Real Estate Cooling down

I have been following real estate trends for the last 12 months..

I note market has cooled down a little..

Will it calm down further ??

In the market to buy our first home in Brisbane south.

Thanks in advance for your feedback

Comments

      • +1

        if you believe these "experts" (banks, agents, politicians) you are truly dim or haven't been around long

        • +2

          I feel that's pretty much everyone in Sydney/Melbourne who've had FOMO the last 6 years

    • +1

      It did drop in 2020, you had to be quick though.

    • +2

      well there is a 50% chance to get it right!

  • +1

    Slowed a tad before Christmas but I'm hearing it's picking up again. Agents returning early from their breaks due to increased inquiries and demand.
    Best to buy when you need to and can afford to. Cheers!

    • +1

      hmm.. we have been told that we could borrow upto $750,000

      But we want to borrow $500,000-$550,000

      • +1

        You'll probably have to buy in Logan (if you want a house and backyard). Even $750k is incredibly tight for a house from Eight Mile Plains through to Mt Gravatt.

        • +1

          What’s wrong with Logan? Genuine question since I’m in VIC. My friend bought an investment property there for $400k in Feb 2021 and pockets net profit of $900 every month.

          • +1

            @airlie50501: Nothing wrong in terms of investment (I have an IP there and my sister has one too), but a lot of people view Logan as a less desirable LGA because there of the few suburbs which are known for higher crime rates, lots of housing commission, etc which has led to the generalisation that Logan = bogans on meth. Snobs up here in the Brisbane LGA think they're superior to any other LGA.

          • +1

            @airlie50501: pockets around Logan have high crime rates (kingston, woodridge and underwood etc)

  • That's a question no one has an answer to.

    And if people knew in advance, then it'll be gamed.

    • i have been following few experts - every week they say CRASH is coming !!! its been a year now :P

      • i've been waiting for years for the buble to pop, it never happened. the price may stagnant for sometime, but it will never significantly reduced. if you got the money and it is for your own living then just go ahead.

  • It will warm back up this month and next. December is always a dead duck.

  • I wish you did not wait for it from 2011 till 2022.

  • +5

    Yep it's going to crash!

    Right after you buy, keep waiting it it will only go up.

  • +6

    I even saw an expert on TV saying now is a great time to buy

    he was a real estate agent….

    • +8

      I saw that expert. He also Said it was a great time to sell

      • +4

        Well it is great for him

        • +1

          Its funny how a 2 week course at tafe makes you such an expert in things that not even the CEO of banks, RBA and investment firms can accurately predict

          • +1

            @MrThing: realestate agents are so sure of themselves, they've based it off one thing and one thing only 'it's gone up every year so far so it can't go down'

  • +2

    Cooled down in momentum , but that is not the same as things getting cheaper. There are multiple reasons that Brisbane will still have modest gains in the next 12 months , more so than Sydney and Melbourne.

    If you looking at Brisbane for a home you should buy now when you find something suitable. Plenty still between Brisbane and Gold Coast within your budget.

    "Queensland secured more than 90 per cent of net interstate migration in the year to June 2021." - AFR 5/1/22.

    • +2

      Queensland always had significant increase in population due to people moving from other states, usually retirees.

      Now it is people who are sick of lock downs in NSW, VIC. Problem is up in Queenland the jobs are not the white collar jobs. It has always been unrealistic moving to QLD expecting to be paid big money, might change but not in hurry.

  • +7

    Plenty of Sydney & Melbourne people fleeing to Queensland, so demand isn't going to reduce short term.

    It will cool off when interest rates rise and/or when all the Sydney/Melbourne people make Brisbane awful too. So 2-5 years away yet.

    • +3

      yes alot of vic and nsw cars on Brisbane roads….

    • Brisbane was awful way before the property bull run of the 2000's started

    • Why are you fleeing to Qld?

  • +1

    I always laugh when people state that the housing bubble will burst. It will NEVER burst. Australia is full of rich middle class people ("aspiration voters" as the liberals term them) who are willing to plough most of their extensive income into housing. If you want a guaranteed 10% per year ROI for the rest of eternity, invest in housing. It's a no brainer. The only alternative (potential) high return investments are child care centers or cryptocurrency, but the latter has been ailing the last few weeks. Housing is much less volatile.

    • +4

      Id say 10% is pretty optimistic given how much of a pain Tennants are and the cost of maintaining houses.

    • dont know why negged !!

      Thanks for sharing your views. i do partly agree with you

      • +1

        Because invesitng in housing is a meme when you can just do vanguard or stocks.

    • +4

      The current growth is not sustainable. Middle class will not be able to afford them soon.

      • +1

        well it'll be like other main cities in the world

        houses get replaced by duplexes which get replaced by small high rises which get replaced by high density living. more people smaller area. no more 1000m2 blocks, anywhere in greater sydney. only the top members of society can afford property with a patch of grass

        if you crammed Sydney with high density living the prices would drop as the population wouldn't be able to support it.

        • +1

          Sounds like hell.

        • +1

          Sydney does not have very good public transport infrastructure as other main cities. It will become unlivable hell if you are right.

    • +1

      who are willing to plough most of their extensive income into housing.

      Which is what dissapoints me. So much money we could have simply going to banks and a handful of investors.

  • +1

    It's not going to get cheaper if that's your question.

    People find money from somewhere even if rates rise (think bank of mum and dad). The demand is always going to be there.

    Population is growing and migration will get back to normal once the pandemic finally finishes.

    Buy when you are ready.

    Time in the market is better than timing the market.

  • Wouldn't be surprised if prices stabilise (although the usual market drivers of migration from interstate and constricted supply still exist). But would be very, very surprised if prices fell. So no, don't wait if you are hoping for a cheaper price - they're only gonna get more expensive. The only variable you are punting on is how long that will take…

    • a major problem we are having.. most of the properties we enquire about they are under contract

      • +3

        Consider using a buyer's agent. Sure you need to pay them a fee, but it will give you access to properties that you didn't even realise were on the market.

        • thanks for the tip

          How much do the buyers agent charge ? roughly

          • +1

            @Sam Sharik: The fee structure can vary, some fixed fee, some a percentage of the final property price. Best would be to get in touch with some to discuss what they can offer.

      • chat to agent if find one you like chat about properties know are come to market and what you want, I know myself by my mum new place I was chat with agent about what she need went she need it he was lovely show place owner were chat about sell their rental. My place i was chat with mum and dad bank manger she shows place that bank owned we got low ball house.
        I have mate that flipper he agent help get cheaper place that need work.

  • +1

    If you are going to buy for long term, just dive in when you find a suitable place. House security is more important than short term price variation. If you are an investor looking to time the market, you probably have to wait a lot longer or pray that the Chinese real estate situation will rock the global markets.

  • growth will cool with looming interest rate rises with much more sedate growth this year (but still growth), don't expect drops unless rates go crazy.

    • interest rates are rising slowly

  • +2

    Really?

    There still looks to be a steady stream of southern states rich COVID refugees headed to Queensland and buying up the housing.

    Prices up there still ridiculously high lol

    Not sure why NSW ain’t good enough for these border runners, we got more freedoms and a better premier

    Too much cash, not enough brains I say

    • +1

      I would probably say you have a far worse premier than what they have in NSW (both have terrible though)(. But hey if you are going to be stuck with crap pollies and lockdowns at least in QLD you have sunshine and better beaches.

      • +1

        Piss off, QLD premier is fantastic. At least we had zero COVID before you plague states decided to bring your suckage up here

        • +1

          :) lots of love for Anna - she is a politician. nothing to like about that.

        • +1

          Didn’t Anna open the gates? Didn’t think Peroett or Sco forced her hand?

          She permitted Covid to enter QLD lol

  • +1

    I saw a report with a graph that showed property in Australia never really falls, they go sideways. Areas will go up and down but on average its either up or relatively sideways.

    During one of the sideways periods you will obviously have more options and time to consider so it would be easier to get the right property for you.

    You should also run the sums on how much you are paying in rent and how much better off you are buying. For me I worked out that I would need a 9% return on my deposit cash in order for me to be better off renting. Could probably have achieved it but guaranteed 9% was better than a punt.

  • +1

    We listed our inner suburban apartment in Melbourne for sale end of November with late December auction date.

    Agent insisted on setting price range below what we wanted / would set our reserve at.

    Got 0 people at the auction, not a single person turned up.

    Were lucky to sell privately after at a price which was inline with our planned reserve.

    We were really happy with this outcome as it felt like the market had really cooled down, to a greater level than the usual Christmas slow down.

    • +8

      That’s because it’s an apartment, they are abundant.

      • +1

        Yep, apartments and houses are two completely different markets.

  • If you can afford to buy do it now. I was looking at buying an investment property during the peak this year and by the time I got my loan approvals and found a property prices had gone up by like 5%. I was then priced out of the Sydney Market. Ended up buying on the Gold Coast.

    People are placing more value on homes now because of COVID. We are working from home a lot more so we are spending the majority of time at home. Buying to be to close to work is not as much of a factor anymore as we move to a hybrid work place.

  • +1

    Yeah, might go up 17% annually instead of 20%…but then again maybe 25%…who knows. The government and banks will always find a way to keep it on the boil.

  • +3

    As a general rule - time in the market is better then timing the market.

    • +3

      Than*

      • Well you can spend a lot of time in the market then time it

  • +1

    No one knows. The market does what it does and even the experts are just guessing.

    The only constant is the government will do all it can to keep house prices from falling. Australia's economy is dirt. Mining or land, that's where we dump all our money.

  • When I went around to auctions before Christmas, every real estate agent pretty much promoted the house to be the perfect gift for Christmas, trying to get people to put higher bids.

    Now that Christmas is over, I hope real estate cools down a bit.

  • +5

    With a very high level of property ownership across the country's population (assumably more so in case of OzB readers' sample), asking people if prices will fall is like asking shareholders of a company if its stock will fall in value. I doubt if you will get an impartial view and it's obvious and rational in a way. Just go out on the streets, read the numbers on websites and do your own assessment.

    Asking real estate agents about their opinion on the market condition is also a stupid thing to do. They have absolutely no incentive whatsoever in saying or agreeing that 'market doesn't look hot' irrespective of the actual market condition.

    If prices never fall, then they wouldn't have fallen in 2019 but they did in varying percentages across different cities though the fall was short lived. If it doesn't fall but remains flat for 5-6 years (like many parts of Brisbane or some regional towns before this current boom), then it's nearly as bad as a fall from the investment perspective.

    "If it's a primary residence then it doesn't matter at what price you bought it" so say people. I fail to understand the logic though - how does the purchase price not matter at the end unless you aren't going to sell the property for a couple of generations!? Purchase price is what will define your profit (e.g. $100k up or down) whenever you have to sell that property for whatever reason. Primary residence house doesn't mean that you never sell it in life to encash the profit (and maybe buy another or just use up the $$$).

  • +1

    I think what the housing market has shown us is that Australians have too much disposable income because they can buy a house with 5-8 years of their life/income and still live a decent lifestyle. Unfortunately around the world we see that people are willing to give up much more for a house going to generational loans and essentially, this is what happens when housing prices increases at this rate. This must be stopped because it's beyond ridiculous but if you let the money sit in the hands of the people, this is what happens. They even lowered interest rates, which should actually give people more money (e.g. if I wanted a loan at 400k at 4%, I'd be paying a lot less every money at 2%) but instead, people just borrowed more. If we had an actual trust worthy government, I would say increase taxes, take this money, put it into healthcare, schools, sustainability, or whatever that's actually going to make the country better or generate real value because right now, it's going into housing and it's only helping a few parties: people who own an investment property and banks. Neg me or you want for wanting to increase taxes and taking more money away from people but all it does is increase house prices unecessarily.

    The second thing is to stop these investors right now. Competing against people who just want to find a home to live in when you yourself already own a home is disgusting.

    • 5-8 years try 10 for most capital cities and that why I think it getting a little ridiculous :-) cant stop investors
      this is a capitalist country, it not perfect but that what we got and a capitalist country, people are free to put money where every they see fit
      having said a lot of regulations and taxation rules seems to favour properties investors so they can do a bit of tidying up around that area

    • +2

      Unfortunately around the world we see that people are willing to give up much more for a house going to generational loans and essentially, this is what happens when housing prices increases at this rate.

      Whilst most of your comment makes 100% sense, the above isn't true. In fact, Australia has one of the worst income to house price ratios (only next to Hong Kong). Let aside other countries, talking of even the Western world, it's much easier to buy a decent house (& two-storey) in the US for $500k-$600k or less in at least 20 of the top 30 cities which offer high levels of job opportunities like Sydney and Melbourne. In many countries in Asia, the income to house price ratio is similar to that of the US at least for the white collar income earners. Can't think of many countries where you would need to spend 15x to 25x gross annual income to buy a half decent house in 30km radius from the CBD (read Sydney) and even then you struggle to find a house.

      • Can't think of many countries where you would need to spend 15x to 25x gross annual income to buy a half decent house in 30km radius from the CBD (read Sydney) and even then you struggle to find a house

        Isn't this most countries though? 15x-25x is relative since it depends on how much you actually earn and how rich you are.

        In fact, Australia has one of the worst income to house price ratios (only next to Hong Kong)

        I'm not going to try and dispute the facts with anecdotes, and I've always heard this but I often hear conflicting (albeit anecdotal) evidence. For example, lots of my new Zealand friends say it's actually worse over there coupled with the fact that salaries are lower. House prices in Malaysia can be quite comparable to here (400k-600k for a house and 200-400k for a decent apartment) but salaries are lower, not to mention the conversion rate means they're earning a third. I have plenty of friends there, University graduates who are on 2000-4000rm a month but even an apartment can go for 600-1mil+rm within an hour of KL. Talking to them, they have no idea how they're ever going to afford a place, whereas even with the massive boom, I still can on average salary. I have a friend from Russia who when I show house prices in regional Victoria (1-1.5 hours from CBD) says it's really cheap relative to income compared to Russia. Now with WFH a thing, does being that far from the CBD really matter anymore? That just comes down to individual preference. Within an hour of CBD, there's plenty of units, townhouses and apartments for 500-700k like Preston in Melbourne. Easy for two people to pay off.

        On 72k (average Aus salary) I can pay of a 400k house in regional Victoria quite easily alone, so two people could do more and then people on 6 or even 7 figures can easily buy a 1mil+ in inner cbd. My friends an SE, makes close to 200k, has got like 500k in savings from working (300k from the past 3 years alone) and can borrow 1mil. Apparently these aren't uncommon salaries for them. Then there are IT contractors and such that can earn way more, if they're the ones buying these 1mil-2mil properties, then it makes sense and it's not that bad.

        I feel like every country has it's super bad spots, like London in the UK. But even Australia has better areas (Adelaide, Perth, Queensland).

  • +2

    Judgement call for the buyer, no one can predict if properties will rise, fall or stall

    I feel for you and the younger generation trying to get into the market, personally I think the price is a little ridiculous
    but I cant predict where it will go but the general rules of money is when money supply is cheap asset price goes up
    shares, properties, crypto, arts or any XXX asset people want to throw money at.

    but when money supplies is tighten and rate start to rise asset price usually fall, the speculation stuff will be the first domino to fall, then comes the weaker business and so on and so for, the one with stronger foundation usually withstand pretty well and recovered pretty fast

    US market already freak out yesterday at the hint the Fed going to start raising rate faster than anticipate and our market followed with nearly 3% fall today.

    There is a saying in the land of the free "don't fight the Fed" mantra and it a winning formular for as long as any one can remember
    what it basically saying is when the Fed lowering rate and make money cheap you side with the Fed and go risk on and load up asset
    when the Fed goes the other way and start to raise rate you side with him be very cautious with asset price and start to risk off

    That the money theory how it will actually pan out is another issue and that in itself is also unpredictable

    so it really up to your personal judgement, do your home work, have your money ready and maybe a good buffer, and trust your judgement

    • Thanks for your input..

      points noted

  • It’s unstoppable now, everyone has stake in it.

    People with house will vote for realestate because they bet their life savings on it.

    • +2

      If you had bought a house in Perth at the peak in 2014, you would have lost about 20% by the end of 2019. Every month between 2014 and 2019, the experts kept saying "we have reached the bottom. Things are looking up."

      For whatever reason, people seem to think that house prices rely solely on australian economic factors. All it takes is a credit crunch somewhere in China, U.S or Europe and contagion will spread like a bushfire.

      Also, to put things into perspective, real estate prices in 2021 in just about every country have had similar increases to Australia.

  • +1

    High inflation and the expectation of rising interest rates in late 2022 will quell fomo and shift expectations. Couple that with reduced borrowing capacity (already evident from 4year interest rate rises from banks) and its clear there are significant headwinds for the property market from mid 2022. Owners are already seeing this as a time to cash-in leading to increased supply whilst a lot of first home buyers have already bought or have been priced out and now forced to wait again.

    International travel and open boarders will lead ti increased rents and likely a return of investors in the market.

    My prediction would be that the housing market (the top end specifically) will correct slightly over the next 2-3 years with appartments (older style) will probably do a little better as they will be a better investment option with rising returns and comparatively smaller loan repayments. The housing market has far outpaced the unit market in the past 2 years, these things are usually quite cyclical and now or at least post covid the value proposition of appartments will look favourable when compared to homes.

  • Wait until 2042 for the crash. Or the year 2077, synonymous with crashing and burning.

    • looks like i have to wait !!

  • +1

    I can't find a chart for the Australian HPI on TW but found this one that gives a nice visual.
    https://www.savings.com.au/home-loans/australian-house-price...

    HPIPONM226S shows that prices aren't coming down.
    https://www.tradingview.com/chart/?symbol=FRED%3AHPIPONM226S

  • +1

    hey, my brother was also looking… Some of my finds last year around may onwards:

    1. Two older houses in Sunnybank listing for 650k each. It was a temporary lull in prices, after this everything started going to Auction and reaching an ~800k floor. eight mile plains and rochedale might be good options.

    2. Older house in Browns plains on 1000m2 block. $535k sold price. Greenbank nearby also has a lot of cheap options.

    I used "onthehouse.com.au" to find them. has a map view that makes finding houses in a price range easy.

    • Thanks … i would love to buy in Rochedale - but too expensive !!

      Browns plains is a bad area.. two friends regretted buying there and lost money when they sold.

      • Ok, guessing there will be more listings in the next few months. Also guessing Browns Plains will get better over time, once they sort out the youth crime etc.

        • one can only hope

  • Better believe it will cool down, and when it does I'm buying 40% off.

    • When was the last time the real estate market drop by -40%?

      • This time

        • Well, a -40% drop isn't going to happen.

          The GFC bearly moved the RE market and there isn't a GFC 2.0 to look forward to this time.

          It's either buy now or pay more later.

        • lol 40% off has been predicted so many times and has been wrong just as many times

  • +2

    Very difficult to know, but this is the one asset market where govts will do all kinds of things to stop it falling.

    As mentioned above, we are more likely to see high density living as the "affordable" property options in future, rather than significant falls in house values.

    The so called experts predicted a crash due to the pandemic, so yeah good luck with predictions an attempts at market timing.

    • +2

      Experts guess is as good as our guess :P

      • defs feels that way

  • +1

    It will stall a lot earlier in NSW/VIC before it does so in QLD. The mexicans have finally reaslised how good we have it up here in QLD and are moving here in droves :(

    • +1

      The mexicans have finally reaslised how good we have it up here in QLD and are moving here in droves :(

      I know what it's like to live in a nice quiet area only to have it flooded with people and ruin it. That's exactly what people are doing with regional areas and QLD. I definitely see the appeal but I don't want to ruin it for others who are there so unfortunately I'll just have to stay where I am :(

      • Just pick an area with planning controls, not all LGAs will be allowing high density living. There are suburbs with residential rural zoning that won't be subdivided

        • +1

          Until a greedy councilor gets a visit from a developer to change that.

    • +2

      I found Quaintsland a great place to leave - too damn hot and humid for me 8 months of the year

      I left when it was a Police State of lawn order with the intellectual curiosity of Bjelke Pedersen 'don't you you worry about that' … {urp}

      one Saturday night, I saw a huge obese red-faced drunk cop IN UNIFORM bashing a tiny meek old aboriginal guy in King George Square - I said 'excuse me, what are you doing?' - the cop turned, breathed alcohol over me and slurred 'GTFO of here or I'll bash you up too !' - hopefully it's less R Soulish these daze.

      • yep that's some of the cbd cops hobby apparently…

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