Buyers look to Brisbane in an effort to escape overpriced property markets

This week we reference one of Australia’s leading business and financial commentators, Peter Switzer. In his recent article (Housing hysteria is ridiculous but it just might work), Switzer pointed out that the current housing hysteria (as he puts it) may only be relevant to Melbourne and Sydney markets.

 

Switzer seems concerned that such recent jawboning is creating widespread fear across the country. Even though the fear being instilled is really only relevant to a handful of states that are responsible for an overpriced property market.

 

 

We understand that the fear could pose a problem if the government decides to fix the overpriced market with a widespread solution. Think rate rise. However, in the meantime Brisbane stands a lot to gain. Let us explain.

 

 

Principal of HS Brisbane Property, Hannah Schuhmann says that Brisbane’s property market presents affordable house prices for buyers and feels that these fear attempts are not directed towards states such as Brisbane.

 

 

“The Brisbane market presents legitimately priced property and in many cases the housing value exceeds the cost,” said Schuhmann.

 

She says that interstate and overseas buyers are always so overwhelmed when they see what they get for their money in Brisbane.

 

“The media’s latest attempt to scare property buyers is likely to drive concerned purchasers out of those overpriced markets and into areas that offer great value, such as Brisbane!”

 

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Switzer writes that Reserve Bank boss Phil Lowe recently tried to scare the pants off silly people overbidding on Sydney and Melbourne houses. He then goes on to say how he feels that Labor was right to argue for a more aggressive attack on housing, given that Sydney house prices were up 18.9% for the year, while Melbourne prices were 15.9% higher!

 

 

Many economists have been expecting that house price growth would start to slow because house prices over the past two years have been crazy. Yet all the while, the ridiculous prices people pay are still being paid – especially in Melbourne and Sydney!  

 

Switzer points out that in the good old pre-GFC days, they would have just aggressively raised interest rates in order to cool down a real estate market that was too hot. However, the problem is (as he puts it) while the economy is doing okay, it is not strong enough to deal with a rate spike just to fix all of the Sydney and Melbourne madness.

 

 

And it is madness. But let us remember that this madness is predominantly in just these two cities. Which then begs the question, if we raise rates just to cool down the fire in Melbourne and Sydney, what will happen to Brisbane?

 

 

Switzer says that a blanket rate rise would be injudicious. We agree.

 

 

Sure, some fear may be needed in Australian markets where property is overpriced, however, in Brisbane we offer some of the best comparable property prices in Australia.

 

 

This is where Switzer is concerned that such media hype could potentially batter consumer confidence across the board Australia-wide, which will do nothing to help retail spending and the economy as a whole. Could Switzer’s ‘think outside the box’ idea be the answer?  

 

“A negative gearing ban on future purchases only in Sydney and Melbourne for one or two years.

 

“It’s an odd, tailor-made idea but it might make more sense if you don’t want to burn the economy, while hosing down the ‘on fire’ property markets in the country’s largest capitals.

 

Switzer says that we can’t afford to kill the economy to simply stop idiots overpaying for property, as our economy is on the mend.

 

 

Schuhmann agrees with Switzer and while she says she would not like to see a one-size-fits-all solution put in place, she is thankful that Brisbane is not one of the states where people are overpaying for property.

 

 

“In my experience, buyers are certainly not overpaying for property here in Brisbane. In fact, the value for money that buyers get with their property would suggest quite the opposite.”

 

She also says that with more and more negative attention being drawn upon certain Australian states, buyers and investors are quickly starting to looking elsewhere to spend their hard-earned investment dollars – Brisbane continues to present the perfect opportunity for them.

 

“Brisbane offers great value for money in terms of property and with so much developmental scope on the horizon, we can expect a lot of economic growth to come from this New World City.

 

 

This just proves once again why Brisbane is the state to watch. And with all this media fear being circulated, it just goes to show that buyers and investors really need to do their homework more than ever before. If you are interested in buying or selling property in the Brisbane CBD, contact the industry experts at HSBP on 0419 782 133.

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