International Business Times
A plot of land is shown as sold in Sydney’s newly-developed beachside suburb of Green Hills, February 2, 2015. The Reserve Bank of Australia (RBA), which held its first policy meeting of the year on Tuesday, announced a lowered official interest rate to 2.25%
Australia’s crackdown on investor lending has not dampened the appetite of investors who see Brisbane as the next big thing in property.
The most recent PIPA survey revealed that 60 percent of property investors are on the look out to buy a residential property in the next six to 12 months, with the majority of survey-respondents viewing Brisbane as the best alternative to Sydney and Melbourne, where prices have already peaked.
“Investors are seeing Melbourne and Sydney performing very well and looking for alternative markets to get in before the market starts to move,” Ben Kingsley, chair of the Property Investment Professionals of Australia, told AAP.
Sydney market cooling
In Kingsley’s view, Sydney’s property market is slowing while Melbourne is approaching the peak of the cycle.
“Probably over the last six months there has been some speculation in the Sydney market, and the Melbourne market is enjoying a good Spring but I suspect that will slow down into 2016,” he said.
In the PIPA survey, 58 percent of investors identified Brisbane as the capital city with the best investment prospects, ahead of the 17 percent who rooted for Melbourne. Only 11 percent named Sydney, while six and five percent of respondents preferred Perth and Adelaide respectively.
The results also showed one fifth of investors have deferred their investment plans fuelled by concerns over a property bubble. Investors also harbour concerns about tighter lending norms as regulators seek to slow down investor lending. Price corrections, the removal of negative gearing, long vacant periods and an oversupply of property are also factors that weigh heavily in the minds of investors.
More than 40 percent of investors said long term wealth benefits was the main reason to buy property while capital growth opportunities and low interest rates also mattered.
Influx of renters
A real estate agency in Brisbane also confirmed the spurting demand in the city where a new influx of renters look to buy in the low rate market.
North South Real Estate’s joint director Jasmina Petrovic said the rising competition in the Brisbane housing market will only intensify after the Reserve Bank decided to maintain the cash rate at 2 percent, reports Broker News.
The home value index released by CoreLogic RP Data noted that house prices in Brisbane had increased by 1.6 percent in the three months to September and 4.9 percent over the year until September. In Brisbane, a detached house commands a median price of $511,000 and an apartment comes at $375,000.