03 Oct The bright shining star in Australian property – Antonia Mercorella
We put the property market into perspective and talk about more than just a flagging market in Sydney and how Melbourne is holding its own. One of the brightest property stars gets overshadowed by that hype. Antonia Mercorella will tell you where that is.
Kevin: Well, in a market that’s topsy turvy, particularly if you focus very much on Sydney and Melbourne which most people seem to do, the Queensland market is the bright shining star. Joining me to talk about what’s happening in Queensland in general and I suppose Brisbane specifically, I’m joined by Antonia Mercorella from the real estate institute in Queensland. Antonia, thank you for your time.
Antonia: You’re very welcome, Kevin.
Kevin: I want to throw some light on this because there have been some really good stories that sometimes get overshadowed by big dips in Sydney, and we’ve seen this historically where the Sydney market will take a big nose dive and then everyone thinks that property around Australia is headed for the doldrums.
Antonia: Kevin, absolutely. I couldn’t agree with you more. It’s very frustrating actually. Unfortunately, the media does tend to focus very much on what’s happening in Sydney and in Melbourne. And to be honest, those are outliers, those cities. They don’t represent the rest of the property market across Australia and certainly our property market is travelling along at a very healthy and good pace. And it is quite frustrating when that is overshadowed by reports about what Sydney and Melbourne are doing.
Kevin: Yeah, I’ve been talking about the Queensland market for quite some time, particularly Brisbane. And how it’s performed well consistently. It may not have those huge peaks that we see in Sydney, but with that comes the inevitable downfall. And we’ve seen the Queensland market, Brisbane move ahead around about six percent a year which it seems to be continuing to do, Antonia.
Antonia: That’s exactly right. So what we’ve really been seeing now for consecutive years is it’s the very reliable and very sustainable growth. It’s actually been in the range of somewhere between two to four percent on average and that’s now been consistently over the last three or four years. And if we look at the last twelve months to June 2018, we’ve seen growth of about 2.5%. So we’re going within that very healthy range. But as you say, our market, we’re not seeing that frenzied, accelerated growth that perhaps has been experienced in Sydney specifically. But we like to say that our market is reliable and it’s consistent. And I think that’s a good thing from both the buyer and the seller perspective. Gives you confidence and you don’t have that risk of the boom and bust cycle that can be experienced in those red hot markets.
Kevin: Yeah, let’s give an example of exactly what we mean here. Let’s pick one particular suburb on the north side. Let’s have a look at Kedron. And I’ll pick that one out of your top ten growth suburbs in a recent report only because it’s such an outstanding performer. To give you the dynamics here, 4.9% quarterly sales growth. Yet if you look at the one year change, it’s 11%. But over the five years it’s been 44%.
Kevin: So they’re quite outstanding figures.
Kevin: And when you look at demand, sorry to dominate this, but it’s something that I am passionate about. But there are only five houses for sale currently in Kedron in that median of 700,000 to 750,000, median there 744. That augers well for future growth as well.
Antonia: Absolutely. And I think that’s a really good point. Obviously when we talk averages, the growth is quite modest. But you’re right, if you start to look a bit deeper at the data and going to specific suburbs, you’re quite right. There is some suburbs where we’re seeing double digit growth and certainly if you look over the longer term, the five year mark in particular, you’re going to see some really, really healthy numbers there. And of course we need to be really careful when we look at property activity, looking at a quarter and even if we’re to be honest, even twelve months isn’t probably long term enough. And so I think that five year figure is always the safer one and there’s some outstanding results in that batch.
Kevin: Yeah, and you don’t really have to spend a lot of money either. I’m looking at another one of your graphs, the top ten highest value suburbs. And I look here at Brookfield, with a median price of 1.6 million. Sure it’s up there at the top end, but if you look at the growth as well. One year change 15.2% but over five years it’s been 17.8%. I mean that’s reasonable growth.
Antonia: Absolutely. Yeah, and Brookfield is obviously look it is at that higher end. There’s some lovely prestigious properties, but also you need to keep in mind for listeners that aren’t familiar with Brisbane, you are getting so much for your money. I mean if you think about what that sort of money would get you in Sydney, it wouldn’t get you much. Let’s be perfectly honest. So the value in your dollar just goes so much further here in Brisbane.
Kevin: Yeah, well there’s another suburb we’ll pick as well as a good example, Brackenridge, very affordable at 502,000. With growth over the last five years of 24.6%. Not to be sneezed at. You wouldn’t get that kind of return if you put that money in the bank.
Antonia: No. That’s exactly right. And I think this is where we really want to encourage people to, you really need to look a little bit beyond the TV reports and the radio reports. You really need to get access to the data, delve into the suburbs, take a look at those figures. What is the annual growth? What does the five year growth look like? Work out what your budget is. Have a look at neighbouring suburbs. If you can’t afford your suburbs of choice, take a look at the neighbouring suburbs. And I think we’ve been saying this for some time now, many commentators are saying Brisbane is now the city to watch. There is lots of really exciting large scale projects that are happening and of course the latest census data also tells us that more and more people are moving to Brisbane. So I think there’s an enormous opportunity in our marketplace where there’s still so many great affordable options.
Kevin: Absolutely. Always good talking to you, Antonia Mercorella from the REIQ. Antonia, thank you for your time.
Antonia: Thank you, Kevin.