Is Now A Good Time to Buy in Brisbane?
COVID-19 has changed many things including the property market
Are you looking at buying in Brisbane? COVID-19 has brought a lot of uncertainty and many people are wondering whether now is a good time to buy or whether they should wait. To answer this question, we'll examine past action in the market, current trends and future projections.
Government assistance to home buyers
The First Home Owners’ Grant was introduced in 2000 to help people get their new first home.
As of 1 July 2018, eligible home buyers can get a $15,000 grant towards buying or building a new home, unit or townhouse that is valued at less than $750,000.
To be eligible, you must be at least 18 years old and an Australian citizen or permanent resident. The home you are buying, or building must be brand new. You must move in within a year of buying a home and live there for 6 months. You or your spouse must not have previously owned property in Australia that you have lived in.
There is also the HomeBuilder grant, which gives individuals and couples $25,000 to build a new home or renovate an existing home.
Like the First Home Owners Grant, conditions apply to this grant as well.
If your home is valued at less than $550,000, you can also receive a concession for transfer duty worth $15,925.
There is also the First Home Loan Deposit Scheme where you can buy a home with a 5% deposit.
The National Housing Finance and Investment Corporation guarantees the remaining 15% of the total 20% deposit.
This is significant as normally when someone is buying a home with less than a 20% deposit they need to pay lenders mortgage insurance.
The Brisbane housing market through 2020
Australia’s economy has faced a significant shock as a result of the coronavirus. This is reflected in the property market, where prices have dropped and the interest rate is at record lows.
However, Brisbane’s property market has been very resilient given the circumstances.
In September, Brisbane homes edged back to positive growth after four consecutive months of decline.
Housing values are only 0.5% lower than they were prior to COVID.
However, units are under performing and their values are 12% lower than they were in 2010.
This divergence between houses and units can also be seen in unit rents. House rents have risen 0.2% over the past 6 months while unit rents are down 1.6%.
Weaker unit rents are caused by higher supply levels and less migration, which has influenced demand.
The future of the Brisbane housing market
When considering the future, it is important to remember several key things.
Firstly, the virus will not be here forever. Queensland has done an incredible job at dealing with the virus and the economy is improving.
Provided there is no major lockdown, real estate experts expect the Brisbane market to be a slow burn until Christmas.
However, COVID makes the situation highly unstable.
Things could either steadily improve or rapidly get worse if we get another spike of COVID cases.
Is now a good time to buy in Brisbane?
Ultimately, the virus has shaken people’s confidence the moment and most people are hesitant to make the big decision to buy a home at this time.
However, if you see a home you love there is no reason you shouldn’t buy a home soon.
Do not rush this decision. Take all the proper steps to research and undertake your due diligence.
Considering the government assistance, strong COVID response by the state government, record low interest rates and falling prices, you should consider buying a home soon if there’s one you’ve got your eye on.
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