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Millennials driving new-found optimism in housing market

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Millennials driving new-found optimism in housing market

HOME hunters have singled 2018 out as the year they will finally make a move on the housing market, with Millennials driving the newfound optimism.

A NEW wave of optimism has hit the housing market, with Aussies singling out 2018 as the year they’ll finally chase down their dreams of property ownership — and Millennials are leading the charge.

A national poll has revealed two in five people believe it is a good time to buy a home amid rock bottom interest rates, less competition from foreign buyers and a national cooling in house prices.

Nearly a third of those surveyed plan to buy property this year, whether upsizing, investing, moving to a new area or buying their first home, according to the YouGov Galaxy Poll commissioned by Realestate.com.au.

Millennials have driven much of the new-found optimism, with more than half of those born between 1983 and 2000 planning to pull the trigger on a home purchase.

Millennials are driving new-found optimism in the housing market, a new poll has found.

Millennials are driving new-found optimism in the housing market, a new poll has found.Source:Supplied

Realestate.com.au head of home loans Andrew Russell said the increased optimism was the result of a shift to more stable price movements amid a low interest rate environment.

“With a lot of the recent commentary talking about a slowdown, some buyers may be looking at the market and thinking it will be a good time to buy,” Mr Russell said.

Activity on Realestate.com.au’s home loan platforms showed confidence was at a high among one group in particular, he added.

“Excitement is coming from all categories of buyers, but especially first homebuyers,” Mr Russell said.

 

A national poll has revealed two in five people believe it is a good time to buy a home. Image: AAP/Sam Mooy.

A national poll has revealed two in five people believe it is a good time to buy a home. Image: AAP/Sam Mooy.Source:AAP

“It shows that the dream of home ownership has continued to grow and first homebuyers are more confident they can achieve that dream than perhaps they were in years past.”

Canstar financial services expert Steve Mickenbecker said some homebuyers may had spotted a rare gap in the market.

“Rates are at rock bottom, are likely to stay low for some time and prices are down in some areas so you’ve got a lot of people saying ‘now’s our chance’,” Mr Mickenbecker said.

“Investor participation is down too and there are less foreign buyers in the market so some (house hunters) may feel there’s more space for them.”

Canstar financial services expert Steve Mickenbecker.

Canstar financial services expert Steve Mickenbecker.Source:Supplied

Brisbane couple Matt Brandon, 31, and Alice Tidmarsh, 27, have just bought their first home together and are feeling positive about their decision.

“With interest rates low and the first homeowners grant still available, I think it’s a great time to get in to the market,” Mr Brandon said.

The Millennials have purchased a new townhouse in a residential development in Cannon Hill and will be paying only $25 more a week than they currently are renting.

“Our plan was to buy something new and live in it for one to two years,” Mr Brandon said.

“We would like to build a portfolio in the future.

“This isn’t going to be our last home — it’s a stepping stone.”

Aaron Woolard of Place Estate Agents said about 80 per cent of his clients were Millennials renting in the trendy, Brisbane inner-city suburbs of New Farm and Teneriffe, who were now looking to buy there.

Mr Woolard said Millennials were willing to spend up to $1 million to get into those suburbs, even if it meant taking on a bigger mortgage.

“Most people I talk to want to get into the market and invest wisely,” he said.

“They have drive and ambition to reach their goals, and one of those is property.”

Mr Woolard said he had also noticed an increase in the number of young people wanting to take advantage of the extension of the Queensland First Home Owners’ Grant to June 30 this year.

New research has found a new wave optimism in the housing market in 2018. Photo: Jodie Richter.

New research has found a new wave optimism in the housing market in 2018. Photo: Jodie Richter.Source:News Corp Australia

The research surveyed more than 1000 people across the country under age, gender and regional quotas reflecting ABS demographics estimates.

The survey also included a mix of renters, adult children living with their parents, mortgagees and those who owned their properties outright.

With less barriers to potentially shut buyers out of the market, those with property ambitions said lofty prices would likely be their biggest obstacle.

More than half of respondents (53 per cent) said high prices would be the factor most likely to derail their property goals for the year, followed by not being able to borrow as much as they would like (30 per cent).

To combat those challenges, 84 per cent of Australians were prepared to make sacrifices to get into the market.

That percentage rose to 94 per cent for Millennials, who were more likely than Baby Boomers and Gen Y buyers to forgo luxuries such as a new car, overseas travel and new clothes, among others.

“Young people are determined to get into the housing market,” Mr Russell said. “They realise how much a home loan will impact their lives and they’re willing to make sacrifices.”

WHAT MILLENNIALS WOULD SACRIFICE FOR HOME OWNERSHIP:

— New car 62%

— New clothes 58%

— Eating out/going to movies 56%

— Domestic holidays 50%

— Overseas holidays 68%

— Private health insurance 36%

— No sacrifice 7%

(Source: YouGov Galaxy poll)

Originally published: brisbaneinvestor.com.au

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Opinion

How much does it cost to buy property at Australia’s best beaches?

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How much does it cost to buy property at Australia’s best beaches

Winter is coming, the property market is cooling and hot summer days spent at the beach are becoming a distant memory.

But dreams of a sea change could still keep you warm for months to come and looking to one of Australia’s coastal markets now could have you sitting beachside by summer.

The location of that home and beach will depend on your budget. Here’s what it now costs to buy in some of Australia’s top beach locations.

$2 million+

If you’ve got serious cash to splash, then real estate by Sydney’s Bondi Beach — arguably Australia’s most famous strip of coast — could be within your reach.

With a median house price of $2.675 million and a median unit price of $1.2 million, buying into the beachside suburb does not come cheaply, but it’s more affordable than Sydney’s other top beach contender – Manly.

How much does it cost to buy property at Australia’s best beaches 1

While house prices in the northern beaches gem dropped 11.5 per cent in the year to March, according to Domain data, the median house price still sits at $2.955 million. Meanwhile, the median unit price dropped 3.7 per cent to $1.315 million.

If Sydney’s not your cup of tea, you can cast your gaze west, far west to the other side of the country, where you’ll find the turquoise water and white sand of Perth’s Cottesloe Beach.

Despite  Perth’s market downturn – house prices are down 14 per cent and units down 16.6 per cent from the 2014 peak – Cotto will still set you back a pretty penny, with a $2,147,500 median house price. Units are more affordable with a median of $780,000.

How much does it cost to buy property at Australia’s best beaches 2

$1 million+

Northern NSW and south-east Queensland offer up the top rated beaches in Australia for those looking to spend about $1.5 million or less.

Byron Bay, Noosa and Surfers Paradise have long been favoured spots for holidaymakers and are increasingly attracting people looking to make their favourite vacation spot their hometown.

While about half the out-of-towners snapping up real estate in popular Byron Bay were once only looking for a holiday home, that’s no longer the case,  said Ian Daniels of McGrath Byron Bay

“Half the houses were holiday houses before, now you can see how many more people are living here,” Mr Daniels said.

How much does it cost to buy property at Australia’s best beaches 3

Byron Bay has the highest median house price of the three at $1,562,500. It’s followed by Surfers Paradise and Noosa Heads, with respective medians of $1.55 million and $1.145 million. Meanwhile, the median unit price is $850,000 in Byron Bay, $890,000 in Noosa Heads and $380,000 in Surfers Paradise.

Mr Daniels said there had been “no let up” during cooler winter months in recent years, but noted buyer demand could be a little weaker this year due to the broader property market downturn.

While there tended to be less stock in winter, Mr Daniels said, it could be a great time for both vendors and buyers to be on the market because there was less competition.

How much does it cost to buy property at Australia’s best beaches 4

$750,000+

The Sunshine Coast and Gold Coast are again the best beachside bet for buyers in this price range, with Burleigh Heads and Mooloolaba offering house prices of $865,000 and $837,500. Unit medians sit at $535,000 and $424,750.

While investor activity has dropped off, Josh Willatt of Ray White Robina said, there is still good demand from locals and buyers looking to make a sea change.

“We’re still seeing buyers come up here in droves from Sydney and Melbourne … and we also see good inquiry from Brisbane, ” Mr Willatt said, adding they were drawn to the area for its great beaches, strong village atmosphere, restaurants and cafes.

How much does it cost to buy property at Australia’s best beaches 5

Mr Willatt said the Gold Coast and south-east Queensland was still extremely affordable for what it offered. He noted buyers had more choice in late winter and spring as more stock hit the market, but that there was still a steady stream of buyers over the cooler months as the market was less seasonal than others.

$500,000 or less

Buyers who want to purchase near a well-known beach for less than $500,000 should cast the net wide, looking to Broome,  Darwin and Victoria’s Phillip Island. However, swimming year round won’t be an option, due to cold temperatures in some cases and box jellyfish in others.

For $494,500 you can buy a house by Cable Beach in Broome, or an apartment for a little under $300,000.

Apartments near the famous Mindil Beach Sunset Markets in Darwin have a median of about $380,000 as do units in the suburb of Cowes, near Kitty Miller Bay on Phillip Island.

How much does it cost to buy property at Australia’s best beaches 6

Michael McLeod of First National Phillip Island said those looking to buy on the island might be best doing so in winter.

“[Island living] is not all glamour, there is rain,” Mr McLeod said. “We’re still quite consistent in winter, [but] there’s fewer people around and [buyers] have the time to make decisions.”

“The time a property is on the market [varies greatly] … when it’s extremely busy places can be snapped up … or we have things that can take two years or a year to sell,” Mr McLeod said.

While retirees cashing out of Melbourne still make up a bulk of the population, Mr McLeod said, a growing number of younger families were moving to the area and commuting to Melbourne or working remotely.

Source: goldcoastinvestor.com.au

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Opinion

How good an investment is south-east Queensland

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How good an investment is south-east Queensland

Why do we believe we’ll see increasing investor interest in this market? Strong population growth, a diversified and growing economy, and substantial investment in infrastructure should combine to boost demand.

We expect that these factors will swell the number of white-collar jobs – increasing demand for office space, which in turn will push down vacancy rates and raise rental incomes. This should be good news for office property investors – especially those like Centuria Metropolitan REIT (CMA) that are already well-positioned in the market.

A significant and growing population

South East Queensland (SEQ) stretches from the Gold Coast up to the Sunshine Coast and across to Toowoomba in the west. As Australia’s third-largest population zone, the region has been growing significantly, particularly Brisbane and the Gold Coast. Interstate migration figures show a pattern of steady net migration, with Queensland the only Australian state with consistent net inflows of people from other states. In the five years prior to the 2016 Census, over 220,000 people moved to the Sunshine State – mainly to SEQ where nearly 90% of population growth occurred. This is important for property investors because of its implications for demand, but the trend is interconnected with other favourable factors.

A diversified economy poised for growth

Queensland’s economy is diversified across a range of industries including agriculture, resources, construction, tourism, manufacturing, and services. Over the past two decades, its economic growth has consistently exceeded the national average – and in our view this is likely to continue.

The resources sector is gaining momentum, and a significant pipeline of major infrastructure and development projects is helping propel economic and jobs growth, in turn increasing interstate migration and driving demand for both residential and commercial property.

Investment in infrastructure

A strong infrastructure program delivers more than business and consumer amenity – it generates jobs, drives investment, and facilitates population growth. The pipeline of infrastructure and development projects announced in the past few years is likely to have a material impact on the region – substantially improving its accessibility and amenity – most notably, Brisbane’s Queen’s Wharf precinct and the Cross River Rail.

Queen’s Wharf, touted as a “world-class entertainment precinct”, is an integrated resort development costing $3.6 billion and covering over 26 hectares with retail, dining, hotel and entertainment spaces. As Queensland’s biggest ever tourism project it will be a game-changer for Brisbane, attracting overseas as well as local visitors.  Estimated to contribute $1.69 billion annually to the economy, it will employ more than 2,000 people during construction and an estimated 10,000 once operational.

The Queensland Government’s number one infrastructure project, the $5.4 billion Cross River Rail, comprises a new 10.2km rail line between Dutton Park and Bowen Hills, which includes a 5.9km tunnel under the Brisbane River and CBD. It’s the first major rail infrastructure investment in the inner city since 1986 and is set to generate urban renewal, economic development and the revitalisation of inner-city precincts.

Outlook for commercial office property investment

These factors indicate a region poised for growth – and for growing commercial property demand. CMA’s portfolio has a significant exposure to the area in general (six SEQ assets with a combined book value of over $480 million), with many of the individual assets located in those parts of Brisbane set to benefit most from these developments.

Our view is that Brisbane office markets, where five of CMA’s assets sit, are continuing to improve, with vacancies hitting a five-year low – indicating increasing tenant demand – and continued yield compression, demonstrating strong investment demand. Office sales hit the highest level in a decade during 2018 (at $2.35 billion), increasing 60% from 2017.

With the strong outlook for SEQ, we expect the region will continue to attract tenants and investors alike.

Source: brisbaneinvestor.com.au

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Queensland’s 100,000-property public housing shortfall revealed

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Queensland's 100,000-property public housing shortfall revealed

Queensland has a severe shortage of social and affordable housing, an issue that is projected to get worse by 2036 according to new research.

More than 102,000 additional social houses are currently needed across the state, and 54,700 affordable houses are also needed with nearly 13 per cent of Queenslanders spending more than 30 per cent of their income on rent.

By 2036, Queensland is projected to need 254,300 more social and affordable houses – the second-highest unmet need behind NSW, the report found.

The new figures come from a UNSW City Futures Research Centre report on social housing shortfall across Australia.

Regional social housing shortfalls are higher than in Brisbane, the data shows, but Brisbane residents are slightly more likely to be spending more of their income on rent.

Housing Minister Mick de Brenni said housing affordability was a “big issue” for Queensland.

“Through the Palaszczuk government’s $1.8 billion Queensland Housing Strategy, Labor is driving key reforms and targeted investment across the housing continuum,” he said.

“The Strategy commits us to build more than 1000 affordable homes for Queenslanders, as well as a further 4522 new social homes to help ensure everyone has a safe, secure and stable place to live.”

Lead researcher Laurence Troy said 22.5 per cent of Australia’s entire housing growth must go to social housing to meet demand into the future.

“Our analysis shows that the sheer number of households in rental stress across the country means that if we’re going to meet the need, at least 12 per cent of all our housing by 2036 will need to be social and affordable housing – which is a very reasonable ambition in global terms,” Mr Troy said.

“To cover the backlog of unmet need and future need in Australia two in 10 new homes will need to be for social housing over the next 20 years, and a further one in ten for below-market affordable rental housing.”

Mr Troy said the research’s financial modelling found the “best and cheapest way” for governments to meet the need for social housing was to fund it through upfront grants and low-interest government financing.

“Delivering below market rental housing through the not-for-profit sector, as opposed to the private equity model, will save $3 billion a year by removing developer mark-ups and shareholder returns,” he said.

The financial modelling was commissioned by the NSW community housing sector.

Mr de Brenni said the state government was “listening” through its recent public consultation on rental reform and was committed to investing in affordable housing in partnership with community housing, to provide more subsidied homes for low income earners.

“We heard Queenslanders are struggling to afford rental properties in the suburbs close to where they work,” he said.

“Through our Build-to-Rent pilot project, we are seeking to work with the private sector to increase the number of long-term, affordable rental properties for low to moderate income earners, including key workers in health, early childhood and hospitality.

“Internationally, the Build-to-Rent model is delivering fantastic outcomes and facilities for tenants and we’re looking to see what the market is open to delivering here.

“The pilot, if it proceeds, will see $70 million invested towards delivery of hundreds of affordable rental properties for key workers in inner-city areas where affordability has been identified.”

Mr de Brenni said the registrations of interest for that pilot had seen strong market interest, and the department was considering the responses before calling for expressions of interest.

Source: brisbaneinvestor.com.au

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