The latest BIS Oxford Economics report has forecast Brisbane to be in the top 3 major markets in Australia for both houses and apartments with average growth forecasts of 7% and 5% respectively per annum until 2023 following a small decline over the next few months.
There are a lot of discussions at the moment on how COVID-19 will impact property markets throughout Australia.The latest BIS Oxford Economics report released earlier this month (April 2020) forecasts all major property markets across Australia to be negatively impacted in the short-term with stablisations and rebound to occur soon after. The BIS report states ‘we expect the drag to be temporary, with prices expected to stabilize in Q3, followed by a rebound in Q4 and 2021’.
The Australian residential property markets are historically more resilient than the share market and most other sectors of the economy which is creating some great buying opportunities at the moment to acquire properties at below normal market prices. With property prices to rebound after this crisis has been contained, savvy investors are staying poised and ready to strike.
Brisbane listed in top 3 major markets for growth
One of the property markets set to come out well from COVID-19 is Brisbane which BIS has listed in the top 3 major markets in Australia for both houses and apartments with average growth forecasts of 7% and 5% respectively per annum until 2023. The relative affordability remains extremely strong in Brisbane with median property price roughly half of Sydney, but median household incomes of only 13% less than Sydney’s will ensure local and investment demand will continue in coming years.
Population growth will be temporarily slowed but we expect this will pick up again and continue to grow above the national average once restrictions ease and state and national borders begin to reopen. Brisbane also has a massive lifeline in the form of it’s $15B infrastructure pipeline being led by the $3.6B Queens Wharf & Casino, $2B Brisbane Live precinct at Roma St Station, and the $6.8B Cross River Rail Project improving the connectivity of Brisbane. Local and State governments are ensuring these projects continue on and there are even recent talks of accelerating these project timelines to maintain the growth of the local economy. Queensland’s expanding mining sector will also have positive flow on effects in coming years for Brisbane’s economy.
Brisbane to see undersupply in the coming 12 months
Supply of both new dwelling commencements and completions have been declining sharply in the past year and this is set to continue as we will start to see Brisbane come into an undersupply in the coming 12 months, coupled with fewer new listings will help upward pressure on prices. Rental prices are currently holding strong in many parts of inner and middle ring Brisbane with new rental listings continuing to be soaked up by local demand relatively quickly largely to cater for Brisbane’s accelerating. Brisbane has a healthy vacancy rate of just 2.3% according to BIS.
Consumer confidence regaining positive momentum
The latest ANZ Roy Morgan Consumer Confidence survey indicates that Consumer Confidence is regaining positive momentum and this is definitely something we have been feeling in our Industry and hearing from our clients over the past few weeks.
The further easing of COVID-19 restrictions and optimism surrounding the daily new cases figure offers a glimmer of light at the end of this tunnel and for those who now know where they stand in terms of job security, there’s a sense of realisation that this situation could present some opportunities as well as the obvious challenges.
Now is as good a time as any to remind ourselves that everything is temporary and at the end of the day ‘we will get through this!’