| The year 2008 did see a modest drop in | | | | could not afford to repay loans to take loans on |
| Brisbane's property values overall.It is reported by | | | | at teaser rates. The lending practices of Australian |
| some that in the greater Brisbane region, | | | | banks have been much more prudent and this has |
| property prices actually rose 4.5% in the first six | | | | proved very good for the Australian residential |
| months of 2009! Of course, results vary | | | | property market. |
| significantly from suburb to suburb. Data however | | | | The Brisbane real estate market in particular has |
| reports that the median dwelling value for | | | | some very strong fundamental underpinnings, in |
| Brisbane rose only 0.13% in the 2nd quarter.But | | | | our view. Brisbane has a steady population growth |
| there are certain suburbs which have been | | | | of 3% per annual at a time where DEVELOPERS |
| performing very well even throughout 2008. The | | | | are finding it tougher and tougher to get banks to |
| best performers have generally been close to the | | | | approve their development projects. What this |
| CBD, within a 5km radius. PRD Nationwide | | | | means in practice is UNDER SUPPLY of new stock |
| research in their May 2009 bulletin report that the | | | | combined with INCREASING DEMAND. And that |
| inner northern suburbs such as New market and | | | | always means rising prices. Wages are now |
| Wilson have been doing the best, followed by the | | | | growing again at a healthy pace, according to |
| inner eastern suburbs like East Brisbane and | | | | Craig James, chief economist at Commerce. With |
| Kangaroo point, and then the inner western | | | | the Australian economy now showing signs of |
| suburbs like St Lucia and Towing. | | | | rebounding, and property vacancy rates at the |
| It is interesting to note that even in 2008 unit | | | | very low levels of 1-2%, rising wages, low |
| prices rose in certain inner city suburbs. New | | | | interest rates, stamp duty concessions, it would |
| market had a median growth of 13.2%, Wilson | | | | be surprising if property prices in premium areas |
| units grew by 13.1% and other suburbs recording | | | | did not continue to rise. |
| over twelve percent growth included New stead, | | | | I am surprised to see just how many people are |
| Green slopes, Coordinator and New Farm, again | | | | willing to pay to rent property today. Single |
| according to PRD Nationwide research. | | | | bedroom units in the Brisbane CBD are renting for |
| If this was the case during the general slowdown | | | | more than $500 per week in some cases. Indeed, |
| of 2008, it is certainly possible to make a case | | | | demand is outstripping supply right across the city, |
| that property prices could rise even further. And | | | | vacancy rates are falling, and rents are rising. |
| this is what indeed seems to be happening. | | | | Competition for rental accommodation is fierce. |
| *So Can a Boom Be expected again?* | | | | There are now a number of suburbs in Brisbane |
| The Australian real estate market is quite | | | | where the cost of the typical mortgage is less |
| different to the real estate markets of other | | | | than the cost to rent! In this environment, it |
| developed nations, such as the United States and | | | | would not be surprising to see a return of |
| the U.K. The United States suffers from an | | | | investors into the market. Once this happens, as |
| oversupply of property to the point where some | | | | momentum builds, property prices will feel an |
| of it is actually being demolished. Australia on the | | | | upward pressure. This will be tough for tenants, |
| other hand, suffers from an ACUTE shortage of | | | | but a real boon for property investors looking to |
| rental property. The United States practiced a | | | | build wealth through residential property |
| reckless lending policy which allowed people who | | | | investment. |