From the CEO: Queensland’s Property Market Remains Steadfast Post-Election
While COVID-19 has caused a lot of economic uncertainty, Queensland’s property market has remained remarkably resilient when you consider we confronted the State’s worst bushfire season late last year and we’re now in recession for the first time in 30 years. When you look at Corelogic’s latest Hedonic Home Value Index data for September 2020, Brisbane’s property market saw another moderate monthly price rise of 0.5 per cent, bringing the capital city’s annual median to 3.5%. Regionally, property markets have continued to maintain moderately healthier annual growth, the latest annual median 4.6% for September 2020.
Brisbane’s steady performance even before COVID has really been its strength, unlike Melbourne and Sydney which have experienced more pronounced fluctuations in property prices given their higher dependence on immigration, higher debt-to-income ratios and house price-to-income ratios. That’s not to suggest Brisbane is immune to any economic side effects of this pandemic, but any impact will depend on how much longer it takes to contain the virus, how deep this recession will reach and future growth rates in employment as well as consumer confidence.
Across the rest of the State, there are a variety of factors helping to support regional housing market conditions including strong demand despite any anticipated drops due to a pause in migration. Regional markets are also proving to be appealing for their relatively low density and lower price points. The normalisation of remote work through the pandemic has also made proximity to major cities less of a factor in home purchasing decisions. Interstate demand continues to strengthen in Queensland, and we anticipate this demand to surge in the coming year ahead as we navigate through to the other side of this pandemic.
While the State Government has committed to providing a range of grants and incentives to help drive Queensland’s property market, particularly via first-tome buyers, this support remains limited – restricted to new housing, units, and townhouses as well as off-the-plan or build-yourself options. To better support Queensland’s economic recovery, access to established housing is necessary to mitigate the relatively tight supply/demand balance we currently face and something we will continue to strongly advocate for.
What’s also clear is that with the RBA’s recent record low interest rate cut to 0.1% and the resilient nature of property during these turbulent times are encouraging for investor interest. However, the level of investor activity currently in Queensland is nowhere near where it needs to be. Over 36% of Queensland’s population rent and 90% of that housing is provided by private owners which is why gauging investor confidence is always important when trying to assess future property market performance.
The rental sector plays a critical role in Queensland’s housing system and the role and size of our investor market has never been so critical so it’s important to respect it. In recent times, property investors have faced potential onerous rental laws that would strip them of essential rights, to force the hand of many investors to consider selling. Any further tightening in rental availability levels, with approximately 64% of the market already below 1 percentile, will only place additional undue pressures on our housing sector which is why more needs to be done to better support both increased and ongoing property investor activity including access to a fair and balanced legislative framework around tenancy laws that provide sufficient support and protection to both tenants and property investors. This issue remains firmly on our radar and members will be kept fully informed.
Equally important is the support for growth and success of commercial property investors and business owners. While we respect and support the need for responsible COVID-19 border protections and health measures, we hope to see a balance between the needs of the community and that of the economy, with additional funding toward small to medium-size business sustainability with a range of pandemic grants committed to the support of commercial property owners along with the growth and success of small business in Queensland including tax rebates, return to office initiatives, retail sector support, and tourism and hospitality.
With Queensland likely to be the one of the better performing property markets in Australia over the next few years, technology continues to shift from being a driver of marginal efficiency to an enabler of fundamental innovation and disruption. It’s clear digital technology will transform how real estate transacts in the future, and so we look forward to continuing our work with the State Government on the transformation of the real estate industry, particularly the use of electronic signatures by corporations and individuals; the recognition of electronic contracts and approved forms by governing authorities; and, further streamlining real estate processes by permanently implementing measures that assist virtual transactions on a permanent basis extending beyond the COVID-19 pandemic.
IN THIS week’s EDITION OF THE REIQ JOURNAL:
- 6 Things to Consider as a Real Estate Professional When Natural Disasters Occur
- What Does the RBA Cash Rate Cut Mean for Queensland Property?
- Effective Cause of Sale Examined by the Courts
- 5 Times Real Estate Professionals Needed Business Insurance
- How and Why to Conduct a Competitive Analysis
- Fair Trading Compliance Operations are Underway
IN OTHER NEWS:
- The REIQ advocates on a diverse range of issues relevant to both real estate businesses and every day Queenslanders. Stay up-to-date with our latest advocacy campaigns here.
- The REIQ is pleased to announce the appointment of two new directors to its board after election results were announced at the 2020 Annual General Meeting. Read more.