We’re into February and all the indicators tell us this year will be a strong one for the property market. We may not have a crystal ball here at the Henry Wong Team®, but our sound knowledge of the real estate industry has given us strong insights into what we can expect from the market. Let’s look at why we feel sellers can expect a healthy outlook in the months to come.
Interest Rates Are Stabilising
Homeowners around the country breathed a sigh of relief as the RBA left interest rates on hold at the start of February. The cash rate now sits at 4.35%, and while future rises haven’t been ruled out, expert opinion is that we may start to see decreases towards the back end of the year. Inflation has decreased further than expected, with the last quarter returning figures of 4.1%. This is still higher than the target of between 2 and 3%, which is why interest rates will likely stabilise for a few months before we see any drop. The stable interest rates bring peace of mind to buyers, who can plan their budgets and purchases more effectively.
Prices Remained Strong Throughout 2023
In a year where interest rates went crazy, the property market held up impressively well. In Brisbane, we enjoyed an annual growth of 10.41%, with the median home value rising to a staggering $749,000. This strong performance under pressure has inspired confidence in the market which should resonate throughout the year.
Investors are Returning
An effect of that improved confidence is the return of investors to the market. House prices increasing while rates also increased is unusual, and it hasn’t gone unnoticed by investors. The ABS tells us that investor loanbs rose 20.4% over the last 12 months, with more than 16,600 loans written by property investors in December alone. It’s also seen a surge in what is known as ‘rentvesting’, where an investor rents in an area they want to live in, while purchasing property in a more affordable area and renting it out. Rentvesting has increased by 20.7% over the last year.
Dwelling Approvals Remain Low
In Queensland, the number of houses being built simply isn’t keeping up with the demand. In fact, Queensland has fallen almost 50% short of the housing target. 116,000 people moved to our great state, and only 34,000 new dwellings were approved to be built. On top of that, recent severe weather conditions has hampered building efforts and tied up tradies who are fixing existing properties instead of constructing new ones. We’re well short of home building targets, and this is placing upward pressure on the prices of established homes.
The Rental Market is Tighter than Ever Before
Vacancy rates across Queensland are at 0.9%, with Greater Brisbane sitting at around 1%. That’s extremely low, which makes it very hard for our new friends moving up to Queensland to secure themselves a rental. Those who can afford to are bypassing the rental market entirely, and looking to purchase a home instead. We feel that now, with interest rates stabilising and inflation on the downward track, more and more people will be looking to do this.
Let’s Talk Brisbane Real Estate
If you’d like to talk about any of the above points, The Henry Wong Team® is here for you! We love answering questions about Brisbane real estate and the market in general. So get in touch, let’s have a chat. We’re here to help and to ensure you can seamlessly move onto your next chapter in life.
