It would appear we’re in for a wild ride – which way depends on who you are talking to.
Isn’t it fascinating that only weeks ago the media reporting on the property market was all doom and gloom and now it’s all zoom and boom. But where are we really and what’s going to happen in the next couple of years? More importantly what does that mean for you?
In the last few days we’ve seen a stern caution by the RBA on an impending housing bubble if we fail to add more dwellings to increase supply and avoid a run up in prices. The reality is the circumstances for upward pressure are already in place.
Focusing on the SE QLD market, we struggle to see how housing will become more affordable in the short and medium term than it is now. Already in undersupply and with approximately 750,000 new people making home in SEQ by 2031 we believe the SEQ Regional Plan is fundamentally flawed in forecasting more than 50% of that growth to be housed in infill developments (medium and high density). While we can ‘hope’ (and hope is not a strategy) that there will be an increasing desire for people to actually want this type of accommodation (not just forced to by price point), there are great challenges in delivering the required volume given the associated upfront infrastructure costs, site availability, assessment and approval delays and other regulatory costs.
Likewise the cost of new land, the charges imposed by State and Local Governments and the limited supply of englobo land that can actually be delivered to the public (which we believe is significantly less than what the Government has indicated in their ‘broadhectre land study’) significantly constrain supply.
While the media was promoting the doom and gloom, the underlying fundamentals have continued to provide upward pressure on prices as shown in the latest reporting (such as the House Price Index – on which we will have more to say later). It would appear that the media has finally caught onto what most of the industry experts have been saying for some time.
So what does this mean for you? Is now the right time to invest in property? Should you buy and hold, build, flip … what is best?
We believe you should discuss the short, medium and long term prospects of the market in light of what you want to achieve in the long term and develop a Strategy that is appropriate for YOU. A ‘property coach’ is a great place to start – and that’s what we do.