SOUTHEAST Queensland house prices are tipped to grow by up to 20 per cent in the next few years as Sydney and Melbourne’s once sizzling property markets continue to lose steam, according to veteran real estate agent John McGrath.
Speaking after the release of the group’s annual residential market report, Mr McGrath told The Courier-Mail the state was only just over halfway through the current property cycle and stood to benefit from the slowdown starting to grip the southern capitals.
“We’re very bullish in your part of the world,” Mr McGrath said.
“There’s no doubt in my mind there will continue to be growth in southeast Queensland.”
Property research firm CoreLogic, which releases its monthly home value index this week, has flagged a further fall in Sydney housing values, but a rise of 0.3 per cent in Brisbane home prices.
Mr McGrath said he expected between 10 and 20 per cent growth over the next two to three years in the Queensland’s southeast corner, led by Brisbane.
“There have been huge capital gains in Sydney and Melbourne and not only has it made it unaffordable … it’s certainly made people look for better value elsewhere in the country,” he said.
“I think southeast Queensland and Perth represent that value.”
The McGrath report found southeast Queensland’s affordability was attracting record levels of interstate migration as well as rising interest from investors and first home buyers, with its housing market continuing to produce solid results despite the economy remaining sluggish as it transitions away from mining.
“During the GFC, a lot of people thought it was sensible to wait, but now we’ve got a lot of people sitting in ordinary homes in Sydney and Melbourne worth $2 million to $2.5 million – many in their 60s and 70s – who are saying ‘what could we do next?’ and looking to southeast Queensland,” Mr McGrath said.
And he said it wasn’t just Baby Boomers and seachangers who were selling up and buying in Queensland with money to spare, but also young families.
Mr McGrath predicts suburbs with easy access to the CBD, the water and/or infrastructure to be the big winners over the next year.
In Brisbane, his top pick is the bayside suburb of Wynnum, 14km from the CBD.
It borders the more prestigious Manly and boasts the same seaside village atmosphere without the hefty price tag, which is attracting younger professionals as well as interstate and international buyers.
North Lakes in the Moreton Bay region is also expected to continue to experience strong growth, with significant residential and commercial developments in the pipeline.
“I think it’s going to continue to attract a lot of young families that can’t afford inner Brisbane,” Mr McGrath said.
On the Gold Coast, Coomera is tipped to benefit from new infrastructure including the $470 million Westfield Shopping Centre due to open in late 2018.
“There are a lot of great areas in between Brisbane and the Gold Coast and Coomera is a great example,” Mr McGrath said.
“I think it will continue to grow.”
On the Sunshine Coast, McGrath’s top picks are Peregian Springs and Caloundra.
The regional centre of Toowoomba is also tipped for strong growth over the next year thanks to its affordability and access to east coast cities via the new airport, according to the report.
Originally Published: www.sunshinecoastdaily.com.au
Queensland Construction Companies at ‘High Risk’ of Insolvency
Despite a steady period of growth and surging infrastructure activity, insolvency group SV Partners’ warned that more than 430 Queensland construction businesses are at high to severe risk of insolvency.
Smaller businesses related to the construction industry are being warned to keep an eye on their capital as activity faces a possible downturn.
The latest data from SV Partners’ Commercial Risk Outlook report said that while the construction industry has experienced steady growth so far in 2018 the benefits may not be shared among smaller construction service businesses.
Plumbers, electricians, carpenters and residential builders are most at risk of financial collapse in the next 12 months.
SV Partners managing director Terry van der Velde said smaller construction services are more prone to a predicted residential building downturn and the least likely to gain from the rise in commercial activity.
“Industry bodies are forecasting a downturn in residential construction in the coming year, particularly in the apartment market due to oversupply, and there has already been reports of weakening apartment and unit dwelling approvals” van der Velde said.
“Construction companies need to keep a close eye on their cash flow to ensure they have enough capital to weather short to medium term cash flow shortfalls.”
SV Partners report showed 1,967 construction businesses, or three per cent of the industry, were at risk of failure.
It also found that a total of 12,338 businesses, or 2.4 per cent of incorporated Australian businesses across all industries, were at high to severe risk of financial failure over the next 12 months.
Property is the country’s biggest industry contributing $200.9 billion (13 per cent) of GDP and is the nation’s largest employer with 1.4 million people.
“Construction businesses tend to be very interlinked, so when one business struggles to pay its creditors, it can have significant impacts on contractors in the chain,” van der Velde said
“Contractors in the finishing trades are often the first to be impacted by these struggles, as they are usually the last in the chain and hence the last to be paid, which creates cash flow strain.
Van der Velde says that despite these weaknesses, business can put in place strategies to cope with the changing conditions and make the most of opportunities.
“Implementing robust cash management strategies and well-thought- out capital structures can assist in future proofing a business.”
Originally Published: theurbandeveloper.com
Property price growth on Gold and Sunshine coasts outperforming Brisbane, REIQ report finds
Several of Brisbane’s more expensive suburbs are among the biggest losers in the property stakes, a Real Estate Institute of Queensland (REIQ) report rating performance in 2017 has found.
The Queensland market monitor showed Highgate Hill, Milton, Kelvin Grove and West End suffered the biggest sales price declines in the inner-city ring, followed by Wilston, New Farm and Taringa.
Highgate Hill in Brisbane’s inner-south suffered a median price plunge of 17.9 per cent year-on-year to $937,500.
Milton’s median price fell 11.4 per cent to $855,000, compared to 2016.
In Kelvin Grove, the median sale price was down 7.9 per cent to $764,750 and West End dropped 6.3 per cent to $1,030,500.
But some Brisbane suburbs enjoyed strong growth.
Teneriffe in the city’s inner-north became Brisbane’s first $2 million suburb in 2017 with a median sale price of $2.4 million — up 30 per cent on 2016.
At the same time, Kangaroo Point and Kalinga joined the $1 million club, with median sale prices soaring 28.4 per cent and 22.5 per cent respectively.
REIQ media manager Felicity Moore said inconsistences in price growth throughout the city could be attributed to “supply issues”.
“When you see a price soften significantly, it could be that there’s an additional level of stock developed, such as house and land packages that meets the level of demand,” Ms Moore said.
PHOTO: The Gold Coast recorded an overall increase in median sale price of 7.7 per cent. (Supplied: Tourism and Events Queensland)
Beach lifestyle proving attractive
Both the Gold Coast and the Sunshine Coast outperformed Brisbane in terms of house price growth.
The REIQ report showed the Gold Coast recorded an overall increase in median sale price of 7.7 per cent and the Sunshine Coast achieved 5.9 per cent, while Brisbane only managed an average of 2.6 per cent.
Ms Moore said the rediscovery of the beach “lifestyle markets” was somewhat overdue.
“When you look at what those markets have to offer, the Gold Coast and Sunshine Coast are just world class coastal beachfront living at its best,” she said.
“They’re not densely populated, they’ve both got world class beaches, great shopping and good schools and the amenities that go into those communities are of a very high standard.”
She said 2017 results positioned the Gold Coast as the strongest market in Queensland and among the top 10 nationally.
“It’s a similar story with the Sunshine Coast, although for years the level of supply going into that market has been a bit constrained,” she said.
“It’s struggled from a long-time lack of construction of new dwellings and when there’s demand building up it puts pressure on prices.”
Mining downturn impact
The report indicated the mining downturn continued to impact parts of central Queensland.
In Blackwater, the median sale price nosedived 70 per cent to just $36,000 last year, down from $120,000 in 2016.
Five years ago, the average sale price was $450,000.
“It’s a very sad situation but there is good news on the horizon,” Ms Moore said.
“The global body that monitors coal demand is forecasting that from 2022 there’s going to be a global uptick in demand, so in anticipation of that we’re seeing some coal miners pull some smaller mines out of mothballs.
“There’s a level of confidence coming back into the coal sector.”
Originally Published: www.abc.net.au
The property clock strikes big for hot spot areas
9 Lion St, Ipswich. Picture: realestate.com.auSource:Supplied
DESPITE last month’s previous lacklustre values, analyst Michael Matusik has identified the areas on the upswing.
While property values remained fairly stagnant during February, property analyst Michael Matusik has revealed where the housing market is on the upswing.
Mr Matusik’s latest property clock for houses, has Brisbane, Gold Coast, Logan, Redlands, Sunshine Coast and Gympie all in upswing.
He said a market’s position on the property clock was based on the strength and direction of key indicators including sales numbers, price and rent, demand and how much new supply there was.
His latest Matusik Missive also listed Ipswich, the Fraser Coast and Noosa markets as heading into upswing territory.
Ipswich has many beautiful homes, often at prices well below what something similar would cost in Brisbane’s suburbs. A four-bedroom home at 9 Lion St,Ipswich is listed for $879,000.
The land the home sits on was bought in 1904 from the family of the then Ipswich Mayor Mr Pettigrew. A home was built on it in 1907.
The period home has 3.5m high ceilings, VJ walls, period window, and timber floorboards which have all been restored.
The home has two new bathrooms, a large separate dining area and study. It is listed through Steve Athanates of NGU Real Estate Ipswich.
On the Gold Coast at Robina, 196 Easthill Drive is listed for more than $850,000.
The three-bedroom home is within the Glades Golf Community.
It has formal and informal living and dining areas, and an outdoor entertainment area with a swimming pool nearby.
It is listed through Ian and Linda Mills of McGrath – Palm Beach.
On the Sunshine Coast at Noosaville a home at 15 Bluebell Court is listed for offers of more than $740,000.
The three-bedroom home is in a cul-de-sac in a residential pocket bordered by the Lake Doonella Reserve.
The single-level home has open plan living and dining areas. An outdoor area overlooks the pool and reserve at the rear of the property.
It is listed through Tansy Grant and Justin Sykes of Ray White – Noosa.
Originally published: www.news.com.au
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