Property CONFIDENCE RETURNS ABOUT HOUSE PRICES

Positive sentiment is sweeping through the Queensland property market, as indicated by the latest survey from a major bank. The survey shows that property professionals are now more optimistic about the future, expecting house prices to rise in the next two years. This newfound confidence is driven by various factors, including increased migration to the state and the anticipation of interest rate stability.

According to the NAB Quarterly Australian Residential Property Survey for Q2 2023, property professionals, on average, predict Queensland home values to rise by 0.6% in the next 12 months, a notable improvement from the -2.7% forecast in Q1. The longer-term expectations are even more positive, with an estimated 1% growth, compared to the -0.9% forecast in the previous quarter.

NAB group chief economist, Alan Oster, attributes the rising confidence to the influx of migrants to Queensland and the belief that interest rates are close to peaking. With more people choosing Queensland as their new home, demand for properties is expected to increase. Additionally, the anticipation of stable interest rates encourages potential buyers to enter the market, considering it an opportune time to make their move.

In terms of the rental market, the survey reveals that property professionals expect rents in Queensland to continue rising at aboveaverage levels. Projections indicate a 2.9% increase in the coming year and a further 3.2% rise in the next two years. This trend is likely due to the undersupply of rental properties, with a staggering 92% of respondents believing that the rental market in Queensland is extremely undersupplied.

Compared to other states, Queensland witnessed the highest level of new property sales to Australian investors, capturing 17.5% of the market share in Q2. Additionally, foreign buyers' interest increased, reaching 10% (up from 7.5% in Q1). However, overall investor credit for housing has not seen substantial growth nationally in the last 12 months, which might impact the rental market in the future.

First homebuyer owner occupiers, however, have seen a slight decline in market share, accounting for 20% of new property sales in Queensland. Nevertheless, property professionals are now more optimistic about a potential rise in first homebuyer participation in the market, reversing previous expectations of a decline.

In conclusion, the Queensland property market is showing signs of renewed confidence, with property professionals predicting growth in house prices and rents. The surge in migration and the anticipated stability of interest rates have contributed to this positive outlook. However, some challenges remain, such as low transaction numbers and an undersupply of rental properties. As the market continues to evolve, it will be crucial to monitor how factors like interest rates and housing credit will impact Queensland's property landscape in the coming years.