South-East Queensland: Does it deserve the hype?
Why have South-East Queensland property markets been attracting so much positive press over the last year or so?
Blogger: Simon Pressley, Propertyology
Every Tom, Dick and Harry seems to have an opinion, however, few people can articulate any meaningful comment on what is likely to drive SEQ markets.
About a year ago, a couple of high-profile people made a comment along the lines of, "Sydney and Melbourne markets have already moved, so Brisbane must be next". Such gibberish implies that markets perform like well-behaved children who take it in turns playing with their toys.
Other headline-chasers try to sound intelligent by quoting generic stats such as changes in median property values, auction clearance rates, or people attending open homes, and want to pass it off as ‘quality research’. Yawn!
People, especially investors, follow like sheep. Media momentum builds and, suddenly, a growing percentage of property investors are thinking all roads point to Brisbane, Logan, Ipswich or Deception Bay.
Comforted by the fact that everyone appears to be saying the same thing, investors all around country have felt that they’re on a winner and have set about finding an expert with local knowledge to help them secure their own piece of SEQ ‘gold bullion’.
The Propertyology team certainly isn’t going to reject the increased level of new business enquiry from this herd mentality. And, while we do think that parts of SEQ have a healthy outlook, investors are often shocked when we remark that we feel we can make their investment dollar work harder in locations outside of SEQ – other parts of Queensland and interstate. Be the shepherd, not a sheep!
Much of the rhetoric that gets reported on property markets relates to matters affecting housing demand. I recently conducted a keynote presentation at the Australian Property Institute Conference and discussed why housing supply and sentiment play an equally important role in fluctuations of property prices.
Since the turn of the century, equilibrium was maintained between Queensland dwelling construction levels (supply) and demand (population growth).
Population Growth 2003-2013 2008-2013
(10yrs) (Post-GFC)
Queensland 2.4% 2.1%
Australia 1.7% 1.8%
Whilst Queensland’s population growth rate is still above the national average, interstate migration is not what it used to be, and growth rates have eased.
With the mining construction boom winding back, governments are looking at alternative measures to stimulate the economy. Incentives have been offered for new property purchases, more land has been released, and zoning changed. Australia is now in the midst of a construction boom!
Several locations will soon have considerably more housing supply than demand requires, followed by underperforming price growth and rental returns. The battle between ‘supply’ and ‘demand’ is on. Most sheep will end up in the wrong paddock!
