Industry News

It is generally accepted that there is a shortage of houses in and around Brisbane. More and more people seem to be moving here at a rate that seems to be outstripping the ability of the property market to keep up.

And of course a shortage of property has to eventually drive up prices, doesn’t it?

Well the founder of the Property Club, Kevin Young believes it does as he explained in a Suzanne Colville article on The World News Magazine.

“The significant demand for property in Brisbane is moving so quickly that developers are struggling to keep up. At The Property Club we have over 100 buyers waiting to invest, however sourcing completed suitable stock is becoming increasingly difficult. This is the tip of the iceberg of an ever growing Australian housing supply shortage,” Kevin said.

Of course I would expect someone in the property development market to suggest that the market is set to boom, but is it going to suddenly explode in the next 12-18 months given the state of finances in Europe and the US?

I must admit I’m not quite so sure. However I do agree that investing in property is a great idea regardless. But which properties are going to give the best returns?

Well time and again I see the properties that do best are those that have been well designed. The better homes sell faster and hold their value far better. So should you be rushing out and buying an investment property or investing in your own home?

Well of course that’s a matter for you to discuss with your financial advisor as each person’s situations can be quite different. Personally I would invest in renovating my own home for a future capital gain as I am not as confident of the markets medium term growth for average, un-renovated properties.

There has been a lot of doom and gloom talk about the economy, particularly with the mining boom showing signs of beginning to slow. And with this there has been plenty of negative talk about the state of the property market as well.

So in light of this I was interested to read this article written by Paul Kounnas about a recent talk given by Paul Braddick the Head of Property Research at ANZ:

Paul Braddick said the global uncertainty was keeping markets on edge and although the Australian economy may be a two speed economy, he believes it is poised to outperform.

Housing sentiment is weak but the fundamentals according to Paul Braddick are solid. Improved affordability, housing shortage and population growth limits any downside.

 
Paul goes on to explain that he believes the two speed economy is set to favour the Northern Territory, Western Australia, South Australia and (fortunately for us) Queensland, and that it’s only a lack of consumer confidence that is stopping the housing market from growing again.

This further reinforces my point that the time to buy, build and/or renovate is NOW. The property market will start growing again soon enough, and the ultra competitive pricing that we are seeing from builders and suppliers will soon enough be a thing of the past.

A lot has been said about the property market being slow in South East Queensland, which makes it a great time to build or renovate as even the very best builders are quoting at very competitive rates just to get work coming in.

Meanwhile outside of the Southeast corner prices in some regional Queensland property markets are very, very healthy.

This is due to mining, which despite China’s growth reportedly slowing, still continues to drive up prices in a number of regional centres.

Gladstone for example would be a great place to own a rental property at the moment if this recent story on the ABC’s website is anything to go by:

The Real Estate Institute of Queensland (REIQ) says Gladstone remains the state’s tightest rental market.
The REIQ says most regions posted vacancy rates of 2.5 per cent or lower last month, but in Gladstone the rate is below 1 per cent.

Whilst Roma appears to be going ahead in leaps and bounds based on this Courier Mail article:

IT’S a long way from its masterplanned ocean-front community Casuarina Beach just south of the border. But Brisbane-based developer Consolidated Properties is making a seamless shift from mining the seachange phenomenon to tapping into the rich vein of opportunity in the Surat Basin.

Last week, it finalised settlement of its $3.5 million purchase of the 55ha site earmarked for its Roma One Business Park and has secured construction approvals for the $50 million project.

But it is worth noting that whilst the mining boom continues to push up prices in some regional centres, mining growth has slowed and it is hoped that a growth in the housing construction market will take its place as discussed in this article in the Brisbane Times:

In yesterday’s Senate Estimates hearing, David Gruen, executive director of Treasuries Macroeconomic Group, repeated the mantra that Australia’s officials are hoping for an uplift in housing construction to fill the void: “In a couple of years, when mining investment does not contribute to growth any more, we will need other things to contribute to growth… One of the most obvious things [to contribute to growth] is the housing market, given that we think there is under-supply. That is a natural and desirable development and we are seeing early signs of it.”

Read more: http://www.brisbanetimes.com.au/business/can-housing-fill-the-void-20121019-27v34.html#ixzz29zpvycAF

If Australia’s future economic growth is driven by the housing construction market as many suspect it will be, the ultra competitive pricing we’re seeing from builders now might be very short lived. So if you are thinking of building or renovating, the time to call us about your project requirements are now.