What will our local property market bring in 2019?
It’s always hard to predict the property market, but we’ve had a look into our crystal ball and here’s what we think will be happening in Brisbane’s western suburb’s real estate market through 2019.
An optimistic start
As 2018 came to a close, the broader Brisbane property market was experiencing positive sentiment, but conditions not as buoyant as what we saw earlier in the year. Tighter lending criteria made it harder for buyers to get a mortgage and this caused flatter – and even price softening – across the country.
That said, the beginning of a new year in real estate usually begins with great optimism, even in an arguably tougher market. We see no reason why 2019 will be any different.
Buyers and sellers often wait until the fresh start of a new year to make a move, and the mood generally becomes one of hope. Many people also make moving home their new year’s resolution. This often results in a flurry of new listings, brings new buyers out in force at open homes and leads to some generally good sales.
We have seen this already, with open numbers stronger over the past few weeks, than what we had been experiencing through December.
A patchy and diverse market
Brisbane’s property market doesn’t move in complete unison and this was evident in the sales figures recorded last year. Despite Brisbane showing very modest price growth through 2018, there were some significant increases in several of our more local suburbs including that of Chapel Hill.
We expect to see a similar pattern over 2019. While it won’t be a fast-paced market overall, many of our desirable suburbs will register strong gains, while prices in other parts of the West are likely to stay relatively flat.
The prestige and luxury market will continue to be buoyant
One of the big winners for 2018 was the prestige market. We achieved an incredible number of street records, as well as suburb record for Sinnamon Park. Our agency negotiated ten sales north of $2M over the past twelve months.
At the end of 2018, the prestige market was showing little sign of slowing. There are still plenty of buyers still looking to purchase top-end Brisbane property, often in cash. We have seen this more recently over the past few weeks, with the sale of another multi-million dollar property in Fig Tree Pocket.
An election to have an impact on the property cycle
Calendar events often have a bigger than expected impact on the property market.
This year we’ll have our federal election, and election dates are one of these calendar events that can really influence property sales.
How will this affect you if you’re buying or selling? We’d advise you to get in early with a sale or purchase because once an election is called, the property market often falls into a period of uncertainty – a bit like a holding pattern – until after that election result is known. It can cause buyers to become more timid and sellers to hold off on listing their property.
There are more obvious ways elections have an impact too, such as bringing in policy changes. In 2019 this could include much talked about changes to negative gearing, which could have a real impact on property investors.
Note that April will also feature the Easter School holidays and Anzac Day, creating a slower than expected few weeks during this period also.
More big renovations
Changeover costs, such as stamp duty can have a major impact on the overall cost of buying a home – especially at the top end of the market. A property worth $1 million will attract stamp duty of over $30,000, whilst a property purchase at $2 million will attract over $90,000 in government fees. This is leading many buyers looking to upgrade to consider whether it’s worth moving up the ladder at all.
We believe that throughout 2019 and over the next few years we’re likely to see a trend towards large-scale renovations as an alternative to buying and selling. Expect to see more and more humble three/four bedroom homes become five or six bedroom luxury family homes.
Continued lending changes
Possibly the biggest influence on the 2018 property market was changes to lending criteria. Because banks were prepared to lend less, people had less to spend, this naturally brought an end to the speed of rising prices in many parts of the market.
With the final report from the Financial Services Royal Commission due to be handed to the Governor-General on 1 Feb, we can expect to see more discussion and flow on effects. It’s just one reason why it’s more important than ever for buyers to shop around to find the best lender, with the best mortgage deal for their particular situation.
Forecast
Despite the initial few months of the 2019 calendar year presenting some inevitable challenges, the fundamentals of supply and demand suggest the seller’s market theme to continue. Couple this with historically low interest rates, I believe the second half of 2019 will be especially strong for our local real estate markets, especially that of Chapel Hill and Kenmore.