BY BYRON FREEBORN, RAINE & HORNE WYNNUM MANLY
As winter follows summer, human behaviour tends to follow similar cycles. But what cycles, in particular, affect the property market? I don’t hold qualifications in psychology or economics – all I can say is after a decade of selling properties, you get to see both first-hand. However, we are usually amongst the trees, so to help zoom out a little to see the forest, I’ve collaborated with Stacey Beaumont (Phd Business). And yes, we have a limited word count – so it will be in a nutshell!
The HTW (Herron Todd White) clock has Brisbane at nine o’clock, which indicates a rising house market.
Several factors are fuelling this, the main typically being:
- Sentiment around interest rates and the feeling that we are around the high tide mark of this interest rate cycle. Most borrowers feel there’s a rate cut on the horizon, as opposed to when we felt a dip in early to mid-2022 when we were just at the beginning of the rate increases.
- One of the main drivers of the strong demand for property in South-East Queensland/Brisbane/Wynnum-Manly has been inter-state immigration, which was trending in our favour before COVID, based on ABS statistics, and then went through the roof in 2021. I thought the shift was interesting due to the inter-suburb migration, notably people selling in places like Camp Hill/Bulimba/Balmoral, etc. Wynnum hadn’t been high on peoples’ lists for five or ten years; however, that has steadily changed – it’s The Great Wynnum Awakening.
- The ascension driver, where renters who have saved a deposit have a huge incentive to purchase. Firstly, rents have been going up like (almost) never before; townhouse owners or entry-level homeowners then upgrade to the next category of house, which is likely in the $900k to $1.2m range. Then homeowners gear up into the next bracket – it may be a four or five-bedroom home, fairly modern, closer to the water, with a pool, possibly in the $1.5m to $1.8m range, and so forth.
- Of course, there is the 2032 Olympics in the background of all this activity, and the word on the street is that the ‘ramp up’ could likely accelerate approximately four years prior to the start of the Olympics. This is anecdotal; however, it plays a part in the thinking behind purchasing decisions, which rightly or wrongly have self-fulfilling characteristics.
- Balancing factors include inflation, which increased to 7.8% at its peak in December 2022 and pushed the value of houses upwards. This also means people have less disposable income to spend. However, inflation appears to be steadily dropping and is currently 3.6%, according to the latest ABS statistics.
- And then to cap it all off, what we think may happen usually not only doesn’t, but the opposite…or unforeseen events come into play along the way.
