Brisbane Property Market Update – July 2019
The Australian property market is a very interesting space. What is currently happening on the ground in the Brisbane market. What do things feels like, what kind of deals are we seeing and what is the sentiment like?
0:00 – Introduction
1:12 – What has been happening in Brisbane lately
2:49 – What pockets of Brisbane are doing well?
3:56 – Has there been a change since the election?
6:24 – How days on market and average vendor discount has been changing
7:46 – It is VERY suburb situational
8:52 – Brisbane doesn’t feel like it’s about to skyrocket
9:52 – Are really good discounts still available?
11:43 – More sophisticated investors are coming into the market
12:43 – Looking at some indicators and predictions for Brisbane
16:30 – Make sure you do your own research
17:10 – Some beachside suburbs are 15-30c on the dollar compared to beachside suburbs in Sydney
the Australian property market is in a very interesting space where we’ve started to see some growth in capital cities lending has eased up it’s a really exciting time at the moment and I often do reviews of how Australia is going but what I wanted to do today is actually look at how is the Brisbane market going talking to Ben Everingham who’s the owner and a buyer’s agent here over at pumped on property who helps people invest in the Brisbane property market so to talk about on the ground what things feel like how things are going because we can look at high-level statistics and averages for Brisbane as a whole but let’s get more granular today and look at ok what’s happening on the ground in the Brisbane market what kind of deals are we seeing what’s the sentiment like and that sort of stuff so really excited to have this conversation today I love this stuff man this lets me get my cake on plenty then sprang out today yeah so Ben is an absolute stats nerd and loves working at that sort of stuff but also has himself and the team on the road talking to agents every single week inspecting multiple properties every single week purchasing multiple month for clients as well so really knows the prism market inside and out so what has been happening in Brisbane lately I guess leading up to the election and these changes and then now since RBA dropping interest rates lending getting a bit easier liberal obviously getting in how has that sort of change things so embracement at the moment we’ve made we’ve noticed a bit of a turn in sentiment it’s nothing to go you know to the races we’ve tied thing it’s nothing crazy but it is definitely a bit of a turn and as you said it’s a result of Oprah relaxing lending policy and the big banks rolling that out it’s a result of cheaper money it’s a result of some helicopter stuff that’s going on at a high level at the moment and it’s just a confidence I suppose because for the first time in a year and a half or two years Sydney and Melbourne prices didn’t decline this month you know at the same rate that they had been so it’s kind of just slowly slowly people I think of realising that maybe some of the worst is behind us for at least this little pocket of the cycle so it’s been really interesting looking at the Australian market so Brisbane didn’t have the same run-up that Sydney and Mel been had but Brisbane has I guess been declining for the last few months and we’re seeing that across Brisbane as a whole or their pockets where that’s not the case or pockets where it’s worse yeah so that’s really good point because as we know there’s no one market there’s pockets and then suburbs within those pockets and straits but Brisbane as a whole is declined by to 2.9 percent in the last 12 months according to court logic but Brisbane is also cheaper to buy than it was in 2008 according to court logic right now like this think about that it’s cheaper than it was before the last GFC but over the last 50 years it’s done an average of 9.5% in years so kind of makes me excited in terms of the pockets that are doing well we like East Brisbane we like Brisbane CBD and we like Brisbane north and the suburbs that we’re targeting in those areas are all increasing in value right now so some of them are increasing in value by just 1% a quarter some of them have going nuts like 3/4 percent growth a quarter right now which is you know setting up the 10% bust growth years you know well that’s uncertain that’s speculative and that’s not long-term but some suburbs that we’re buying at the moment are freaking hot like food properties are selling in 1 to 2 days if they’re even coming to the market you know if 50% of what we’re buying pre market well you’re saying you had a bunch of offers on properties last week and only a couple went through because other people overpay for them compared to what you are willing to pay for yes so there’s plenty of people coming up from other states other buyers agents and then just the mums and dads that want to learn closely with a city or on the beach and those people are paying you know on on average like I’m seeing some of them page when he grand more than we would others are paying like literally 50 60 70 grand more than we would for the same property it’s crazy so have you noticed a change since the election like leading up to the election in terms of sentiment in Brisbane versus post election yeah so pre election you know like any federal election that’s always going to slow down even if we’re in the best economic environment a lot of people just wait that’s completely natural that’s cool like this is the third election that I’ve seen that happen and it generally starts almost a year out even which becomes a huge buying opportunity if you don’t think you know to look for that part of the cycle but you know it’s just a whole combination of things it’s like an election it’s Sydney and Melbourne not declining it’s easier cheaper money and I think you know that word slowly starts to go around that hey things aren’t as scary as today tonight made me feel they were a year ago or you know hey I’m not losing money on my home and Sydney any anymore or in fact in some suburbs prices are already rebounding so you know it’s just just interesting I think it’s like like you and I have talked about it’s not only these crazy rush a little wave of growth but I think we’ve actually turned the bots turn the bottom in terms of supply and demand and I honestly feel like we’re on the upward trend but generally that trend takes you know 18 months to two years to wash in a really strong price growth yeah and that’s something that I noticed I remember when Sydney was growing crazily I started to see the numbers that I look at when I’m researching a suburb move in a downwards trend wait for prices but I was like okay it’s moving in a downward trend I think Sydney may have peaked and that was in February of 2016 I think I started to see those numbers changing and then Sydney ended up peaking in September of 2017 so about 18 months later it’s crazy like anyone that followed the Bitcoin thing you know it was at 17 I was at 18 that was the end of 2017 yeah you know why I bring this up in a property video is bitcoin was a full real estate cycle in nine months it went from top or bottom to absolute top speculative way pass what the top should have been and then massive correction and now it’s obviously going through another wave again so it’s like that’s cool to observe because if you look at the one-year chart in 2017 for Bitcoin that’s what a full real estate cycle looks like over 20 years and maybe more extreme because a Bitcoin went up so much and then dropped 80% we’re unlikely to see property market you know in terms of Brisbane like events there’s some underlying factors that we look at now one of them is days on market days on market in some pockets Brisbane have actually increased days on markets in other areas of decrease now when it’s declining it means that demand is getting tired yeah because properties are selling faster that sort of means they’re coming onto the market and they’re disappearing from the market faster because people are snapping them up another one that we look at is you know average vendor discount so the higher the discount the softer the market is the smaller the discount the tide of the market is and then we look at Diaz asks for as well which is the demand to supply score and in some suburbs in Brisbane we’re buying post-election I saw Diaz I scored shoot Hut by 16 to 22 points in literally two weeks really crazy man like crazy amount of extra pressure then you start looking at real estate calm now they do average number of views for the suburb compared to the state and they put it in like low medium high very high and every suburb that we’re buying in now is well above the state averages in terms of number of news per listings so there’s all these little leading indicators which is Ryan said might not translate into that short-term price growth declines or increases but it just starts painting a story well in advance but it also sounds like it’s very suburb situational oh yeah though you’ve got some suburbs in Brisbane that are hot and you’ve got some that aren’t and I know the same is happening in Sydney and the same is happening in Melbourne where certain suburbs are growing whereas the other suburb is still continuing to go backwards absolutely and so I guess yeah are you seeing that in Brisbane where some suburbs are hot and are you can you identify suburbs that that are not oh yeah you know pretty much anywhere in South Brisbane or West Brisbane is cold right now like if we’re talking about massive generalizations where some of the suburbs in North Brisbane and around the CBD would be what I’d classify freakin hot right now yeah and so you know it’s nice to be in a market place where everything is increasing at the same time and you get that rising tide lifting all the boats like we saw in Sydney and Melbourne between 2013 and 2006 then but we’re nowhere close to that right now in Brisbane quality suburbs with quality infrastructure and jobs and quality locations that people leave already going flat or they’re starting to just increasing so it doesn’t feel like at the moment Brisbane as a whole is just going up or about to skyrocket it’s like okay Brisbane feels as like a stable market there’s some really positive indicators but it’s very localized in certain areas and certain suburbs whereas other suburbs that’s not really happening and what we’re noticing is that some of the more affordable suburbs right now are the ones that are actually seeing the price road some of the more expensive suburbs in Brisbane we’ve seen 50 up to $150,000 discounts on those properties in the last 13 months so that higher end of the market seems to be worst hit by this credit crunch that we’ve just gone through and those particular types of investors haven’t been in the market yeah so you know my business I suppose is a really really specific gauge of what’s going on with the market in terms of sentiment because we’re talking to sixty or eighty people a month yeah and you know negotiating with real estate agents as well you’re actually doing deals every single month it’s I had very sensitive end of the scale so another last couple of months I guess it was probably pre-election you were getting stuff at a really good discount with we showed people through that house that was purchased under land value effectively that had granny flat potential as well just a really nice property that one of the clients was able to pick up he’s still seeing those opportunities or is it feeling like the markets hotter see you don’t really have that negotiating power no we’re still seeing those types of opportunities because as I said 50% of what we’re saying is pre market off market so those opportunities are still coming through but just the number of them like you know three months ago I might have been able to go to the beaches and find in one month three properties below land value now it might be once every three months you know it mean like that opportunity and that window is closing because more people are getting sensitive to hey when there’s this kind of underlying feeling that we’re past the worst in a way and I’m noticing that like when I’m speaking to people for example in my business for a lot of 2017 and 18 the types of people were helping with first-time buyers families buying their first investments now pretty much every person booking a session with me is between one and ten properties and is sort of really on that okay we’ve been waiting on Brisbane for seven or eight years we know that that window of opportunity to get in is closing and a lot more sophisticated people coming out the woodwork again yeah and that says to me that there’s a confidence that the average person hasn’t yet priced into the market that more like people that are further along like myself like I’ve been buying like a madman for the last two years because I thought it was the best opportunity and for the next year and a half I’ve continued to buy but then after that it’s going to get increasingly difficult to buy the right price point yeah so just some really interesting insights into Brisbane there obviously this is a less data heavy episode where we’re looking at the exact data of the resume or talking about okay what sentiment like on the ground what sort of things are we saying and I thought was really interesting that through your business as a buyer’s agent you’re starting to see there’s more sophisticated investors coming in and be like okay I’m ready to buy there’s been now confidence is back so I’m like happy to move forward whereas before everything was so up in the air and so obviously we don’t have a crystal ball anything it could happen this isn’t financial advice saying you should definitely invest in Brisbane obviously it depends on your strategy depends on where you’re at depends on what you’re trying to achieve as well and as Ben was saying there’s some pockets that are doing quite well and there’s other pockets that are doing poorly so we’re definitely not saying Brisbane as a whole it’s just skyrocketing right now because that’s not realistic in a a failure and I think people listening to this will know that we’ve talked about that enough that let’s let’s talk about a few of the indicators because this month the is shrapnel has says Brisbane is at 6 o’clock it’s at the actual bottom of the marketplace right now which you don’t have to be a rocket scientist I understand that the sort of time that you want to be really looking at a market it’s been downgraded from it was it actually got pushed up to rising market a few months back remember I went to 10 o’clock no and then it and then it went back down to started for cavalry again at 8 o’clock and now it’s dropped again so take that sort of stuff with a grain of salt Tim lawless every single month from poor logic is the you see the director there I think so yeah he’s always sadly hiding Christmas he’s always saying you know brisbin’s gone down but basically I don’t understand why because the fundamentals in Brisbane look strong affordability is so much higher in Brisbane than Sydney and Melbourne incomes a good infrastructure growth is there population growth is there you know on the ground like we’re bumping into some more of the buyer’s agents you know these are the guys about their offices in Sydney in Melbourne and that sold people Sydney in development in 2016-17 2018 finally people in 2019 when I’m not paying you any more money to buy me as the client W so all of these buyers agents are starting to come over the border you know I was if I was on the phone or not on the phone but will physically an inspection two weeks ago a buyer’s agent from Melbourne called up the agent and said to the agent does the property look good to the person selling it and I heard the engine go yes it looks good and then that buyer’s agent paid fifty five grand more for the property than we would have paid like that sort of stuff is beginning to happen which is epic for price growth but you know probably not epic for that not invest on that client but you know that sort of stuffs happening we still have been following the ABS data more Australians moving to South East Queensland than anywhere else in Australia you’ve got in North Brisbane in particular incomes plus populations in certain suburbs around that University expected to grow by 30% in next four years that’s meaningful income growth you know the main one in areas income grows by 30 percent in a short period of time straight back in the rent straight back into house prices and we’re beginning to see that according to the property managers that we introduce people to they’ve been doing that thing in Brisbane for 8 to 12 years it’s the tightest rental market that they’ve seen closer to the city and on the beaches in 10 years do you mean tight as in there’s not many vacancies chronically under supplied vacancy rates which for the first time that I’ve seen buying Brisbane for five years is starting to put pressure on yields and in certain areas yields have increased by between 20 to 50 bucks a week the granny flats actually have gone in some of those suburbs around that University from 270 bucks a week to 300 bereavement trying 310 a week now on the beaches the granny flats are renting for between 300 not for 330 week but we got some through through this yes stuffs you know just slowly slowly slowly you know we know that this key infrastructure going in the Brisbane metro the m1 the m3 major roads you’ve got like a city just completely under construction right now when you drive around like it’s it’s all good stuff for seven or eight years time from now it’s not a short term oh my god so that’s going to be crazy but I would prefer consistency over the next seven years then it’d been a short turn Biermann bus oh I’d take a short term if it’s here ideally not the bus afterwards about always getting a bus you know and stuff goes up by 80% you get a 20% correction on that yes you happen it you know ideally you want to buy before that 80% growth so when you have a 20 percent correction you’re still in the game yeah and so obviously always go out and do your own research do your own research into Brisbane if you are considering investing in prison look at the htw month in review report look at core logics data there’s a bunch of other people who do reports out there Residex as well you look into those reports research the individual suburbs as well and the properties that are in them to see they line up with your strategy do all of that research yourself and decide whether or not you think this is going to be a good area to invest in yourself don’t just take our word for it go ahead and look at it yourself and you might come to a completely different conclusion and that’s completely fine you need to do what’s best for you and that’s very important Ryan like you know Brisbane is in Brisbane Brisbane is north middle east west and south and then within those areas like I’ve got suburbs right now where this particular suburb let’s call it 21 case in the city versus this particular suburb 25 Kay’s there’s a difference in annual price growth between those two suburbs at the moment of 10 ye-yeah I’m saying like I think I know the sellers you’re talking about yeah there’s other suburbs on the beach right now and you know this particular beachside suburb it’s just the hot spot and everyone’s on it and then the suburb next to it is 70 or 100 grand cheaper or even like a suburb 16 cash in the city versus 124 like there’s a 300 grand difference in price and that’s the sort of stuff that I like to say like you know the load up of an expensive suburb just because there’s like a slightly better locational factor yeah and then what the ripple effect longer-term will be yeah so I say to people at the moment like some of those beachside suburbs in Brisbane are literally between 15 and 30 cents in the dollar compared to the same distance for the same beachside suburbs in Sydney or Melbourne some of the suburbs within 10 caves of the city literally 30 to 40 cents in the dollar of what the same thing in Sydney and Melbourne would be right now it’s just that’s exciting to me yeah and then so you got to think about do you think Brisbane is eventually going to grow to be the size of Sydney and Melbourne have pricings similar to Sydney and Melbourne and we know next 10 years the ABS is saying it’ll be the exact same size as Sydney in Melbourne today within 30 years from now so you kind of go wall if that’s what’s coming then and you factor in inflation on top of that it’s kind of like interesting to see where things could be yeah so we hope that you’ve enjoyed this episode a little bit extra insight into the Brisbane market if that’s something that you’re considering investing in if you are looking at help investing in the Brisbane market then Ben and the team over here at pumped on property are offering free strategy session so you can jump on the phone to them talk about your situation where you’re at and where you want to go and work out okay what are going to be the next steps for you what’s the best next steps and what could potentially be the best areas for you to invest in or the best properties for you to invest in you can then go out and do that yourself or you can hire the team here at pumped on property and get their help thanks so much for tuning in today and until next time stay positive hey should we talk about should be talking about prices and yields in Brisbane just so that people have an idea because a lot of people I speak to alive do I have to spend five kaor million bucks the buyer brisbane like what does my mummy get me what type of lecture except let so separate episode what does what does my money get me in brisbane something greater