Hungry buyers return to the market as the year starts positive

This is good news for sellers because it looks like home values will continue on a positive trajectory through the rest of the year.

Brisbane’s property market was slow and steady in 2019, but prices have been steadily rising since May of last year. However, the final three months of the year showed more sustained growth with property values rising 1.1% in the final quarter according to data from CoreLogic.

The surge in growth is being driven by a couple of factors. There was a significant rise in home completions in the second half of 2019, with the number of completions up by 3%. Furthermore, the re-election of the coalition government has seen interest rates cut and a loosening of lending criteria by the Australian Prudential Regulation Authority (APRA).

When combined, these changes have seen a significant shift in buying behaviour. People are definitely in more of a buying mood than they were six months ago. With buyer confidence one of the biggest drivers of property values, it is no surprise to see home values starting to move in a positive direction.

To highlight the change of buying behaviour, one five-bedroomed home in Tarragindi, put on the market in early January, attracted more than 80 viewings in its first week. Another home, this time in Kelvin Grove, saw 90 viewings in the first two days, with 10 offers made during the first open home.

And it’s not just newly listed homes which are benefiting. One home in Rode Road which has been on the market for more than two months saw 21 groups come through the door on its open day at the start of January. That is close to the number which viewed the home when it was first listed back in October.

The rise in completions was driven by several major projects which came on the market in early 2020. The biggest of these is the Howard Smith Wharves and Queens Wharf projects, both of which offer plenty of affordable housing compared to cities such as Melbourne and Sydney.

Affordability is one of the reasons why the Brisbane market looks set to be one of the best performers of 2020. Data from Michael Matusik shows that the current price to income ratio of a home in Brisbane is 5.3 times the median house price of $524,000.

This shows excellent value when compared to other cities including Melbourne (8.4 times income) and Sydney (10.80 times income). The greater affordability of Brisbane has seen buyers migrate from Sydney to seek greater value for their home-buying dollars.

With several developments moving towards completion across the city there are several suburbs which could outperform this year. Greenslopes, located around 5km south-east of Brisbane, is one suburb to keep an eye on this year. This is an area I know well, as it’s where we're located. It is a beautiful area with excellent transport connections to the city and a selection of good schools.

There are several exciting new developments in Greenslopes, including the Magnolia Residences by Summerlin Banyo, offering a collection of 2 and 3 bedroom homes with prices starting at just $426,000.

Any suburb that falls within a good school catchment area should also perform well in 2020. Brisbane State High School is regarded as the best public school in the city, so any suburb which falls within its catchment area should perform well. Such suburbs include Highgate Hill, Dutton Park, West End and parts of Woolloongabba.

Mansfield State High School is another popular school in the city, with MacKenzie, Mansfield and parts of Burbank falling within its catchment area. Those seeking a quieter life away from the hustle and bustle of the city may prefer to live close to Indooroopilly State High School. Auchenflower, Taringa, Toowong, Indooroopilly, St Lucia, and parts of Chelmer all fall within its catchment area.

Most Brisbane buyers know to check for flooding risk and to obtain an RP Data valuation before making an offer on a property. However, you should also check if your new property is affected by updated flight paths for Brisbane Airport's new runway.

The new runway, which is set to open in the second half of 2020, is certainly a boost for the city's connectivity, but it poses problems for homes which fall under its flight path. Some of Brisbane's most prestigious inner-city areas are affected by the changes including East Brisbane, Hamilton, Bulimia, Cannon Hill, Seven Hills and New Farm.

This guide from the Brisbane Airport Corporation shows areas which are affected by the proposed flight path changes.

It is difficult to say how property prices will be affected by these changes, but it is good practice to check if a property falls under the new flight paths before making an offer. At the very least, buyers may want to negotiate the price of double glazing as part of the deal.

If you would like more information about the homes we have for sale in the Brisbane area, or would like to know how much your current home is worth, get in touch with me, Mathew Griffin, at Sparrow Real Estate. You can give me a call in the office at (07) 3054 7050 or send me an email at matthew@sparrowrealestate.com.au.

As one of Queensland's most experienced and respected real estate agents, I always have plenty of beautiful homes for sale in the Brisbane area. I can also provide you with an accurate valuation of your current home within 24 hours should you wish to sell.