Last week on Real Estate Talk we did a whip around Australia with nine experts giving their take on the national property market.
I will feature transcripts of these interviews in my blog here over the next few days starting today with what’s happening in the Queensland and Tasmanian property market.
Kevin: I always love to start the show with some good news, and here is some great news. The best news in the property market right now is certainly coming out of Queensland, and you’re going to hear right through this show today a number of people around Australia talking about what is happening in Queensland.
It’s almost like the other states are now comparing it with Queensland. Let’s get a bit of an idea on what is happening.
Shannon Davis, a Director of Metropole Property Strategists in Brisbane, joins me. There’s a lot of good news coming out of Brisbane and southeast Queensland right now, Shannon?
Shannon: Definitely, and about time, as well.
We’re definitely seeing a lot of movement of money up to Brisbane at the moment, and one of the attractions there is the healthier yield.
It’s a mid-4% yield, and that’s driving a lot of interest from the southern states and maybe expats abroad. Yeah, it’s about time.
Kevin: It’s still a very affordable median price. According to RP Data, they’re saying $475,000 with a 5.3% increase over the last twelve months. What’s the median unit price now in Brisbane?
Shannon: Closer to $377,000. There are some big areas of oversupply that you should watch out for, where the density has increased. But yes, it’s still good value there, as well.
Kevin: This is an oversupply of units, you’re saying?
Shannon: Yeah, definitely. There’s been some rezoning and areas where there’s lots of supply right now and a vacancy because it’s all come onto completion at once.
That’s South Brisbane, the City and Fortitude Valley. You have Teneriffe and parts of Hamilton and Bowen Hills that are also oversupplied.
Kevin: What’s been behind the great growth over the last twelve months in southeast Queensland?
Shannon: I think playing catch up.
I think, definitely, with the GFC and the flood, investors and developers lost a bit of interest. Rents continue to rise.
They’re also seeing the Brisbane market for what it is now – as a diversified economy, a big mining state with the fly-in fly-outs and lots of investor interest.
I think the other thing to watch out for, Kevin, is if people retiring start to sell up their properties in Sydney and Melbourne, they might find they have a more comfortable retirement in Brisbane, and you might seeing people moving on foot up to Brisbane, as well.
Kevin: Would that be Brisbane, or do you think it could also include Gold Coast and Sunshine Coast?
Shannon: It could definitely include Gold Coast and Sunshine Coast, as well, for lifestyle reasons, but if they’re only partially retired, maybe the economy of Brisbane would be more of an attraction.
Shannon: No worries. Any time.
Kevin: We’ll go from one end of the East Coast to the other. This time, we’re going to have a look at the Tasmanian market, Hobart. Joining me from LJ Hooker in Hobart, Mark Devine. Mark, thank you for your time.
Mark: It’s a pleasure.
Kevin: Looking at the figures that we’ve received from RP Data, they tell us that the median house price is a touch over $300,000 in Hobart. Is that what you’re seeing, as well?
Mark: Yes, that’s correct. I must admit we also subscribe and produce some research from Australian Property Monitors, but the figures are relatively consistent between the two organizations.
The average price that we’re reporting in that report is $325,000, which is showing a year-on-year growth of over 3%.
Kevin: It’s still sluggish when you compare it to other parts of Australia, as well. Is it pretty much what you were expecting?
Mark: Yes. I think probably Tasmania and Hobart have always experienced a lag between the activity in the mainland and the larger markets to washing through into our economy, and there have been some fairly well-publicized difficulties in the Tasmanian economy over the last few years with the change of government recently and hopefully some new leadership and stimulus, we’re expecting a little bit of a change around and some real growth in our market.
Kevin: The RP Data report also tells us that the median unit price is certainly under $300,000. At $275,000, it makes it very affordable.
Mark: Yes. The really telling factor that we try to emphasize with people looking at our market is the affordability.
We remain, I believe, the most affordable capital city to buy accommodation in, and what we desperately need and what we’re working on is trying to provide employment opportunities for those people to relocate to our city.
Kevin: From an investor point of view, that vacancy rate of 1.7, according to SQM Research is pretty low – very attractive.
Mark: Yes. To add to that, generally, we would probably offer a higher rate of return for those residential investors. You would probably expect that when we don’t have the big upswings in capital value.
But for people who like a low risk investment alternative, then I think Hobart has a lot to offer.
Kevin: What would be the best market in Hobart or the best area in Hobart to look at if I was looking at buying around the median of, say, around $300,000 to $340,000?
Mark: Within the research that we do, interestingly, the last twelve months there has been probably more growth in the Inner Northern suburbs of Hobart. Places like New Town, Moonah – those sorts of areas – Lenah Valley would probably be in the areas to get into.
Kevin: Are you seeing much new development there by way of new units going up?
Mark: Probably not really – certainly not, the scale that you experience in the bigger cities. I guess one of the reasons for that is unless that unit development side has some really special attributes about it, everything is so close in Hobart that you can buy very a comfortable three-bedroom home and only probably be five minutes from the CBD.
Kevin: That’s our wrap on the Tasmanian market. Thanks to Mark Devine from LJ Hooker in Hobart. Thanks, Mark.
Mark: It’s a pleasure.
Stay tuned….Tomorrow we talk to Michael Yardney about the Melbourne property market and & John McGrath about what’s happening in Canberra.
Listen to the full show at RealEstateTalk.com.au and while you’re there subscribe and receive our weekly podcast (or the transcripts) where I interview Australia’s leading property experts.