Here’s an update on the hot topic of Brisbane property prices.
Brisbane Property Market: A Surprise Upswing.
Brisbane property prices are rising faster than expected, leading experts to revise their forecasts for 2024. The recently released PropTrack Property Market Outlook Report, published on June 27, has adjusted Brisbane’s expected annual growth by one percentage point, driven by strong demand and an “exceptionally tight” housing supply so far this year.
Revised Forecast: What to Expect.
According to PropTrack’s economic research director, Cameron Kusher, “we’re now seeing that prices are likely to rise by the end of this year by 4 to 7 per cent,” up from the earlier forecast of 3 to 6 per cent. Despite this increase, Mr. Kusher noted the pace of growth is slowing compared to the 12.2% rise observed between July 2023 and May 2024.
Factors Influencing the Market.
One of the main drivers of the strong price growth over recent years has been the limited supply of properties entering the market and the minimal stock available. However, Mr. Kusher expects more properties to come onto the market, which should alleviate some of the fear of missing out (FOMO) and slow down the price growth.
Interestingly, Brisbane’s property prices have surpassed those in Melbourne, and while prices will continue to rise, the growth is expected to be at a slower pace. “The growth seen over the last five years was not sustainable,” Mr. Kusher said, suggesting a shift to more moderated increases in the coming years.
Housing Affordability Challenges.
Housing affordability remains a significant challenge in Brisbane and South East Queensland, with borrowing capacities increasingly stretched. Mr. Kusher highlighted that fewer people can continue to bid up prices as borrowing capacities decline. Additionally, rental returns are not as attractive as they once were.
The current interest rates, the highest in 12 years, are exacerbating these challenges. Mr. Kusher compared the current 4.35% cash rate to a 10-12% rate in the early ’90s, considering the substantial amount of debt households now carry and the high property prices.
Unfortunately, the Reserve Bank of Australia (RBA) is unlikely to consider housing affordability in its fight against inflation. Mr. Kusher emphasized the RBA’s focus on reducing inflation back to the 2-3% range, even if it means higher interest rates for longer.
The latest data from the Australian Bureau of Statistics showed inflation at 4% in May, which indicates that interest rates are likely to stay elevated. This could lead to more mortgage stress and a potential increase in mortgage arrears, impacting buying intentions.
What This Means for Buyers.
For those of you considering entering the Brisbane property market, it’s essential to stay informed and prepared. While prices may continue to rise, the pace is expected to slow, creating a potentially more favourable environment for buyers toward mid-2025.
How I Can Help.
Navigating this dynamic market can be challenging, but I’m here to help. Whether you’re considering buying your first home, upgrading, or refinancing, a home loan review can provide valuable insights into your borrowing power and the best loan options for your needs.
Contact me today to discuss your options and plan your next steps in this evolving market. Let’s make sure you’re in the best possible position to achieve your property goals.
0447654321
