Momentum in the market: Brisbane & Qld

Queensland's property market gains momentum as the winter blues are dusted away, recording an increase for the fourth consecutive quarter.

Property in Queensland is selling like hotcakes compared to this time last year and house sales alone have increased by 40% in the last 12 months. In Brisbane it's even slightly higher with a 44% rise in sales volumes for houses.

The June quarter, in particular, has shown an at times steep increase in houses being sold, with a strong 32% increase in the June quarter alone in Brisbane. It seems like the winter blues didn't even hit Brisbane!

"The June quarter historically yields the lowest numbers of residential sales activity during the year but this data shows house sales are notably much higher compared to the same three months in 2012," explained REIQ's CEO Anton Kardash.

CBD snapshot: buyers busy, sellers hiding

Brisbane CBD apartments are no exception either, recording strong increases in number of sales. For example, two of our CBD apartments, freshly listed, were signed up by buyers within 2 and 3 days respectively! Investors are very active at present,  making advantage of the record low interest rates to secure prime CBD real estate. However, owner occupiers are also not sitting on the hands as enquiries here are also increasing.

The sellers, on the other hand, are sitting on their hands. A current real lack of quality CBD properties on the market is creating a certain amount of argy-bargy in the marketplace. I'd recommend sellers should 'do their homework' and make independent enquiries regarding property valuations before signing up with an agent at present.

Why aren't CBD sellers selling?

There appear to be three main reasons I'm hearing at present:

1. Returns are solid and good.

As many sellers enjoy a good income stream through their property - compared to some current insecurities about sharemarkets - they have no real 'need' to sell at present. 'When you're on a good thing, stick to it' mentality abounds at the moment within CBD seller circles.

2. Prices improving but not reaching boom-time heights

After boom years of capital growth until the GFC hit, and then the doldrums until last year, some sellers are wanting to 'make up for lost years' in terms of price. This is unfortunately not the reality of how the marketplace and property prices work. Buyers are definitely in force but they have done their research too - they know what prices are realistic and which aren't and they will make offers accordingly.

With spring starting we anticipate an even stronger buyer market which should translate into a tangible incentive for certain sellers.

3. Consumer sentiment up but business sentiment down

Major consumer indexes, such as the Westpac-Melbourne Institute, show a continuing rise in consumer sentiment regarding buying property. It's perceived as a good time to buy - which should normally be great news for potential sellers. However, in the months' lead-up to the Federal Election business sentiment has gone the opposite way. Let's face it, everyone - especially small to medium business owners - are counting the hours and minutes until the Election so that stability and renewed increase in business confidence can return to the economy. This lack of business sentiment has also filtered down to some sellers who have adopted a 'wait and see' approach.

What lies ahead?

Anton Kardash is optimistic: "The September quarter and the upcoming spring selling season is typically a great period for the Queensland real estate market. And with such good price and sales results for the June quarter, as well as historically low interest rates, it's shaping up to be another strong period as our market continues to build momentum.

"No doubt the influence of historically low interest rates and increased perceptions of housing affordability have seen more people move off the sidelines and back into the property market of late."

Solid, tangible growth is forecast short and long-term for the Brisbane CBD and I feel this will be a real driver within the marketplace now spring has hit.

In addition, the weekend's elections should reignite the marketplace somewhat as certainty returns to the country and - most importantly - that the newly elected Federal Government gets back to the work of governing the country and taking control of the economy.


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