It feels like time goes faster every year that goes by, and as we approach mid-2024, we’re already nearing the new financial year. I’m excited to provide you with the latest real estate insights for Brisbane’s northside. Whether you’re an investor or a homeowner, here’s what you need to know this month.

Tips for Investors Considering Selling

As the financial year draws to a close, investors looking to sell should consider the timing of their sale to optimize tax outcomes. To have any capital gains counted in this financial year, ensure your contract date is before July 1st, as it is based on the contract date, not the settlement date. Conversely, if you wish to defer capital gains tax until the next financial year, sign the contract on or after July 1st. Please consult your accountant for personalized advice. Keep in mind, land tax applies based on the settlement date.

Residential Sales Market Update

Market activity remains robust, continuing one of the strongest periods we’ve seen in a while. Prices are at their peak, with our internal statistics showing an average of over 10 offers per property currently being marketed. A notable example is a two-bedroom unit on Beckett Road in McDowall, which sold for $605,000 in May, compared to a similar unit that sold for $550,000 in March—a $55,000 increase in just two months.

Interestingly, CoreLogic data indicates that 16% of early 2024 sales involved properties bought less than three years ago. This trend, typically seen in a hot market, suggests quick profits for investors. However, mortgage hardship also plays a role, with ASIC reporting a 54% increase in hardship notices presented to banks in late 2023.

Future House Prices Outlook

Despite rising mortgage stress, we do not foresee a market crash. A potential correction may occur as the fear of missing out diminishes, but several factors are likely to keep prices stable:

Strong Migration: Record migration approvals are supporting demand.

Reduced Listings: A significant drop in available properties underpins the current market.

Decrease in New Developments: Rising construction costs have led to fewer new development approvals.

For example, the graph of total property listings in the 4034 postcode shows a significant reduction from 2010 to 2024, illustrating the constrained supply.

Commercial Update

The commercial property market remains vibrant, with strong interest from both investors and owner-occupiers. Higher yields (6% or more) are being sought by investors due to increased borrowing costs. Industrial properties are particularly active, with targeted sales campaigns yielding excellent results.

Residential Rental Update

The rental market has slowed, largely due to tenant affordability issues. As mortgage costs rise, landlords are increasing rents, but tenants are struggling to meet these higher rates. Consequently, many tenants are renewing leases instead of moving. The average days on the market for rentals have increased from around 10 to 15-20 days. While well-priced properties rent quickly, those priced above market value are taking longer to lease, with landlords having to often lower weekly rental expectations. This update highlights the reality that the rental market, contrary to some media reports, is not as “crazy” as it might seem.

Personalised Advice

If you need tailored advice for your specific situation, please don’t hesitate to reach out. We’re here to help and provide professional guidance.

Thank you for staying informed with our monthly update. We look forward to assisting you with all your real estate needs.