Lack of auctions, holding Brisbane back?

If we look at the actual logistics of how a suburb rises in price, you need competition and someone willing to pay more than the other party to gain a slight increase, and so on and so on. (Let’s discount all fundamentals for the example)

Now one thing I have noticed is, a lot of the premium suburbs in Brisbane, in the 1.2m+ upwards range, 90% goes to auction, and a lot of these suburbs achieve double digit CG.

Melbourne and Sydney for example, great auction markets, ALL majority auction, picks up steam very quickly and can enter double digit growth within 12months.

I’d say the majority of Brisbane is listed with a price, which tends to give the buyer a bit more power and time to offer less, negotiate, gauge the market & seller (not all properties) which could be a large factor in as to why prices don’t do anything spectacular in Brisbane. After all, you need some speculation, emotion, & FOMO to drive prices that little bit higher.

I’m starting to think buying in the premium or fringe suburbs in Brisbane, is the best viable strategy for CG here.

Do we think it will EVER turn into an auction market? What would need to change? More demand, higher population? Upgraded nicer stock?

 

I think it all comes down to demand. Most homes that go to auction are homes which are in high demand, so auctions are usually the best place to capitalise on that demand from the buyer pool. Sydney and Melbourne generally have the highest demand of ppl wanting to live there, followed by Brisbane.

In Syd and Melb, when the market sentiment is flat, you'll notice traditionally high auction areas will resort to For Sale marketing, simply because the demand isn't there for an auction scenario.

That's why in Brisbane, the highest demand suburbs and stock will often resort to auctions to get the best results from that demand, while most other areas will just be For sale.

I think for the majority of Brisbane to become and auction city, the overall demand and competition for real estate needs to increase greatly. Otherwise it will be confined to the highest demand areas of which alot seem to be the OO stock, within 10km of the CBD.

My strategy for Brisbane has always been buying in the best suburbs, then add value ,duplicate and sell. Very generally speaking, I'd find Brisbane less forgiving then Syd and Melb if you buy the ' wrong' property, but more forgiving than Perth, Adelaide etc.

 

It’s a cultural thing.
Historically, auctions have never been popular in Brisbane.
In the past, auctions were seen as a “last resort” or desperate measure.
Things are changing gradually, starting with the higher priced properties more likely to appeal to interstate buyers who are used to the auction scenario.

 

sure, completely understand that. Do you think the fact that its not a popular selling choice here, is in part A reason why we don't see the sharp growth here?

 

Still a lot of Auctions every week in inner Brisbane,From everywhere i look when walking around there is a sea of sold signs ,it may not be into the 20k a months upwards like the past trends but it's starting to look good..
64 Tarrant Street, Mount Gravatt East, Qld 4122

 

Brisbane has not seen the population and jobs/income growth that Sydney and Melbourne have enjoyed.

Prices rise because demand increases, and people earn enough to pay higher prices. The method of selling has nothing to do with it. If auctions were abolished tomorrow, Sydney and Melbourne prices would remain higher because the demand is there.

Brisbane’s (and Queensland’s) main problem is a lacklustre state government that fails to make decisions, meaning the state is just drifting along with no impetus.

 

Nail on the head there. As I said in my long boring post above. It's all about demand. Even in Syd and Melb when sentiment is down and markets not growing, auctions tend to be lower and 'for sale' takes over.

 

You didn’t mention our great Treasurer .

At least she is buying property, albeit with insider information, and forgot to declare the purchase .

Now she is Acting Premier. Not bad work if you can get (away with) it .

 

She must be a genius!

Only penalty for committing “what should have been a crime” was a reduced workload for the same pay. AND gone very quiet on her promise to dispose of the property.....

 

Woolloongabba/east Brisbane wouldn't be a bad buy in my opinion. it will be a busy wee hub in a few years!

 

Thanks Marg, I often hear its a state Govt issue but haven't been hear long enough to understand it.

What would they do differently that would impact Brisbane?

I understand there's 39b worth of projects in the pipeline over the next 6yrs, alot of govt & private spending. is this the difference we need? Will create a lot of jobs and the new lifestyle precincts will make an all ready liveable city, even better. Or am I missing something?

 

Private spending relatively low at the moment other than the obvious at Queens Wharf. Not much else out there big project wise from a private point of view.

Public wise Cross River Rail has been a long time coming but its a bit much to lay it all at Labors feet on why its taken so long. The first proposal was ready to go before the LNP won the election and ditched a ready made project because of costs then cooked up a worse proposal that wasnt much cheaper.
Then sold off resumed land in the Labor corridor killing the original proposal.
Also the federal govt has spent years jerking qld around because we refused to sell off public assets like NSW. NSW got their share of federal funding but Qld are going it alone on CRR.

Labor are notoriously slow at delivering their projects vs the LNP. If we could have Labors proposals delivered by the LNP we'd be onto a winner but will never happen

 

I've thought about this and while I do believe CRR will benefit the area, its restrained by major thoroughfares, industrial precincts and largely flood-prone. Plenty of opportunity within walking distance to the new rail, however most areas outside this still suffer from those issues mentioned. Perhaps it needs something to distinguish itself from a lifestyle perspective like New Farm Park, West End Markets or Southbank...