- Over the past two years, Southeast Queensland has recorded super-strong price growth
- More stock on the market
- First home buyer activity has declined
Moderating market conditions have arrived in the southeast, which was expected because of the super-strong price growth we recorded over the past two years.
However, we are not seeing the significant drops in prices experienced in Sydney and Melbourne because our market still has more reasonably priced real estate than in southern states. In addition, we are still receiving the lion’s share of interstate migrants.
There are always opportunities in every market cycle, including the current one, because there are generally fewer active buyers around at present; plus, we have seen an uptick in the volume of listings hitting the market.
Opportunity awaits
Savvy homebuyers and investors have more properties to choose from now and fewer people to compete against to successfully purchase a new home or investment property.
Of course, this is the polar opposite of last year when we had a record number of homebuyers in the market, with some getting a little too emotional and offering ever-higher prices for property.
Investors mostly stayed on the sidelines last year because some paid prices didn’t stack up to further investment scrutiny.
However, we are seeing more investment activity since this year’s start now that this demand level has dissipated.
Investors have long been attracted to the southeast because of our more affordable real estate and attractive rental yields.
This is undoubtedly the case, given asking rents have increased by double-digit percentages over the past year, mainly because of the low vacancy rates impacting the southeast’s rental market.
Educated investors also recognise the long-term benefits of owning Sunshine State real estate.
First home buyer activity
New research recently also found that first home buyer activity fell below the decade average in July.
The Australian Bureau of Statistics Lending Indicators for July showed that the number of new loan commitments for first homebuyers was 8,338 – falling below the decade average of 8,787 nationwide.
Analysis of the latest ABS data also shows that the number of new loan commitments for first homebuyers has fallen about 48 per cent since its peak in January 2021.
With far fewer first home buyers in the market compared to last year, it stands to reason that prospective property owners are at a distinct advantage compared to the previous two years – especially in Southeast Queensland, where property prices are more affordable than elsewhere.
Also, first-time buyers are the least likely to be impacted by any lending challenges in the current rising interest rate environment because they don’t already have significant borrowings.
This means they are in the box seat to potentially purchase a home or investment property when many buyers are waiting and watching to see what happens next.
That’s why I believe the current market conditions offer plenty of opportunities for all buyer types, with the savviest making their moves now.
