Turn Data into Your Business Advantage…
As producers of the State’s most comprehensive property data and analysis, the REIQ’s quarterly Queensland Market Monitor (QMM) remains the industry’s number one publication that ensures members are armed with the very latest facts and figures to their advantage.
Whether you’re in the real estate profession, an astute investor or a potential home buyer, the QMM is an invaluable asset for market insights and trends, enabling you to conduct valuable comparisons among regions and market segments, while keeping you completely informed of all the latest prices and price movements around the State.
With the June 2020 issue of the QMM launched last Friday, what did the latest issue highlight? It shows that Queensland’s residential property market continues to show strong and relatively stable results for the first three-monthly quarter (1 January 2020 – 31 March 2020), with regional markets leading the charge. The State’s capital, which achieved the highest number of annual sales, saw modest price increases in the housing sector across most suburbs in the greater area over the three months, with Brisbane holding firm with an annual media house price of $690,000 (+1.5%). Liveability, affordability and economic investment all suggest that Brisbane remains Australia’s leading capital city where you can confidently buy an affordable home.
“Queensland certainly offers a mixed bag of results across this quarter which was anticipated. Yet every region has performed better than expected to date and continue to do so,” says Antonia Mercorella, CEO of the Real Estate Institute of Queensland (REIQ). “This despite major banks, research firms and media naysayers collectively predicting ‘worse case’ property price declines from the onset of COVID-19 – forecasting falls from anywhere between 20-40%.”
The best performer for annual median house price growth for a second consecutive quarter was Mackay, with a rise of 6.2% to $360,000. Mackay’s housing market has been in recovery for over five years, with its median house price recuperating from significant falls. However, it continues to inch closer to its top median price of $390,000 recorded in December 2014 (-7.7%).
“In 2019 Mackay experienced a very positive year of growth, not only in relation to property but for the local economy as well,” explains Ms. Mercorella. “A dynamic resources sector coupled with large infrastructure projects saw a boost in employment opportunities and population growth throughout the year. That momentum gained over the last year or two has certainly continued into the first three months of 2020 and is a great result for Mackay.”
The Sunshine Coast property market continued to remain one of the prime spots in Australia for investment. With a local economy that’s remained relatively buoyant backed by strong population and job growth along with ample investment in large infrastructure projects, the Sunshine Coast housing market remained on a steady growth trajectory over the first quarter of 2020, achieving 2.5% growth for the year.
“Noosa has clearly seen the biggest market gains in the greater region when you consider its ushered in a record median house price of $800,000 on the back of five-year’s growth of 44.1%, making it the most expensive housing market in Queensland,” says Ms. Mercorella. “And it should come as no surprise that Noosa also had the most expensive units in the State as well, which climbed 8.7% to a median price of $625,000 over the last 12 months.”
From the outset, 2020 was looking promising for the Brisbane market too. CoreLogic’s monthly house price index showed the pace of growth slowed nationally to 0.9% in January, but the annual growth rate was 4.1%, the fastest pace of growth in three years. Brisbane house prices increased by 0.5% in January 2020. February saw house prices continue to rise across every capital city by 1.1% nationally, except Darwin. Five capital cities achieved record-high property values including Brisbane which saw an increase of 0.6%, in line with the national trend for positive property price growth since June 2019. Brisbane’s upper quartile values were 2.2% higher than the prior 12 months compared with the lower quartile, which increased by 1.3%.
March 2020 saw the initial impacts of coronavirus start to trickle through to house prices, but it was still early days with price rises across most capital cities still driving national dwelling prices up 0.7%. However, March was also the lowest monthly gain since the property market lifted in July last year – Brisbane rose 0.6% to a monthly median of $506,553. This weakening in the growth trend in the second half of the month also ushered in a period of ‘unprecedented uncertainty’ as crowd limits and social distancing policies took hold.
“It’s pleasing to see that the Brisbane property market continues to show underlying strength in the first three months of 2020,” says Ms. Mercorella. “Understandably, the COVID-19 pandemic is still creating uncertainty. As we continue to navigate through to the other side, Brisbane is likely to be the one of the best performing property markets over the next few years – particularly in light of its stability through trading restrictions and lockdowns as real estate continued to transact on the back of the Federal Government’s economic reforms.
“Historically, Queensland’s property market has shown strong resilience during times of economic turbulence. During the GFC, prices strengthened over the medium-term in many locations, courtesy of economic stimulus as well as low interest rates. Likewise, after the last recession and subsequent natural disasters, prices continued to firm over time, even with high unemployment,” continues Ms. Mercorella. “The illiquid nature of property as well as the proclivity for property owners and investors to hold for the long-term means this asset class can withstand short-term financial upheavals better than most, which is likely to be the situation following the coronavirus pandemic as well. There is a reason why the adage ‘as safe as houses’ has been around for so long.”
Five ways to make the QMM work for you
1. Median price & rent: Everyone knows sellers think their home’s worth more than it is. When you’ve lived in and loved a home for a decade, it’s a lot easier to see past its faults and focus on its sentimental value. Then when an agent shows up and tells them it’s worth $50,000 less than they hoped, it’s a hard pill to swallow. Being able to back that figure up with data is vital for both credibility and keeping emotions out of the equation. Queue the QMM’s quarterly median prices and annual trends. It goes into specifics on housing type and size as well as provides a breakdown of every region in Queensland right down to the postcode. Show this data to your vendors when they question at your proposals to bring their head out of the clouds and let them see their home from a more objective viewpoint.
In the same vein, landlords might want to set rents based on their own budget and mortgage repayments, but to fill a vacancy you need to meet the market. Median rent data lets you bring facts and figures to the table, making it easier to cut through bias and pride and set a realistic, competitive rent. Laura Valenti, Principal at Solutions Property Management, does exactly that. “It’s always good to keep looking at the current figures to make sure you’re going in the right direction,” she says. “If we’ve been getting a certain amount for a property and we know others are getting $5-10 more, then we’d be telling the owner we can go a bit higher for them.”
2. Vacancy rates: Vacancy rates offer the perfect opportunity to benchmark your property management success against everyone else in your area. For Valenti, vacancy rates are the most crucial part of the QMM. “They’re really important for us because we need to know what we’re doing is meeting, if not exceeding, the market,” she explains. Valenti then leverages that data in her marketing material. “We can say, ‘We’re pleased to say our owners are enjoying vacancy rates much lower than average!’” she adds. “We use that a lot in our benchmarking and we like to shout about it!”
3. Days on market: While experienced agents know competitively priced properties don’t sell overnight, plenty of vendors start worrying when two weeks have passed and no offers have come in. Rockpool Real Estate’s Tara Wallis uses data to reassure them that their concerns are unjustified. “I love days on market data,” she shares. “It’s really important, particularly if you have property that’s sitting there for a little while and you’ve got a nervous seller – you can demonstrate the average days on market to put their mind at ease.”
Knowing the average days on market in an area is also useful for planning marketing campaigns. If you know how long homes in your suburb typically sit on the market, it’s easier to plan and budget accordingly. A bigger days on market figure is going to require a longer, more robust marketing strategy – and while vendors might be reluctant to commit too much money, you can justify your plan with the QMM’s data. Days on market is a good benchmarking tool, too. By aiming for and achieving shorter days on market than your area’s average means you’re performing better than the competition. As Laura Valenti says, that’s something worth shouting about.
4. Marketing material: Speaking of shouting about success, marketing material should include all your achievements. Telling vendors about your own vacancy rates and days on market won’t mean much to them, however, unless you can compare it to market averages. A 1% vacancy rate sounds nice, but it sounds a lot better when compared to your region’s average of 2.5%. Similarly, if your track record shows your houses are on the market for less time than your competitors, that translates to a shorter campaign and less money spent on marketing. Put simply, more money in your vendor’s pocket.
5. Credibility and curiosity: It’s an unfortunate fact that real estate agents suffer from a poor public perception. As a result, vendors aren’t likely to take bold claims at face value. But what nobody can argue with is raw data. It’s one thing to say you’ve got your finger on the pulse of the property market, but entirely another to back that up with the most recent and in-depth figures and analysis. “It adds depth when I’m talking to vendors about the property market,” says Wallis. “It gives me facts and real-time data that I use to give them a good concept of what’s going on. It’s good information to have on hand, and also to back up anything you’re trying to explain to them.”
Moreover, for those who both need and want to be in the know, it’s a peerless overview and analysis. “I use it to see if there are suburbs that are performing better than others, or have changed their performance, and why,” continues Wallis. “I like to compare how suburbs change, and I like to see how they compare with my area.”
If you’re not using the REIQ’s Queensland Market Monitor – or worse, not receiving it, your competitors are leveraging data to get ahead of you. To benefit from the latest insights unavailable anywhere else, order your copy of the latest QMM today (REIQ membership entitles free access) or subscribe to receive all future QMMs here.