As the world continues to grapple with the COVID-19 pandemic, it has drastically affected the economy of more than 200 countries across the globe. There is no denying the fact that coronavirus crises have swiftly disturbed the jobs and economic condition in Australia, which is directly affecting the nation’s housing market.
The metropolitan city like Brisbane has witnessed a massive downturn in the property market during the Covid-19 outbreak. It has been creating a lot of uncertainty for those who are interested in buying or selling housing property in and around Brisbane.
Being a potential buyer, it is important for you to understand what’s happing in the Brisbane housing market. Thorough research can play a vital role if you are planning for a home move during the health emergency. Make sure you research everything in advance and hire the most trusted removalists in Brisbane who can protect your belongings throughout the journey.
If you want to know how COVID-19 pandemic affected the Brisbane Housing Market before investing your money, have a look at the article below.
Measures Taken by Government to Combat Financial Crises
The Queensland government has worked really hard and saved many lives over the past few months. Now, the government is focusing on economic recovery. Constructive measures have been taken to protect the jobs and income of every individual. The banks have stopped mortgage repayments to minimise the burden while the landlords have delayed or postponed rents.
The government is supporting those who have had their lives or jobs impacted by COVID-19. According to the Coronavirus economic relief package, households in Queensland will also get a $200 rebate to assist offset utility bills.
There are various packages available for those whose job has been sacrificed due to coronavirus. These include:
• Payment for potential employees and casual workers.
• JobKeeper payments
• Supporting trainees wages subsidy.
However, this clearly means that people are not sure whether it is the right time to buy or sell housing property in the Brisbane market due to the financial crises.
Impact on Brisbane Housing Market
According to some experts, houses prices take longer to reflect than other fluctuating economic factors. It is financial draining when it comes to buying a residential property than bonds and stocks.
But, you can’t deny the fact that people value homes as one of the biggest long-term investments. It is one of the most significant sources of wealth for a large number of households.
In layman terms, the prices of residential properties in Brisbane are more certain than assets. The fluctuations in the stock prices can also help you know the pattern of housing prices in the next few months.
A Significant Drop in the Housing Rates/ Prices
As per new data, property prices in Brisbane have taken a smash due to the COVID-19 pandemic, but the impact has been quite softer as compared to initial fears. The latest report revealed that the prices of residential properties in the Brisbane local government area declined around 2.1 % more than three months till June. This means the median price of a house is $685,000 – which is quite affordable.
On the other hand, housing prices in Greater Brisbane, including Ipswich, Moreton Bay and Logan and LGA’s of Redland, managed slightly better- the average house price dropped by 1.4 per cent to $582,847.
The financial support and packages introduced by the government like JobKeeper, along with a tight supply of homes have saved the Brisbane property market from a major collapse. Last year, there was significant growth in the housing prices for Greater Brisbane. But, the situation has completely changed in the June quarter due to the decline in prices of residential properties.
This happened because Queensland is highly exposed to the Chinese economy, in terms of education, tourism and foreign property purchases. It means the housing property markets are likely to suffer in the coming months.
However, both the state government and banks are working together to keep the housing property market stable during the COVID-19 outbreak. The situation will get better once tourism restrictions are lifted. The state economy and property market should leverage the advantage for more local travel by Australians because it is likely that overseas travel will still be banned.
The restriction on the Queensland border did not affect the Brisbane property market because maximum numbers of buyers were based locally. Residential prices were selling under the advertised price range. If you are planning to relocate within Brisbane or a surrounding suburb, do complete market research. Make sure you hire the best removalists in Brisbane who can transit your belongings from one place to another without causing any damage.
Not All Brisbane Property Will See a Downfall
Property marketers have revealed that the Brisbane real estate market is likely to suffer less as compared to the other cities, including the Gold Coast and Sunshine Coast. In addition to this, the capital city of Queensland doesn’t have ‘one’ property market.
There has been a prediction that the pandemic will leave a more limited or short-term impact on residential property prices as compared to the early-1990’s global recession. You would see the following short-term impact on the Brisbane Housing Market:
• “Investment-grade” or A grade residential properties are expected to fall in value by -5%
• B grade houses (average properties) could fall in prices by -10%
• C grade will be the toughest hit because there will be a flight to quality.
The market of luxurious homes and apartments will be likely to face more drastic results due to the stock market crash. However, the government is focusing more on a long-term perspective to bring stability in the existing housing market. The factors like supply and demand, demographics, availability of financial resources, affordability and local economic trends can drive the market in long-run.
The Banks are Becoming More Careful
As Brisbane was finally saturating its oversupply of new as well as off the plane residential properties, the COVID-19 pandemic induced lockdown and social distancing regulations left the market in a slump.
This has forced some banks and financial institutes to become more strict and reluctant while lending loans to new or off the plan properties in selected postcodes of Brisbane by lowering the maximum amount to value ratio.
Some of the postcodes are Hamilton, Toowong, Biggera Waters, Chermside, Milton and Woolloongabba.
The Role of REIQ Towards Protecting Brisbane Housing Market
The Real Estate Institute of Queensland (REIQ) has highlighted several urgent priority areas to maintain the health of the state’s property market, including Brisbane. The structure body has developed a set of proposed initiatives that will help in reducing the potential economic impacts of COVID-19 on the residential property market. They are asking the state government to focus on:
• Extending the first home buyers grant to established housing.
• Provide a 50 per cent reduction in development application costs and introduce streamlined processes. This will increase the level of construction, competition and reduce the cost for the potential buyer.
• Deliver around 75 per cent deduction in stamp duty during the COVID-19 pandemic.
Minimising the financial burden of stamp duty will reduce the potential financial risk and act as a great boost for home buyers who may otherwise be discouraged from buying during this emergency period.
These small initiatives would also encourage vendors to list their properties during the coronavirus crises and bring stability in the market.
If you are planning to buy a new house in Brisbane, have a look at this article. This will help you know the impact of COVID-19 pandemic on Brisbane housing market. You can do a bit of research and plan your move accordingly. Do not forget to hire the best removalists in Brisbane who can take care of your much-loved possessions throughout the journey.
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