Didn’t make our National Property Market Seminar in Brisbane last week?
Even if you did manage to make it on the day, with a packed house at the Brisbane Exhibition centre, here is a recap…
There was valuable information from Michael Yardney around building your asset base, along with your mindset.
Ken Raiss also shared very important information with regards to protecting and passing on your wealth.
I know the highlight for many though, was listening to Dr Andrew Wilson from My Housing Market talk about the dynamics of the Brisbane market.
To help summarise, here are my key points;
Interest Rates
Dr Andrew Wilson pointed out that interest rates are a key driver for Capital Growth.
Understandably when they are low and we have more money in our pockets, property prices tend to rise.On the other hand, the RBA has the ability to take that extra money out of your pocket when the market is over heating by raising interest rates and cooling the market.
Dr Wilson believes that while we are at record lows, it will not be changing any time soon, in fact he has suggested their may be more cuts to come.
Either way they will remain low over the short to medium term.
There is a need to be aware but not alarmed with Coronavirus, because the underlying principles of our Economy are still solid.
There has never been a cheaper time in history to be holding an investment property!
Wages, Rates and Prices all low and falling
As the graph highlights, along with Interest Rates, our wages and prices in general are all low and falling and this will remain a constant.
According to the ABS if you subtract wages growth from price growth, you are left with mere 0.6% difference and this is real wages growth.
This is where we see a real change in our markets.
For the last 2 – 3 decades, you were able to buy almost anywhere in certain locations (like Sydney and Melbourne) and you would have done ok.
Moving forward though, you need to understand the areas and locations where people can and will pay more for property leading to superior growth.
90% of locations will have a Demographic where wages growth is barely registering and property prices will do the same as a result.
This is even more important in the steady Brisbane market.
High migration here to stay
Both sides of Government agree that higher immigration rates are here to stay, easily up over the 200,000 per annum.
History will tell us, that most of these are professionally trained immigrants they will head to where jobs are being created.
No surprises that 85% of immigrants in the last 12 months ended up in Sydney, Brisbane and Melbourne.
As a property investor – WHY fight the big trends?
- Also read:Home Prices Still Rising Over November | Latest Housing Market Stats
- Also read:Latest property price forecasts for 2025 revealed. What’s ahead in our housing markets in the next year or two?
- Also read:Melbourne property market forecast for 2025
- Also read:Sydney property market forecast for 2025
- Also read:Brisbane’s property market forecast for 2025
For interstate migrants, it is Queensland that is the destination of choice as they are finally starting to create more jobs.
As you will note, the number of people moving to QLD is almost identical to the number leaving NSW!
Supply and Demand
For mine it all comes down to Supply and Demand and it is key when it comes to property.
Dr Wilson has created his own matrix and it is a telling story for Brisbane, as it fast becomes an undersupplied market.
He simply measures New home Demand from Net Migration and First Home Buyers and subtracts it from the latest Supply for New Dwelling Completions.
Here is what it looks like for Brisbane…
At this point in time the Brisbane housing market is under supplied by an estimated 80 households per week!
And with our population continuing to rise and new home construction falling, it is well placed for future growth.
In summary
There were some crucial take-aways from the recent Brisbane Seminar.
From a Macroeconomic perspective, wages and growth is going to be considerably lower over the short to medium term.
Interest rates are set to stay at record lows for the foreseeable future and this is a key factor for house price growth.
We are already seeing overseas visitors heading to the three bigger capitals, with interstate migrants favouring Queensland.
With a rise in Demand from migration, matching a shortage of construction, Brisbane is currently an undersupplied market.
The timing is right, however you need to find the right location, as 80% of Brisbane’s house prices will be low due to lower wages growth.
Only the areas where jobs are being created and incomes are rising will show strong capital growth.
You just need to know where to look, or at least know someone who knows where to look!
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