Brisbane Real Estate Market Wrap (June 2018)
Hello Brisbane! Here’s a quick market wrap-up of what has happened in the Brisbane real estate market the past 6 months. We are in the middle of the year now, and I am sure you are wondering if there have been changes that are noteworthy. Let’s jump in
Rental market boom.
The last two years were all about sustainable rents coming in and good yields for investors. Our vacancy rate is well below 1.5 percent and in my opinion, that sort of dovetails into a strong purchasing environment for selling properties. There is a net migration, which is one of the key factors that is present in the marketplace right now. These usually happen due to job creations - something we've been missing in Brisbane for the last couple of years.
That's why we haven't seen the venom in the marketplace and keep seeing a rise in the market. For the last two years, tenants are coming in and moving back, and generally, when there’s a net migration, those people don't go and purchase straight away. They'll rent a property for a year and then make a decision where they'd like to purchase later. So, that's a good sign that we've got people that are creating more demand and are coming into the marketplace to purchase.
Rising market.
We’re getting a steady rise in the market. Good prices have been paid for good properties and there's actually an undersupply of well-built properties in good areas. So even a four or five square meters home is going to see big sales to about 1.3 to 1.8 million dollars if they are brand new. It’s just a matter of creating the demand of what people really want which are newer properties in newer areas.
Banking royal commissions.
There’s a banking royal commission on and it doesn't really make sense, but what is happening is that banks are looking at the financial planning sector and are creating fees for non-service. The media reports and the pundits are saying that the cost of funding could go up and they'll only pass that onto us, the people that are actually getting funding to buy a property. It's a bit of an issue that could arise, but there are other non-bank lending, non-major banks coming into the marketplace. So there are other avenues that will be available to people to raise capital and buy those houses but it’s still a little bit concerning.
Now is a good time to sell!
If you’re looking to market your property, now is a good time to do it. If you already have good offers on your home, my advice is for you to actually sell now because you never know what's going to happen in the future. There's a little bit uncertainty around what’s going to happen the market but hopefully, it doesn't happen soon. It would be a little bit unjust to say that the banks had done something wrong since we pay for it in terms of how we're going to fund our homes that we live or invest into.
Renting out versus buy and trade.
A good strategy going forward that I'd recommend to a lot of people is not to buy and trade. If you’re a first-time investor, I would always say buy it for a static rent out purpose. Don't look at trading property because you would be spending a ton on renovations or subdivision. That can be tough and headache inducing for someone who is doing it for the first time. Whereas if you’re just looking for something that's rentable, you only need to find out what it would rent for and then make it appealing for potential tenants.
Get people to submit their applications, and check what the caliber the tenant has, because remember, you're in business with that person. They're going to be paying the rent to you and they're going to be looking after your property as well, so you really need to choose wisely. There's a lot of value in finding a good tenant who looks after your property and pays on time.
That’s the wrap up for what’s happening with the marketplace right now. If you feel like you need a bit more details on how you can do property investments or anything property related, give me a call on 0402 909 727!