eliza Owen said this created a significant barrier to entry for those who do not yet own a home.
The sales figures show Brisbane’s annual price rise was 18.4 per cent.
“Through the late 1980s, the annual pace of national home value appreciation was as high as 31 per cent, so the market isn’t quite in unprecedented territory.
“The annual growth rate at the moment is trending higher, in fact, it is 3.6 times higher than the 30-year average rate of annual growth.
“These are extraordinary growth rates, however for the Sunshine State, we did see huge rates in the early 2000s as well due to the mining boom.”
Brisbane ranked the third-fastest city for price growth for August (2 per cent) ranking third behind Canberra (2.2 per cent) and Hobart (2.3 per cent) when it came to prices in August.
“With mortgage rates as low as they are I think this will continue to support growth into next year, but the rate of growth will slow,” she said.
“Some people are facing affordability constraints, we are already seeing a reduction in number of first home buyers participating and that will eventually slow rates before we see that turn in the market when we see prices start to come down.”
Core Logic found in dollar terms the annual increase in national dwelling value equated to about $103,400 or $1,990 a week.
“In comparison Australian wages are rising at the average annual rate of 1.7 per cent,” Ms Owen said.
Disillusioned home hunters are also missing out due to a lack of stock.
Ms Owen said houses for sale were down 30 per cent as owners worried if they sold they would not be able to buy “back in” the same market.
“There is a very broad-based upswing in prices,” she said.
“So it is not just the high end of the market that is rising, it is also the more affordable areas like Springwood, Kingston, areas like that, that have also seen increases of around 18 per cent in the last year.”
Strong Melbourne interest
When it comes to interstate migration to Queensland, Ms Owen said data showed Melburnians were streaming into the sunshine state looking for COVID-free safety and a better lifestyle.
“From Melbourne to Queensland, it is up by about 30 per cent when you compare the first three months of this year with the same period last year,” she said.
“You can’t help but think some of that has to be due to the extended lockdowns that have taken place across Melbourne as well.”
Prices ‘will sustain at these levels’
Deloitte Australia’s Alex Collinson agrees there are plenty more would-be Queenslanders looking to relocate to a safe COVID-free haven.
“Based on our forecast, the back half of 2022 to 2026, the annual increase in population for Queensland would be in the order of 40,000 to 50,000 people a year,” he said.
The overwhelming migration figures led Premier Annastacia Palaszczuk to claim last week that “Queensland is being loved to death”, as she paused interstate hotspot arrivals for two weeks.
“Interest rates are at historic lows and the percentage of income, which is the payments for mortgages, are lower than they were two or three years ago,” Mr Collinson said.
The staggering growth figures have also been reflected in ANZ’s recent house price growth forecast for 2021.
It joined other major banks in predicting a further 20 percent jump due to confidence in buying and selling during lockdowns.
But agents at the coal face agents say many buyers are anxious.
‘Better than a boom’
Gabrielle describes the market as “nuts”.
“We have had properties that have sold for nearly half a million dollars more than we thought were going to — it is just extraordinary,” she said.
A house in Indooroopilly, went for nearly $300,000 over the reserve at $2,260,000 on the day Brisbane went into its last lockdown on July 31.
“And we thought our expectations were pretty high — some auctions are getting 120 bids,” .
“Town houses equally have spiked — it is a lovely way of having a home that is quite large without the price tag of a house.
West of Brisbane, Ipswich agent Steve said he had sold through many booms over the past 20 years in real estate, but “this is not a boom — it is better than a boom”.
While prices are cheaper in the Ipswich region, they are still the highest the industry has ever seen.
“We quite regularly see $50,000 to $60,000 over the list price, if you have got something exceptional,”
“And we’ve seen a 20 per cent price increase in the last year.
“It is not uncommon also that we are now getting eight to 10 offers on a single property and 80 per cent of everything we sell, sells within seven to 10 days.”
With affordable homes in the region , interstate investors were flooding in.
“Last week I sold two properties where I was Facetiming these people interstate, so the only inspection is what we show them as we walk through the house,” he said.