Why the Queensland Property Market Didn’t Crash in 2020
Even a global pandemic couldn’t defeat Queensland’s housing market, with 2020 ending on a surprisingly upbeat note for the industry. Despite the doom and gloom of COVID-19 and the first recession in nearly three decades, the state’s property values are steadily rising. Some markets across Queensland have reached record median highs, and first-home buyer numbers are growing as inventory levels remain low. Why and how has this happened?
Property Crash That Never Happened
According to CoreLogic Head of Research, Eliza Owen, general consensus at the onset of COVID-19 was for a 10 per cent decline in national property values. Instead, Australia has seen only a “mild downturn” in these figures. From March, national home values dropped by just 1.7 per cent before moving back into positive territory, with 0.4 per cent growth more recently recorded in October. In Brisbane, values jumped even higher, with respective increases of 0.7 per cent over the September quarter, and a new median value of $720,000.
Meanwhile, Queensland’s country towns led the rise in national regional values over the past three months, posting a 3.2 per cent lift during this period while enjoying increases of 0.5 per cent and 1.1 per cent in October and November. CoreLogic Head of Research, Tim Lawless, says if such growth persists, the national home value index could surpass pre-COVID levels in early 2021.
Real Estate Stability Reasons
The Real Estate Institute of Queensland (REIQ) Chief Executive Officer, Antonia Mercorella, highlights several reasons for this year’s unexpected stability.
“Record low interest rates, significant policy support and loan repayment holidays for distressed borrowers, coupled with an earlier reopening of the economy and our state’s borders, all ensured the various worst-case scenarios of 20 – 30 per cent price falls that some economists predicted were never likely,” she says.
Mercorella adds that a wide range of monetary and fiscal policies rolled out by the federal and state governments further insulated Queensland’s property market.
Property Moves Onwards and Upwards
Lawless explains Australia’s property market will continue to enjoy further improvements in the new year. Indicators pointing to this positivity include: low inventory levels; favouring sellers over buyers; the number of settled sales holding “reasonably firm” since July; strengthening auction markets which are expected to rise even further in the first fortnight of December; and tightening private treaty measures, which are in turn “reflecting a market that is rebalancing towards vendors over buyers.
“Improving economic conditions and containment of the virus has lifted consumer spirits to higher than pre-COVID-19 levels,” concludes Lawless.