Buyer Interest Surges in Queensland
While property prices have been resilient, the most profound effect COVID-19 has had on our market has been a stall in transactions. In the first quarter of 2020, Queenslanders sold 11,002 houses and 4,760 units. Skip forward to the second quarter and those figures dropped to 8,525 and 2,759 respectively. That represents a decrease of 22.5 per cent in house sales and 42.0 per cent in unit sales. But while owners have hunkered down in their reluctance to sell, would-be buyers are out in force trying to find a new place to call home.
It isn’t just a case of buyers being more active relative to sellers, either. Compared with the same time last year, realestate.com.au recorded 39 per cent more buyer searches for Queensland property than at the same time last year. Rental searches are also up year-on-year by 22 per cent, correlating with the tight vacancy rates we’ve seen across Queensland.
Why have Queenslanders decided it’s time to buy?
While seller reluctance can be explained away by the pandemic and people’s apprehension to give up their COVID-free safe space (not to mention not wanting strangers trotting through their homes), understanding the huge increase in buyer activity requires more speculation. “Interest rates have moved to their lowest level on record, people can’t spend as freely as they could have in the past, and then there’s also government stimulus,” said Cameron Kusher, Executive Manager of Economic Research at REA Group. “It’s a combination of all these factors.”
As for the rise in rental searches, Kusher believes uncertainty among investors is leading to an increase in monitoring of what’s available and for how much. With the moratorium coming to an end, it’s also logical that many renters will be planning their next move, on top of those who need to downsize as a result of loss of employment. “There are a lot of good reasons to be monitoring the market at the moment,” said Kusher.
How will it affect property prices?
The problem the market is having, perhaps, is that despite all these good reasons to be buying, there aren’t many incentives to sell. Market uncertainty and increased importance on secure shelter have resulted in slumping listing and sales figures. “The biggest challenge for a seller at the moment is finding something else to buy,” Kusher explained. “We know most sellers have to buy when they sell, and there’s not a huge amount of stock on the market at the moment, so that’s probably the trepidation.”
Still, widespread buyer interest is generally a boon for the property market, and Kusher predicts positivity. “I think the market is generally going to be stronger than most people are expecting, and I do expect we’re going to see some price growth in the near future,” he said. With the HomeBuilder scheme coming to an end and international borders still expected to be closed or heavily restricted, Kusher believes the new housing sector could struggle in 2021. “But I would expect that to be addressed by the Federal Government,” he adds.
When comparing Queensland’s buyer interest with that of other states, it becomes apparent just how vital the health response was for consumer confidence. Western Australia had among the strictest border protection policies – second only to Tasmania. There, the annual increase in buyer searches was 45 per cent. Meanwhile in Victoria, where over 20,000 cases were recorded, buyer activity is up just nine per cent on the previous year.
“The fact Queensland’s managed COVID quite well has definitely helped things here,” said Kusher. “And don’t underestimate the impact of JobKeeper and JobSeeker as well; they’ve helped us avoid a higher unemployment rate which has probably meant confidence in the property market hasn’t slumped by the magnitude we might have expected.”
With Queensland’s economy poised and ready to mount a determined comeback, swelling interest from buyers could potentially carry the State’s property market towards a significant upswing.