Banks: Brisbane touted to boom (~20%), other capitals to follow

Westpac has made a lot of waves with this chart.

 

Are the banks just talking their book?

 

What were they saying 6 months ago?

 

If they manage deferrals through to the point of open borders and or a vaccine I suspect that chart will be reasonably accurate, albeit it might happen a little later.

The game in town is to limp it through until more kerosene is added. The pandemic is the scape goat for loose lending now, and people starved of listings are at the point where they’ll take it up and play the game. The low listings on market is a direct reflection of the deferrals policy, it has single handedly prevent price falls.

 

Are they saying Brissie is going to go up 20% just in 22-23, or between now and 2023?

 

I don't really follow it at all but still enjoy putting in my 2 cents! lol. I do think there will be gains, but I feel 2021 is just too early, prices right now I feel isn't going down as badly as many first home buyers are seeing it as an opportunity to get a place "hearing that the pricing is down a bit" plus government money and the banks allowing the 3 month pause.

Thats great and all, but I feel unless borders are opening up a lot more especially with international students and travel industry. Once we get into 2021 will likely be when everything hits and people will have to sell if they wasn't able to get their job back, or cover mortgage due to pay decreases.

I imagine the 22-23 financial year is when things start going back up again, if borders and stuff open full, universities are back etc, things will be in full swing.

 

The way I read it is gains from now until then, so 5-6% PA compounded. The chart makes it look ground breaking when it’s just a couple of normal years of growth after pent up demand.

 

I'm still waiting for the 17-21% that BIS predicts for Brisbane every year .
I hedged my bets - selling one before the downturn and keeping the other one until the boom.

 

Wake me up when it happens. I will be in my bear onesie.

 

Number one rule of Australian property. Nobody... and I don't care if you're Phil Lowe or if you're Frank Lowy. Nobody knows if Australian property is going to go up, down, sideways or in circles. You know what a fugazi is?

 

I currently have a tenanted property on the market. It’s been difficult with Covid and I was unaware tenant was pregnant. I’m tempted to take it off and hold another year or two. Thinking about some comments I heard recently that bank predictions are always wrong though I’m trying to think what core logics predictions were.

 

Lucky bugger, I'll have to move to Gawler and possibly work a bit more while I'm there

 

That would be a very unfortunate social development. Lots of younger families have moved up to QLD for the affordable housing.

 

Hi codie
Just curious as to if you think 5-6% is normal growth going forward say 10 -30 years. If interest rates stay as they are and wages are growing by say 2% each year and inflation stays benign at say 2%, would you be confident of getting a 3-4% real return? If that was the case houses would become even more unaffordable then they are now compared to incomes.
If say we took the median household income of $100000 in Brisbane and have it a 2% a year wage increase in 10 years their income would be $122k, 30 years $182k. If we made the assumption that houses will grow by a normal 6%, a median $500k house in Brisbane will be worth in 10 years $909k and 30 years over $3 million. 10 years house price to income would be Circe 7.45 and in 30 years it would be 16.5. I would say we would either need a massive amount of some type of inflation to have property grow like that I. The future, I’m just trying to understand how playing the long game of property works from here on? Hope you can help me or someone on the forum can. Cheers mate

 

We're still a happy country. When I see friends who live in utterly unaffordable countries like Hong Kong, they are miserable. There are oceans of miserable people out there looking for a better life. This alone means there is more room to rise. If people are happy, then it means things can get worse (and prices can keep going up). That's how I see things. Until we see more darkness and even lower birthrates, I think there's reason to be optimistic as an investor.

 

If interest rates keep going down then dwelling prices will keep growing, simple as that. However there's not so much room left on that one.

Also property prices can keep rising without median dwelling prices going up if there is less land per dwelling i.e. redevelopments

 

C'mon Logan!




Also good to see that greater Elizabeth, aka Adelaide, will supposedly be growing by 10% as well!

 

Honesty, if you play a 10+ year game, dont bother about those analysis. Interest rate cap, income cap, debt to income ratio cap .... all are crap in a long run. The only thing matter is population/density level.

If you have been living in any high density Asian cities, you will see there is no mortgage available for existing house (people buy with Cash), no negative gearing, no beaches ,no whatever, 50-70m2 land size building ... And the property prices is still 20-30 times more expensive than Australia (taking into consideration of wages)

Basic economic applies, (demand of the population) vs supply land really matter. With the current population of 2x mils and immigration policy, there's not much to discuss for this matter. We may come back to the population prospect topic when reaching 100mil+ or so