The property market is an extremely important cornerstone of the Australian economy, shaping policy and public sentiment in a big way. Owning a house is fundamental to achieving ‘the Australian Dream’, and as such real estate seems to dominate many of our media headlines. It’s talked about a LOT in all sectors of society!
Perhaps one thing no one could have predicted is how resilient the Australian housing market has proved to be over the last few months. In fact, it defied the expectations of most experts (although we’ve always had a good feeling about it here at The Henry Wong Team®)!
Spring is traditionally a busy time in real estate, and as we’re bang in the middle of it now it seems a good moment to reflect on where Brisbane real estate prices are likely to go from here. For us, we feel the trajectory is only upwards, and there’s a few reasons for that. Let’s take a look at why homeowners and property investors should be feeling confident in the market right now.
CoreLogic HVI Indicates Positive Growth
The Home Value Index, or HVI, from CoreLogic is predicting a record high for property prices in Australia come November. Over the last eight months (since February this year), prices have increased month on month. This was after they dropped nearly 10% on average following the post-Covid boom which ended in May 2022.
During the September quarter, Brisbane recorded the second highest property price growth figures, coming in at 3.9%. With the HVI predicting this to continue on this trajectory, house prices aren’t likely to slow down.
Interest Rates Have Plateaued
After 12 months of consecutive rate rises, the RBA has now kept the cash rate the same for four months in a row. The inflation rate has slowed, and although it isn’t in the ballpark they’re aiming for, this could be a sign we’re reaching the end of the interest rate hikes (experts have been predicting one more rise though, probably before the end of the year.)
The fact that buyers are still out there and the market is going strong shows that buyers have become accustomed to the higher interest rates, and incorporated them into their real estate plans.
Housing Undersupply
Construction simply isn’t keeping up with housing demand. Dwelling approvals have slumped to an average of 13,355 per month over the last six months. That’s 23% off the ten year average, putting us at the lowest level of housing approvals in a decade. Less supply and increasing demand has an upward effect on housing prices, meaning the prices of existing dwellings will continue to be strong. Coupled with this is the rising cost of construction, which is causing more buyers who would normally build to look for an existing home to buy instead.
Overseas Migration Heating Up
After a lull thanks to Covid closing borders and reducing international migration, Australia’s borders are open. International migration is back on, and in a big way too. Annual growth sits at well over half a million people, and the majority of those will be headed to capital cities such as Brisbane. When you look at this through the lens of the housing undersupply point, it’s easy to see how the property market will continue on its upward path.
Rental Crisis Not Slowing Down
Whether you’re a tenant or a homeowner, you wouldn’t have been able to escape all the talk of the ongoing rental crisis in Australia. OIn Brisbane, rental vacancy rates are at historic lows, and weekly rent levels are soaring. The Rental Pain Index has Queensland ahead of all the other states at 83.69% rental pain, which is a clear indication of the difficulties tenants face. This is pushing people away from renting and into looking for a property, increasing the pressure on the housing market.
Talk with The Brisbane Real Estate Experts
If you’d like to chat about the current state of the Brisbane housing market, or have questions about your own property, then Henry is here for you. Her’s been selling real estate on the southside of Brisbane and beyond for many years now, and would love to answer your questions. Get in touch with him today.
