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Lack of supply for buyers and renters.

Aug 22, 2023

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The home supply shortage in Queensland is hitting from all angles at present, we have a low supply of homes available for purchase and for rent.

I was asked a great question the other day, “Is the low amount of stock for sale due to the fact there isn’t many options for people to buy, is it fear of not finding something?”

Let’s unpack that question. It’s likely a combination of factors, including higher interest rates making it hard for some upgraders to get the finance they need, concern that once they sell it will be hard to buy back in and a lack of motivation to become an investor/landlord where policy has favoured the institutional landlord model, better known as Build-to-rent.

On top of that, we’re in the midst of a rise in immigration, with the Federal Budget forecasting net 700,000+ new migrants moving to Australia over the next 18 to 24 months. This is continuing to add significant pressure to the overall problem.

Something else to consider is the extended period of high construction costs, labour shortages, and stories of builders going bust or exiting Queensland has likely discouraged more people to build or renovate, but rather buy in the established home market instead.

Strong employment continues to underpin demand, but we also have a large and growing number of buyers in the marketplace today that is unaffected by interest rate rises because they’re purchasing with cash.

PEXA recently released figures showing that 25% of residential sales across the eastern seaboard last year (NSW, QLD and VIC combined) were to cash buyers.

With unit sales so strong, it’s fair to assume that a large portion of the 25% are first home buyers with the assistance of the Bank of Mum and Dad and loads of government help including stamp duty breaks and the First Home Guarantee.

When you package all this together, we’ve got quite the problem on our hands. A lack of land releases and affordable new developments. It’s concerning when you look at the growth Sydney experienced post-2000 Olympics. It’s only a matter of time before the Brisbane games arrive and we potentially see similar growth.

If you’re looking at purchasing or renting a home across the inner city of Brisbane, reach out to our team for assistance.

Enjoy the rest of your week.

Cheers, Henry