The Queensland property market has maintained resilience in spite of the pandemic, and now goes into the new year with an abundance of growth potential, according to a number of experts.
In comparison with other states, most of Queensland has remained in a strong position over the past 12 months.
Brisbane, for instance, has seen demand for property rise due to interstate migration, the broad range of stimulus measures and positive changes to market sentiment.
According to Streamline Property Buyers’ managing director, Melinda Jennison: “Economic conditions are improving with the virus containment, and it has never been cheaper to borrow money.”
“While we are seeing buyer numbers rise, we are also seeing stock remain low.”
The tight levels of inventory, along with the rising number of buyers, create an urgency among buyers and ultimately adds to the upward pressure on prices, she said.
Backing up this sentiment, Apollo Auctions director Justin Nickerson said that all signs and indications point to Brisbane maintaining its strong finish in 2020 through to 2021.
However, it may not be at such a grand level as was witnessed by the capital city late this year.
“There’s the impact of the expiry of JobKeeper/JobSeeker and the mortgage deferrals. Has the pain just been pushed down the line, or were the initiatives successful in providing assistance at the time when required, for the right length of time?” he queried.
“How will investors feel about the market next year? We have already noticed a dip in investor interest to close off 2020. In many cases, the market has been performing too strongly for investors to get involved. Do they return with confidence in 2021?” Mr Nickerson noted.
According to Ms Jennison, while the withdrawal of fiscal stimulus will mean less federal support, it’s a positive sign for the property market that housing loan deferrals have also been falling over the past two months.
This trend is expected to continue, thus minimising risk of forced selling due to inability to make repayments.
Image Property’s director of sales, Adam Empringham, said that, moving forward, lenders will play a big role in the continued growth of the market.
He believes the continued appetite of lenders to help people rather than hinder them through COVID has set a new precedent.
“They decided to look at things long-term rather than short- term, so as long as they still play the game – plus the cost of money is as cheap as it’s ever been – that’s going to put the marketplace in good stead too.”
So, in a market that is looking upward, what are some of the top predictions for the Queensland market come 2021?
1. Lifestyle properties
Mr Empringham said that lifestyle properties, including those with water views, those that are semi-rural or on acreage, will continue to be in strong demand next year, particularly in Brisbane and on theCoast.
“Lifestyle properties are really fashionable now and definitely on trend. The lifestyle market is also being driven by the interstate market through the fact that it’s very, very good value for money by comparison.
“Marketplaces on the outskirts of cities are also going to be ones to watch, so areas like Brisbane’s bayside suburbs where water comes into play, [or] where semi-rural comes into play. Those sort of market sectors are certainly going to be set for growth and that’s driven by the fact not everybody has to go into the office any more,” he noted.
With property buyers starting to value space again, Ms Jennison expects an exodus from higher-density living and the increase in demand for single homes on their own lots, even if they are far away from the CBD, to continue into 2021.
“The work-from-home effect may have some further relevance in the future, especially in the style of housing we choose, especially if this trend is adopted as a more common way of working,” she added.
2. Unit and townhouse markets
Further out into the suburbs, the unit and townhouse market is also likely to see growth in 2021, with affordability playing a major role, according to Mr Empringham.
“The purchase price of attached housing is now below its construction/replacement cost. This market sector has finally hit the bottom of the cycle, and I think there have been a lot of lessons learned in South East Queensland over the past five to 10 years in relation to attached housing.”
3. Established properties
Established properties can also expect to see strong demand next year, particularly from first home buyers, Ms Jennison said.
“Established properties are also seeing strong demand from first home buyers in price points up to the mid $500,000 and we expect this to continue, driven by low interest rates and the fact that it is often cheaper to own a home than to rent in many areas throughout Greater Brisbane.”
4. Buying activity
First home buyer activity will contribute to the growth of Queensland in 2021 as it continues to be strong off the back of federal stimulus in the sub-$500,000 price point, especially with land sales spiking throughout South East Queensland in recent months, Ms Jennison said.
The advent of technology and new ways of operating means more people will also be open to buying homes sight unseen, according to Mr Nickerson, who said that while these were previously just an anomaly, or things that happened to friends of friends, ”now it has become mainstream and a viable way of buying a property for those who can’t physically access them”.
Investment activity is also rapidly picking up in Brisbane, particularly in price points up to the mid $700,000, largely driven by the attractive yields that Brisbane can offer as well as record-low interest rates, Ms Jennison said.
“Investors are also being spurred on by the more positive sentiment driven by price force adjustments for many of the big banks and economists,” she added.
Ultimately, the consistency in buying activity will lead to continuous decline in vacancy rates in the housing sector, and put upward pressure on rents as tenants often must pay more to secure a property, Ms Jennison explained.
5. Queensland’s ‘sweet spot’
For those looking for the next Queensland hotspots, Mr Nickerson pointed to Brisbane’s outer inner-ring as the “sweet spot”.
According to him: “That has always been the sweet spot for Brisbane – suburbs that are three to five kilometres the CBD – traditionally with good schooling and lifestyle options. These suburbs have grown steadily across the past four years.”