The month in review: Brisbane
By Herron Todd White
June, 2010
Well Brisbane is undergoing a reactionary real estate
market akin to the swings and roundabouts usually
reserved for the stock exchange. We in the Brisbane
market have become heavily press driven. In this sort
of environment it is sometimes difficult to pick who has
the dollars and is driving demand – so let’s take a level
headed big picture look and see if we can gaze beyond
the hype.
A recent set of numbers shows that the Brisbane auction
clearance rate is down about 50% compared to the
same week last year. It has raised the eyebrows of some
observers and, as stated, the recent rate rise does make
the populace jumpy. Our valuers have confirmed that
they are seeing far less first home buyer activity across
the board and that many investors are a touch toey… but it’s also fair to say Brisbane has overall had a nice
steady market performance in comparison to many other
capitals this year.
One big area of oversupply is the unit market on the
Redcliffe Peninsula. Most of these properties were sold
to out of town investors – (many still are actually and we
would encourage any investors to seriously think about
calling our office before they commit to a purchase) – and
plenty of resale attempts are coming home to roost. Local
buyers won’t touch them unless they are cheap as chips
and local agents would be more than pleased to see a
cashed up purchaser come through the door. The same
can’t be said about mid priced property in the area where owner occupiers in the $500,000 to $700,000 are driving
the market to perform well. The first home buyers here
are generally nowhere to be seen with almost all heading
to North Lakes and getting some new stock on small lots
for under $330,000.
Outer established suburbs such as Strathpine have also
been media reactionary and agents there say that first
home owners are very rare whilst investors are shy of any
rate rises. Enquiry is down but the lower end properties
still have a floor price that has not drifted south.
In the city, first home owners are again missing in action
but there are no investors coming in to pick up the slack.
The bright patch appears to be the high end stuff and
according to our man on the ground, it is here that the
buyer profile demonstrates how our city has come of age.
In a recent example a new multi million dollar per unit
project has seen just short of half the stock sold. The silver
lining is that not too long ago, the buyers would have
been mostly out of towners looking to relocate to the
Sunshine State. Not so now as our own retirees find the
dollars to lay down a couple of million on their weekday
city pad with enough change left over to spend on the
weekender at the coast… nice if you can get it!
The one constant is the prestige sector in the good
areas within 5 km of the CBD. These buyers seem to be
unaffected by rate rises and homes continue to trade well.
Cheap properties sell quickly and the floor price has risen
throughout the year so far. Our valuer does think that
there are signs this sector will slow in the medium term
so vendors must be cautious not to overprice because
2nd and 3rd homebuyers will be gun-shy, but long term
prospects always look good.
So compared to 2008? Well in a nutshell there are some
similarities although they are somewhat reversed. It is
now the first home buyers that have gone missing whilst
investors are a bit slow to pick up the slack.
Finally for some tales from the road. Actual conversation:
Agent and valuer standing outside recently purchased
home – sold approximately $1,600,000
Valuer: “Beautiful home… what sort of buyer did you
find for this?”
Agent: “First home buyer”
Valuer: “First home buyer?!? How the hell will they get
finance?!?”
Agent: “Oh they should be right… they have $1,000,000
deposit…”
True story – God Bless capitalism!
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