John McGrath - Wave Of WFH Seachangers Heading To Queensland
Beautiful one day, closed the next…Queensland’s hard border has protected home values in Brisbane and surrounds this year and once the boom gate goes up, which is expected by Christmas, I think we’ll be seeing significant new demand and capital growth in the south east corner in 2021.
During the pandemic, Brisbane home values have demonstrated remarkable resilience. The median home price remained virtually unchanged between March and October compared to falls of -5.5% in Melbourne and -2.9% in Sydney. The median rose by 0.5% in November, according to CoreLogic.
As discussed in our recently released McGrath Report 2021, Queensland was Australia’s No 1 destination for interstate migration prior to the virus. In 2019, 106,628 people moved there, producing a net gain of nearly 23,000 – 70% of whom settled in Brisbane. This was on the back of long-awaited improved economic conditions and jobs growth.
Now, there’s a new factor amplifying this trend. The pandemic has prompted people to reassess their lives and this alone has convinced many to relocate north to enjoy the best lifestyle in Australia. Others have made the same decision because they can now work from home, which means they can stay working for a Sydney or Melbourne company but do it from a dream ‘forever’ home on the Gold Coast that costs half the price with cash left over.
The desire to head north is so strong that agents across Brisbane, the Gold Coast and Sunshine Coast have reported noticeable increases in enquiry from southern city relocators, with many sales off high quality video inspections alone.
This surge in demand is driving a bit of FOMO amongst locals who realise the border closure is giving them a short term advantage before a new wave of southern buyers descend on the state in 2021.
Southern buyers typically bring healthy budgets to Queensland after selling in Sydney or Melbourne, which are far more expensive markets. This, along with locals upgrading their homes instead of travelling, has boosted the luxury market where there is also a lack of stock.
Agents across Brisbane are reporting more cash sales to prestige buyers. Examples during Winter include an $8.5 million beachfront sale in Raby Bay that attracted seven cash offers and a $4.4 million riverfront apartment sale in Kangaroo Point.
First home buying has also remained very strong in Queensland this year, with lending trending up since April due to grants of $15,000 for new homes purchased for up to $750,000, stamp duty concessions on property up to $550,000, the HomeBuilder grant of $25,000 and the Regional Home Building Boost of $5,000 for new home purchases by December 31.
Brisbane and surrounds are also likely to benefit from higher investment activity in coming years, as more Australians look to bricks and mortar for income due to reduced dividends and virtually no interest being paid on savings. Brisbane offers a 4.2% yield on houses compared to 2.7% in Sydney and 2.9% in Melbourne; and 5.2% on apartments compared to 3.3% in Sydney and 3.8% in Melbourne.
A boom cycle in South East Queensland is long overdue. It’s been held back by the long tail of the end of the mining boom and lacking jobs growth until recent years. I can’t wait to see what the new year brings for this particular property market.
To find out more about market trends in Brisbane and surrounds and which suburbs I am tipping for best capital growth download the McGrath Report 2021.
The views expressed in this article are an opinion only and readers should rely on their independent advice in relation to such matters.
This article originally appeared in The Real Estate Conversation (November 23, 2020)
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