Real estate in Queensland is hot right now! It’s not just the traditionally sought after markets of Brisbane, The Gold Coast and Sunshine Coast either. Many of the regional areas are having substantial growth at the moment.
When looking at the heat in the New Property Market, the traditional measures such as auction clearance rates, median house price, and days on the market are not as applicable. To understand how the New Property Market is trending and overall real estate in Queensland, you need to have an intimate understanding of developer sales rates, stock levels, land market supply etc.
New Real Estate in Queensland – Market Heat
As we work with builders and developers across Australia, we can see first-hand when the new property market is beginning to increase. Some of the crucial factors that we notice in a hot market are as follows:
- Land sales start to increase
- Developer stock decreases
- Land and new homes sell quicker
- Inquiry rates increase
- Prices begin to increase
What has caused this market increase
You would be right in questioning why there has been an increase in the real estate market when factors such as Covid-19 should have had an opposite effect.
A significant factor that dramatically affected prices was the Australian Federal Government’s Home Builder Grant. This grant of up to $25,000 offered individuals or couples a grant towards building or buying a new home or substantially renovating an existing home they own and occupy. When combined with the State Government First Home Owner’s Grant and other area-specific grants, some first home buyers received $45,000 towards their first home.
These incentives led to thousands of first-time homebuyers purchasing new blocks of land to build homes or buy new apartments or townhouses. This created a lot of heat in the marketplace a created a FOMO (Fear Of Missing Out) effect.
Interstate Migration – A key factor causing growth in Real Estate in Queensland
When Covid hit the two major cities of Melbourne and Sydney, thousands of people began to look for other options. Moving out of the cities became a good option, and Queensland, with its low Covid rates (at the time), became a popular choice. This interstate migration combined with other favourable factors has put considerable demand-side pressure on the real estate market. As a result, it has led to a surge in real estate in Queensland.
Are you working from home – The new norm?
When Covid-19 began to take hold across the world, companies had to develop creative new ways to keep their staff safe. This meant that social distancing was necessary, and businesses had to create ways to allow their team to work from home where possible.
Working from home required staff members to embrace new technology applications such as Zoom, Microsoft team, google meetings etc.
As staff began to work from home, they realised that they didn’t necessarily need to live as close to their place of work as they used to. This meant for many people that they could move outside their city homes and into rural areas. This became quite attractive as they could purchase larger houses for comparatively lower prices in the regions that were not as susceptible to the spread of Covid-19 as what the city environment was.
This has put inflationary pressure on the regional property markets and led to increases in prices and Capital Growth across many areas.
FOMO The Fear Of Missing Out – Driving Real Estate in Queensland
Whilst FOMO may just seem like an acronym used by a different generation to yours. However, it is a significant factor in increases in the real estate market. When the crowds start to purchase homes, and the real estate market starts to increase, people who intend to buy a property at some stage down the track get forced to act quickly or avoid paying a higher price – and no one likes to spend more than they have to. Real estate in Queensland has gained in recent times due to the fear of missing out.
On the supply side of things, as people start to see higher prices reached for properties around them, people who weren’t considering selling their properties begin to re-evaluate their options of a high amount. The temptation of very high selling prices is often too much for people, and more houses start to come onto the market.
As these people are often only selling because of the opportunity to get a very high price, they won’t accept low offers. This means that you have more stock coming onto the market with vendors who will only take high prices, which in turn begins to drive the median sales prices up further. These folks don’t need to sell and are only after high prices. This is the opposite effect of what happens when people are forced to sell.
If you are looking to keep up to date with what is happening in the real estate market in Queensland, some great articles can be found here.
The Homebuyer market has turned into an investor market
The real estate boom in South East Queensland and across Australia started as a home buyer boom; it is now seeing investors come into the market in droves.
Although the Federal Government grants have now dried up, there have been so many investors coming into the market to take up the slack. This has meant that the market has continued to gain momentum despite fewer first home buyers and homeowners.
Increasing rents, low vacancy rates, and low interest rates
As more people have moved into the SEQ area, putting significant pressure on real estate in Queensland, this has led to historically low vacancy rates across rural, regional, and urban areas. As the vacancy rates go down and the demand for rental properties increases, the rents start to increase. This leads to higher yields for people that have existing properties. The increasing rents, low vacancy rates and historically low interest rates have lead to a perfect environment for property investors, and Queensland is seeing some serious growth out of it. If you are looking to increase the yield of your property further, then look at some of the creative property types that we provide.
As always, if we can assist you any further with this, or if you have any other property related questions, please feel free to send us an inquiry below or contact us here.
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