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Some of it realised by selling, some people used their equity to buy more assets, and some decided to stay put and renovate.
What fuelled this? Low interest rates, fiscal stimulus and FOMO.
There was 21.6% growth overall in property in Australia, second only to the late 80’s of 31.9%. For those that can remember, we were paying 17-18% interest rates.
Brisbane has received 24.8% overall growth in house prices, with the Western suburbs achieving a whopping 29.2% growth in homes and 10.4% in units. The average time on market this year was 22 days; many homes were sold off market and lots of new records set.
Sydney and Melbourne have started to slow, but Brisbane should power along in 2022 with a 9-10% increase. We have affordability, low levels of supply and high demand. Interest rates are low, we have strong employment prospects with lots of infrastructure and development, and also robust interstate migration of 35,000 pa moving to Queensland to enjoy our liveability.
Investors are out there hunting in Brisbane, which should see growth in the unit market pick up. Gross yields in Sydney are 2.4%, Melbourne 2.7% and Brisbane 3.9%, so once again value is the driving factor.
Historically Brisbane has always been behind Sydney on average house prices. Our last growth spurt was seen in 2007, where we came within 10% of Sydney’s average price. We now have a gap of 50%. Sydney home owner’s wages spent on loan serviceability is 49.1%, Melbourne 41.2%, and Brisbane 32%.
With the 2032 Olympics in the mix, interesting times lay ahead for us in Brisbane.
It was reported interest rates will rise in the short term, but CBA is forecasting late 2022 and the other majors are predicting early 2023 with RBA firm on late 2023. The Reserve Bank will be very careful with interest rates largely because of debt levels with homeowners. This will also be the case with political parties, ahead of next year’s election.
If you own property in Brisbane, it is SAFE to say in the next 12 months there will be some growth. We look forward to seeing Brisbane continue to grow in 2022.