BY BYRON FREEBORN, RAINE & HORNE WYNNUM
The “why” counts the most in many decisions, especially when buying or selling a property.
With the whirlwind of events that affect the economy and the property market, not to mention the psychological effects on the general population, it’s now more important than ever to assess your situation – what’s your motivation to stay put in your current home, keep renting, or make the leap to purchase?
One of the reasons the “why” is critical is because we have no crystal ball to see into the future. As perceived evidence points to the economy heading in one particular direction, before we know it, six months later, the market swings around and does the opposite of what we thought it was going to do (or not).
At this point, what we do know?
Interest rates have gone up from a historical low point. However, they’re still very low. Through talking to buyers, I’ve learned they are holding off making a purchasing decision to “see what happens”, and the following conversation with an investor will be the complete opposite – they are out hunting for a purchase. Some are hovering on the sidelines; they feel this is the time to pick up the right property for the right price and lock in “lowish” interest rates. They know they have the supply/demand equation in their favour when selecting a tenant for their newly purchased investment.
From the perspective of a purchaser looking to buy their home – mainly if it’s a needs-based purchase, i.e. job relocation, baby on the way, etc. – they will likely own that piece of real estate for the next five to 10 years. They need a home, aren’t purchasing at the height of the buyer flurry we saw over the last 12 months, and are sticking within their serviceability levels. Transactions like these will continue to occur, and houses will continue to sell.
The employment rate has seen a steady incline in Queensland, particularly since the Covid drop in early 2020, with a slight decrease in the April 2022 quarter of 0.5%. Population growth in Queensland for the 12 months to September 2021 was up 1.1%, against a National overage of 0.3%. (Statistics supplied by https://www.qgso.qld.gov.au/statistics).
The above ingredients are, in part, what has driven the growth in real estate values in Southeast Queensland and Brisbane in the last 12 to 18 months. Locally, there was 33% median house growth for Wynnum in that period, representing strong supply/demand growth overall. However, it’s not without precedent, as we have seen bigger jumps in house values in the past.
For example, locals Jenny and Tom purchased an investment in Lyrian St, Manly West, back in 2001 for $165,000, then sold for $275,000 in 2003. That’s an incredible 66% gain in two years. Then, it was back to a low and steady trend upward until 2010, when we hit a flat spot post-GFC, then it was game-on again, peaking in 2015 with the decades-highest median gain for houses at approximately 10% for Wynnum. Since the latest ramp-up of 2021, the market has been slow and steady. (Statistics from RP Data).
In conclusion, Brisbane, particularly Wynnum/Manly, is a stubborn ol’ girl that often trots along in the right direction, and occasionally bolts out of the blocks to stretch the legs!
