Property buyers heading north to Queensland
Added on by Etairos Accounting
THE Reserve Bank of Australia’s (RBA) decision to keep the cash rate on hold at 2 per cent was not expected to stem a tide of out priced southern buyers heading north to Brisbane and the Gold Coast.
Following yesterday's meeting, RBA Governor Glenn Stevens said monetary policy needed to "be accommodative” with low interest rates supporting borrowing and spending.
"Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities. The Bank is working with other regulators to assess and contain risks that may arise from the housing market,” he said.
In Queensland, local buyers could soon find the going a lot tougher, but sellers can expect to reap the rewards of overheated Sydney and Melbourne markets — as hoards of New South Welshman, Victorians and foreign buyers start to park their cash in much [lower priced and better value] properties north of the border.
SQM Research’s Louis Christopher was very concerned at the state of prices in Sydney at the moment. "The Sydney housing market is now as strong as I have ever seen it. Our revised forecasts of 11 to 15 per cent price gains, up from the original 8 to 12 per cent, is looking very conservative. Movements now suggest increases of greater than 20 per cent p.a. at least for houses. This is dangerous stuff,” he said
A spokesman for LJ Hooker national research said low interest rates should prompt improved capital growth in Brisbane and surrounding suburbs "as buyers and investors out priced in Sydney and Melbourne head north”.
Analysts believe the RBA board will turn a blind eye to any of that sort of Sydney and Melbourne heat passing into other states, especially as it has already given the thumbs up to a crackdown on property investment and higher risk loans.
Tim Lawless from CoreLogic RP Data said the RBA’s attention would be squarely on boosting confidence in other parts of the economy and keeping the Aussie dollar down."Dwelling values have risen by 39% in Sydney and by 22% in Melbourne over the past three years, while the other capital cities have seen much more sedate conditions. At a time when interest rates remain low, there is the expectation that tougher lending requirements to investors as well as higher supply levels will start to cool housing market conditions and bring the rates of capital gain back to more sustainable levels across the two largest cities where growth in dwelling values has been the highest,” he said.
These views are consistent with recent statements by property expert John McGrath citing the potential for growth over the next few years in the South East Queensland region.
The RBA board meets next on July 7.
(Source: News Limited 2 June 2015)
