Real Estate

New Queenslanders helping to boost market confidence

Written by The ReReport
As seen in the Source link, written by on 2019-05-22 05:00:00

Population growth in Queensland is helping to increase property demand and market confidence.

A COMBINATION of rising migration, affordable home loans and increasing incomes could be a winning trifecta for the Queensland property market, according to a new report.

The PRD Nationwide Key Market Indicators (Q2) report found Queensland had the property growth indicators and economic fundamentals to boost confidence in the market.

But there is room for improvement, the report said, particularly in the areas of dwelling approvals and first homebuyer numbers.

Dr Diaswati Mardiasmo, PRD Nationwide national research manager, said market confidence was crucial in the current economic and political climate “where there are many uncertainties … such as federal and state elections, potential implementation of the Royal Banking Commission recommendations, and fluctuating Australian Dollar”.

According to the report, the number of people moving to Queensland was up, with net migration growing 22 per cent in the 12 months to September 2018, earning the state a ‘bronze medal’ in the market stakes behind Victoria and New South Wales.

However, dwelling approvals were down 35.3 per cent in the year to February.

Dr Mardiasmo said the drop in dwelling approvals wasn’t necessarily bad news when coupled with the property demand resulting from population increase.

“In one aspect this allows for current stock to be absorbed, particularly those in Brisbane, however it also creates an opportunity for developers wanting to create niche product offerings,” she said.

“It does need to be niche product offerings because the market is flooded with the two bedroom, two bathroom style properties.”

The report found Queensland continued to be a more affordable for home loans compared to its southern counterparts, though the number of first homebuyers was down.

Queensland recorded 35.6 points in the home loan affordability index, above New South Wales (27.2 index points), Victoria (30.2 index points) and the national average (32.0 index points).

The number of first homebuyers declined by 14.4 per cent in the year to December.

Dr Mardiasmo said affordability was only one factor responsible for the drop in first homebuyers.

“It’s not just about affordability, it’s also about how tight the lending market is and taxable income policies,” she said.

“Those three things need to line up to see an increase in first homebuyer activity.”

In the 12 months to December 2018, the weekly family income in Queensland was up 2.6 per cent to sit at $1,721, the report also found.

This gave Queensland another ‘bronze medal’, placing it behind Victoria/Tasmania (2.9 per cent) and New South Wales/South Australia (2.7 per cent) in the Key Market Indicator Awards.

Dr Mardiasmo said the pay increase should translate to a higher disposable income for Queensland families.

“This has a positive multiplier effect into the economy, as those working have the potential to spend more on goods and services,” she said.

“This creates a steady platform for future economic growth in Queensland.”

Key Market Indicator Awards — Queensland

Net Migration — UP 15,206 people or 22 per cent

Dwelling Approvals — DOWN 35.3 per cent to 2,468

Home Loan Affordability — DOWN to 35.6 index points

Weekly Family Income — UP 2.6 per cent to $1,721

First Homebuyer Loans — DOWN 14.4 per cent to 5,664