Brisbane & Sunshine Coast Property Market Snapshot During Covid 19 March to May 2020 ASSUMPTION OR REALITY?

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Brisbane & Sunshine Coast Property Market

It has been 5 decades since I (Sue Scott from Scott Properties Group) studied Economics & Finance in London and during those 50 years I have seen and worked through many financial challenges around the world.  I don’t need to go into them as it is history.  However, history does have a habit of repeating itself.

The point to remember today is that this current World Financial Crisis is probably the most unexpected and unprecedented due to the closure of the world through a Virus and not originally economically driven as in the more recent past.

Whilst economists have been predicting for some time that there was going to be an economic world downturn no one could have envisaged how this current situation would develop so quickly and so aggressively. Unless you go back in time to the Black Plague of the 1300’s where it was reported, without any real statistics, that between 75-200 Million people lost their lives and the world was on its knees and the Spanish Flu Pandemic of 1918 where 500 Million people worldwide died, it is understandable that this current pandemic has caused such severe restrictions to the population throughout the world with the hope of containment.

Thankfully, with today’s medical and economic modelling there is a chance that we can limit this pandemic and can be as best prepared as possible for what looks like an inevitable world recession.  However, the original scaremongering predictions of a few months ago relating to Australia, that there was going to be huge loss of life has mercifully not happened.  There is always talk of a second phase, but Australia seems to have got this pandemic under control early compared to UK, Europe & USA.  For those who maybe reading this that have lost loved ones and friends to this pandemic, it is more real to you than those of us that have not been personally hit by such losses, and for that we feel for you.

We are currently being flooded with media projections and often scaremongering. One of the most prominent subjects, as always during financial uncertainty, is the

AUSTRALIAN PROPERTY MARKET”!  Doom & Gloom seems to be the order of the day but let’s not forget……….

AUSTRALIA IS A BIG COUNTRY…

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Each State and region of this amazing country has different property trends. It is not a “one size fits all” scenario.  You only have to look at Sydney, Melbourne & Brisbane to see the disparity.

It is human nature to be weary especially where finances are concerned. For some regardless of the economic situation they can ride the storm, but for the majority of the country, people still yearn to have the Aussie Dream of owning a home of their own and want to make good property investment choices.

Our focus in this article is to consider what is happening in Brisbane and the Sunshine Coast, as this is where Simon & I have worked on the ground buying property for ourselves and on behalf of our clients, for several years.

First of all, let’s look at BrisbaneThe River City!

Within the City and suburbs there are several pockets of high valued property, many socioeconomic areas where property prices are variable, and this is being blanketed into ONE area.  This is just stupid! Each area has its own housing trends to be considered. These trends are often based on new infrastructure, immigration projections, schools, job availability, location preference and more.  So how can anyone justify the comment that Brisbane will see a downturn across the board?

The simple answer is YOU CAN’T MAKE THIS ASSUMPTION!   With low stock levels which started in 2019 and still high buyer demand, it could be argued that prices could even edge up as few % points.

Brisbane has always been a bit of a quieter relation to Sydney & Melbourne but that has been changing rapidly for a few years.  So why has this happened? There are many factors including employment opportunities and the other great driver has seen people wanting to cash in on their high priced property in Sydney & Melbourne and actually preferring to live in the beautiful river city, where they can get better or equivalent properties for less bucks, potentially have more money in their pockets and have a similar lifestyle without the hordes of people.

The investor market is still strong and the consensus from ourselves and other professionals working in the Brisbane property market, is that although there is low stock, there are more off-market opportunities that as Buyers Agents we are being offered and tapping into for our clients.

Another consideration is the expansion of Brisbane Airport with a longer runway catering for more International Flights……just not sure when at the moment! However, this will open up the city for good selling and buying opportunities once more confidence comes back into the vendor market, thereby increasing stock levels.

So, are prices in Queensland’s capital city going to decline?  If only we all had a crystal ball under our desks!  Reality is that there have already been slight adjustments to pricing, and I mean slight, and not in every location, so once again “one size does not fit all”.  Having our finger on the pulse studying price variances to see where the best locations for home ownership and investments are tracking, is key to working strategically.

Encouraging for Investors is that Rental Rates do not seem to have reduced giving good positive gearing. We have seen during the last few months, that vendors are prepared to negotiate at prices that reflect immediate equity for investment buyers looking for good yields, who are able to settle quickly with pre-approved finance, therefore paving the way for vendors to move on into the next stage of their property buying journey.

On talking to property managers they are seeing already that the rental market may become more prominent post Covid with people deciding to sell and capitalise on their accumulated property wealth and rent until they can see where they fit into a specific market.  The beauty of owning property is that it gives you choices and freedom to make those choices.

We are living through a moveable feast in real estate at the moment and things may change, but indications are that the huge report of 30% decline in property values is not valid and some may say it borders on scaremongering.  I want to ask you all one question relative to this statement.  “IF LENDERS BELIEVED THAT PROPERTY WAS LIKELY TO DECLINE AT SUCH A HIGH PERCENTAGE, WHY ARE THEY STILL LENDING”? There business is to make money not lose it!

Negotiation is always part of a buying process and nothing about that will ever change!  We have personally purchased 2 high yielding investment properties in the western suburbs of Brisbane during the last couple of weeks one returning 10% gross yield and the other 6.5% gross yield, and both were negotiated with good % reductions from original market pricing. 1 was off market the other was on market. So, there are good opportunities to be had.

Now, let’s look at the Sunshine Coast.

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People from interstate and overseas see the Sunny Coast as their dream destination.  For those who know the coast, as we do as residents, we are living the dream on a daily basis that others strive to achieve.

It is often though that the Sunshine Coast is either Caloundra, Mooloolaba, or Noosa.  All of which offer amazing properties for both the homeowner and investor.  However, areas in between these beautiful areas have also grown in popularity as have the beautiful Hinterland towns especially for those looking for acreage and lifestyle properties.

First home buyers have benefited from new developments creating new communities with their own shopping precincts and schools with the opportunity to purchase value for money housing.

The new infrastructure around Maroochydore and the runway expansion at Sunshine Coast Airport is another great drawcard for International Flights….., who knows when that will start up again, but feel sure it will be a priority once things become more settled and hopefully with borders opening within Australia and New Zealand to start with, then eventually, international travel will follow.

So, are the prices on the Sunshine Coast going to decline? Currently there is no evidence of this.  Properties throughout the price ranges, and again with low stock, are very much high on peoples purchasing radar.  Again, like Brisbane, Coast agents are offering us good off-market listings and there are potentially more off-market properties that will become available for several months to come.  We are hearing from interstate, overseas and local buyers not deterred by Covid, and are taking it in their stride as just another property phase to go through, and for most purchasing sooner rather than later is their buying strategy.

Why are more off-market properties becoming available?  The main reason, and not just through Covid, is that vendors are seriously wanting to sell but are wanting to make sure that they are going to get qualified buyers through the door rather than having their property on market with all that goes with that, such as high advertising costs and open homes.  Not everyone feels comfortable having their homes invaded on a Saturday often with tyre kickers, so keeping their properties off-market is very appealing knowing that people viewing their homes are serious buyers. There are also other factors that come into this equation on a more personal level that allow people to sell their properties quietly and feel more confident in doing so.

Let’s not forget that property buying is not a 5-minute journey. Statistics say that on average a person takes over 200 hours and 6 months to buy a property, whereas on average we take less hours (as we already know our specialist markets) and on average 28 to 35 days to source a suitable property in budget and location.  The reason is that clients are giving us a definitive brief to work from taking into consideration their needs and wants as regards schooling, sports and community activities, retail outlets, restaurants etc and commuting times.  There has been a higher level of enquiry with people looking at buying property that can now accommodate “work from home” facilities not only for home ownership but also investors looking at this scenario for potential tenants who are now changing their work habits.

One thing to remember is that once you are on the property ladder you will be selling and buying in the same market conditions regardless if you are looking for a new home or an investment property. Traditionally housing markets ebb and flow and should be regarded as a long-term investment.

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Think about one huge factor if you currently rent.  With the lowest interest rates ever seen and incentives to help First Time Buyers, on average it is far cheaper to buy than to rent thereby getting you on that property ladder. This in turn means people can place themselves in a position to control their financial future and in time using equity in that first property to start an investment portfolio or moving up the property ladder.  The earlier you start the more opportunity you will have to acquire passive income and not be totally reliant in retirement on a pension.

Remember! it costs nothing to talk to Mortgage Brokers or Financial Institutions to see how you can achieve your goals and with so much resting on the continued sustainability of the housing market, this could be one of the best times to get good advice and to think about how property buying could be in reach NOW!

There is far more in buying property than the average buyer realises. This is where, as Buyers Agents, we are 100% on the buyers’ side and are 100% Independent with no allegiance to any particular agents. For our clients, this levels the playing field with vendors represented by their agents, which in turn means that negotiations are handled between real estate professionals.  The result is that buyers not only get the best negotiated purchase price but also the best terms and conditions of sale.

We hope that this has given you a snapshot of what is happening in Brisbane & the Sunshine Coast.  We wish you well through the coming months and we will continue to update you of any changes that we can see coming in our neck of the woods.

We love to talk all things property and if you would like a FREE 45 Minute Strategy Meeting by Zoom or phone then please call us on 0405432015

or email info@scottpropertiesgroup.com.au

or click the calendar below to book a time that suits you.

https://calendly.com/scottpropertiesgroup/free-consultation?month=2020-02

 

Disclaimer

Real Estate Advice

Scott Properties Group inclusive of all employees takes no responsibility for the accuracy of any contract of sale and/ or vendors statement and recommends clients seek their own independent legal and financial advice appropriate for their personal situation.

Scott Properties Group advise that all information provided is general in nature and subject to the inherent volatility of the real estate market. The Agents advice does not form legal advice, town planning, building, renovation, architectural or other professional advice. The client must rely upon their own inquiries of any statutory authorities (Council, sewerage, water, environmental) to establish the quality or suitability of the property for their purposes

Scott Properties Group will give No Legal, Financial, Investment & Taxation Advice

At all times the decision to buy or not to buy is yours. We will advise as to our view as to the pros and cons of properties identified by us as falling within your need’s analysis. The information provided is relevant to the current property market as at the date of the recommendation and warranties cannot be given as to the future value of the property.

 

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