Earlier this month, BIS Shrapnel, a well-known and respected economic forecaster, produced a report setting out their thoughts on what the Australian residential property market is likely to do over the next three years. We thought that, for those of you living in the Brisbane area, you would find their views of interest, particularly if you were either currently a property owner or considering buying your first home.
Firstly, let’s briefly summarise what their thoughts are on the residential property market nationally? Well, although there have been signs of a recovery towards the end of 2012 due to low interest rates, BIS Shrapnel are of the opinion that any upturn in the housing market is probably going to be unevenly spread. For instance, there will be some areas that have already witnessed an improvement that are likely to see this ease off, others will continue to witness a flat market and others will see an improvement although this is expected to be slow to happen.
For instance, the prospects for property in New South Wales look favourable, the Northern Territory and Western Australia’s improving figures are expected to carry on but only in the short term as there is likely to be a slow down in the property market in those states due to the weakening of economic prospects as the resources sector eases off, Queensland should improve from 2013/2014 but the remaining states/territories property market performance is expected to be watered down due to excess supply and poor economic performance.
In the nine months leading up to March 2013 an increase in lending has been evidenced with home loans being affordable to more people than at any time since the first five years of the 2000s, with the exception of 2009. The first time buyer market has been heading in the right direction with the exception of Queensland and New South Wales that saw a drop due to alterations to incentives for this sector.
Low interest rates should see increased retail spending, greater investment in business and an increase in the construction of new homes although it will take time for confidence to return to the house purchaser. If interest rates continue to fall this will help the property sector even more in the remainder of 2013 and into 2014 and 2015.
As for Brisbane, it is the view of BIS Shrapnel that the property market in the city is gradually improving as affordability becomes easier with low rates of interest. As at June 2013, the estimated media house price was 4% below its peak that took place in June 2010 that, in real terms, is 11% lower. It is also worth noting that rental prices are increasing. All these factors combined, provide the potential for an improvement in Brisbane’s property market if purchasers, including investors and first time buyers come on board before prices really start to rise. It is forecast that median house prices in Brisbane will rise, on average, by 17% in the three years leading up to 2016.
The above certainly makes for interesting reading if you are considering buying a property in Brisbane either to live in yourself or to rent out.