The Queensland property market is tipped for strong growth despite the country being in its first recession in nearly three decades, an industry expert predicts.
According to the CEO of the Real Estate Institute of Queensland (REIQ), Antonia Mercorella, the Sunshine State has a number of tailwinds that should help it grow.
Ms Mercorella said COVID-19 could see an acceleration in migration, with an influx of Sydneysiders and Melburnians likely to move north.
“Prior to the outbreak of the pandemic, Queensland was the number one destination for interstate relocations, particularly from major metropolitan areas such as Sydney and Melbourne. As this pandemic continues to affect us all, it’s introduced many of us to the possibility of a ‘new normal’ way of working — that is, remotely from home. And spending more time at home is seeing more people considering their options,” Ms Mercorella explained.
The CEO pointed to recent sales data showing interstate buyers are still purchasing properties sight unseen.
“We anticipate this demand to surge in the coming year ahead as we navigate through to the other side of this pandemic,” Ms Mercorella said.
Ms Mercorella noted how the property market is currently well supported by monetary and fiscal policies, which are being slowly withdrawn in September.
“This is likely to create some downward pressure on property values as income and borrowing capacity is limited and sentiment levels drop,” she said.
“However, with the federal government preparing to unveil tax cuts and spending measures in the October 6 budget, which will include lending reforms intended to improve access to credit, perhaps it’s not all doom and gloom as some pundits might have you think.”
Finally, Ms Mercorella highlighted the current property market, which in the June quarter did not have falls that many predicted.
“CoreLogic’s latest data for the April–June 2020 quarter, a spectacular standout is that across 13 major regions, only two reported marginal price retractions — these included Cairns (0.5 [of a percentage point] and 1.3 per cent drop in median house and unit prices, respectively) and Mackay (2.2 per cent drop in median unit price),” she said.
“Meanwhile, the median house price in our state’s capital increased by 0.7 [of a percentage point], with Brisbane house prices remaining stable with 2.8 per cent annual growth, which is a satisfying outcome considering the city recorded negative growth across all three months for the quarter.
“Brisbane’s affordability, low income-to-debt ratio, change in investor behaviour, rise in rental vacancies and historically low interest rates, which the Reserve Bank recently highlighted will likely remain for at least the next three years, along with the range of government grants currently available, has seen first home buyers come out in force, allowing our capital city property market to continue to transact.”