A MESSAGE FROM PAUL HUGHES
Brisbane’s housing market has proven relatively resilient so far in 2022, with prices only just starting to cool slightly in some areas after the phenomenal growth of the past couple of years.
With the lowest cash rate on record at 0.1% finally being increased by the Reserve Bank of Australia (RBA) in May, we have seen an immediate shift in buyer sentiment and affordability. We are now experiencing a change in the marketplace, and 7 rates rises in a row is taking its toll (2.85% at the
time of writing), and Reserve Bank Governor Philip Lowe has warned Australians there are more interest rate rises ahead. Housing values are likely to continue trending lower until interest rates find a ceiling.
The most significant factor influencing the RBA’s decision to increase rates has been the increasing rate of inflation. The past four quarters have seen strong quarterly rises off the back of higher prices for new dwelling construction, automotive fuel, and
food amongst other things. The latest data from the Consumer Price Index (CPI) has seen a 1.8% rise in the month of October alone and a 7.3% increase over the last 12 months, which is the highest annual increase we’ve seen since 1990, which along with the higher cost of borrowing is putting the squeeze on household budgets. Looking only at Brisbane, inflation is at 7.9% over the same period, which is a little higher than the weighted national average.
Tenants are battling one of the strongest landlord markets in over a decade after rents soared to new heights for both houses and apartments. Rental returns and record low vacancy rates have created huge competition for tenants.
Despite rising interest rates and the current cost-of-living crunch, demand for property in our region is still high, driven both by locals and by interstate tree-and-sea changers seeking the lifestyle benefits our city has to offer.
This trend, which is set to continue, combined with the extensive infrastructure and development plans for 2032 Olympics, underpins expectations for continued growth throughout much of the region in the coming months and years.
However, to get a real feel for our local market and identity where the best opportunities lie, it’s also important to understand the wider real estate landscape.
This report looks at four key trends across five of our capital cities, unpacking the performance of the residential property markets in Brisbane, Sydney, Melbourne, Canberra & Hobart. It also shares John McGrath’s much anticipated property hotspots and top picks for buyers and investors.
As we move on from the pandemic years and steer our way through the new economic challenges facing us, we may find surprising opportunities arising as lifestyle choices, working habits, and design trends reshape and redefine many aspects of our property markets.
I hope you find this an insightful and valuable report.
Let me know if there is anything I can do to help. I would love the opportunity to assist.
Yours Sincerely,
PAUL HUGHES 0450 605 375 paulhughes@mcgrath.com.au
