Queensland property prices defy COVID-19 downturn as interstate buyers head north in droves

 In Home News Section, Uncategorized

House prices in Queensland are continuing their upward march, growing by an average of 0.6 per cent in Brisbane in November, taking annual growth to 3.2 per cent.

The latest monthly data released by CoreLogic showed prices grew in every capital city rising by 0.8 per cent nationally.

Darwin and Canberra posted the strongest results with gains of 1.9 per cent and the median value of dwellings in Brisbane has now reached $515,267.

In Greater Brisbane, the strongest gains were in the Moreton Bay area which grew by 0.9 per cent and in the south and west of Brisbane where prices were up 0.6 per cent.

In November, prices grew by 2.4 per cent in the Darling Downs/Maranoa area, 2 per cent in Cairns and on the Sunshine Coast, 1.8 per cent in the Wide Bay and 1.5 per cent on the Gold Coast.

CoreLogic’s Head of Research Tim Lawless said price growth in regional Australia was stronger than in the capital cities, with values in regional Queensland leading the way — rising by 3.2 per cent over the past three months.

“That was the fastest growth rate across any of the regional markets around the country and it really demonstrates the trend we’re seeing towards housing demands really rising, particularly in those markets adjacent to Brisbane on the back of relatively low supply levels,” he said.

Mr Lawless said if the current growth persisted, Australian home values were likely to surpass pre-COVID-19 levels early next year.

“Of course extremely low interest rates are one of the primary factors that’s driving housing markets, but on top of that there’s a lot of other different types of incentives … first homebuyers, building grants.”

He said there seemed to be “some increasing urgency in the market”.

“This does seem to be very much a seller’s market, we are seeing relatively slim levels of advertised stock available for sale, homes are selling very quickly, vendors are offering up very little in the way of discount as well.

“So these are all factors that are pushing prices higher.”

Interstate arrivals help fuel price growth

Real Estate Institute of Queensland (REIQ) chief executive officer Antonia Mercorella said the REIQ estimated interstate demand for property had increased by about 20 per cent on last year.

“The interest from interstate is very significant at the moment, even before COVID-19 Queensland was the number one destination for interstate migration,” she said.

“Of course since this pandemic has hit, that demand from interstate buyers — particularly New South Wales and Victoria — has grown even stronger.”

She said the lack of supply was also playing a major role.

“Interstate demand is absolutely having an impact, but it’s really demand overall that’s having the impact,” she said.

“We have quite limited stock and of course when there is strong demand with limited stock, what that means is that properties are being snapped up and it’s a very competitive landscape and that does drive up prices.”

Ms Mercorella said homeowners were reluctant to sell.

“Once upon a time, we used to talk about people owing their properties on average seven years and here in Queensland we’re getting close to 12 years now, so we are holding onto our properties much tighter and longer than we ever have before,” she said.

Southern states clamour for Gold Coast property

Gold Coast real estate agent Tolemy Stevens said there was an “insatiable” appetite for property from interstate buyers.

“At least 80 per cent of our enquiries at this stage — particularly for luxury beachfront real estate on the Gold Coast — is coming from interstate clients,” he said.

“Eighty to 90 per cent of my transactions over the last three to six months alone have all been from buyers either in Melbourne or in Sydney, which is just a phenomenal statistic.”

Mr Stevens said local prices represented “outstanding” value for money.

“What a million dollars here can buy you — opposed to what it would buy you in Sydney and Melbourne — is almost two for one,” he said.

“We are at all-time lows, record lows, in the volume of stock that we have to sell … we do not have enough to sell and meet the demand that is currently coming from Sydney and Melbourne.

“That’s not only on the sales division, it’s also being seen across in the rentals division as well, which as I’ve said is exploding at the same time.”

He said demand was strong for all types of properties.

“Whether it’s low, mid or high, it seems to be the same story all round — we simply just do not have enough to sell,” Mr Stevens said.

“Our vendors that we are trying to get onto the market are simply saying ‘well why would I sell, what am I going to do with the money, you know it’s not really earning anything for me in the bank’.”

Regions attract COVID-19 refugees

Russel Duncan and his partner Rick Seidel lived in Sydney for nine years, but packed up everything about five weeks ago to move to Townsville.

“We came for a vacation 12 weeks ago and that set the entire ball in motion to actually move here,” Mr Duncan said.

“The weather was fabulous, the people were amazing, real estate was brilliantly priced.

“COVID has brought quality of your life and the work-life ratio far more prominently into people’s minds — there’s certainly a big swing to moving north.”

The couple is living in a small residency attached to the back of their business that sells Christmas ornaments.

They are waiting for a particular rental to become untenanted in the new year so they can lease it, with the option of buying, after selling their Sydney home for over $1 million.

“We are out of Sydney — lock, stock and barrel,” he said.

Rents spike amid unprecedented demand

Interstate migration was also forcing up the cost of rentals.

Cairns real estate agent Nicole Craike, from the Twomey Schriber Property Group, said they were averaging around 3,000 inquiries a month — twice as many as last year.

“Fifty per cent of those people are from interstate,” she said.

Ms Craike said with a vacancy rate of around 1 per cent, supply and demand was pushing prices up by at least 10 per cent.

“Quite dramatically, and quite quickly I think, a lot of tenants are quite shocked with where rents are going throughout Cairns,” she said.

“Most of our rental properties are getting multiple applications, sight unseen.

“They are offering more than the asking price and certainly offering more rent upfront.

“We have some tenants offering to pay 12 months rent upfront and still not getting accepted with properties.”

The agency was concerned people were being forced to couch-surf or look for stop-gap accommodation.

“They are booking into hotels and a lot of our caravan parks are now full for months in advance,” she said.

Call for government action

The REIQ said governments needed to encourage the construction of new houses to keep up with demand.

“It’s important that we see local government and state government doing more to create some new housing supply so that demand can be met with adequate supply levels,” Ms Mercorella said.

She also renewed calls for stamp duty reform.

“We know that acts as a financial impost for many — it means that some of us remain in houses that are either too small or too big for us, simply because we don’t want to incur and pay significant stamp duties.”

She said she would like to see stamp duty reviewed on the whole.

“It’s well and truly overdue,” she said.

“Of course we have seen both New South Wales and Victoria more recently talking about stamp duty reform, so certainly we’d like to see stamp duty on the whole reviewed.

“But in particular, we think a great starting point is for older Australians we’d like to see stamp duty abolished, to really encourage people who may be empty nesters living in a large property, on a good-sized block of land, moving into something that is perhaps more age appropriate so that property can be freed up for perhaps a family with a number of children.”

By Emma Pollard and Lexy Hamilton-Smith (Original ABC Article)