Considering Buying in Queensland after COVID-19?
Wondering how the property market will fare following the Coronavirus shock? The news isn't all that bad for real estate investors purchasing in the Sunshine State.
How was the Brisbane Property Market Hit in 2020?
Unlike the volatility of the share market, the Australian property market does not lose value quickly following economic shocks. Real estate cannot be bought and sold as quickly as shares meaning it retains its value in the short term.
In April 2020, according to Corelogic data, the Brisbane property market continued to grow at a rate of 0.3% compatible with Sydney's 0.4%. Of all the Australian capitals, only Melbourne and Hobart property markets retracted.
While Brisbane's rental market is down 0.4%, free standing housing values have increased 0.3% in April 2020. Units in Brisbane performed the strongest with 0.5% growth.
Looking historically at previous economic downturns, Brisbane's property market has held comparatively steady with only shallow dips.
When will Momentum Increase?
ANZ predicts the low point for the Australian property market to occur mid 2021 with decline in demand anticipated to push property prices down an average of 10% from peak to trough across Australia's capital cities. Drop in demand will continue beyond 2020 as a result of economic uncertainty and volatility, weaker household incomes, reduced immigration and population growth and less overall investment.
The Queensland economy is exposed to less Chinese interest across the areas of tourism, higher education and foreign property investment. However, the QLD housing market is less reliant on overseas migration than other states with the Queensland housing market supported by Australians moving to and investing in sunny QLD. The easing of travel restrictions within Australia will open up the Queensland property market ahead of other states.
Is South-east Queensland a Good Place to Buy?
Property affordability and value for money is high in Queensland. Brisbane's property prices are around 55% of Sydney's prices while average incomes are only 12% lower. With interest rates at record lows, and not expected to rise any time soon, it is a good time to invest if your employment has remained steady.
Above average investment grade homes and units in cities will retain their value the best. Poorer quality housing and rural and regional economies will perform worst in the post recession recovery.
For long term investment, the Queensland property market is stable and confidently predicted to perform well over coming years due to its affordability and live-ability for Australian families. However not all Queensland suburbs will perform the same so as always "think location, location, location!"
Disclaimer: This article is not intended as financial advice and prospective purchasers should seek professional advice for their unique circumstances.