• Daniel Hooper

Kedron and Surrounding Suburbs Weekly Market Update⁠ 27.05.22

Weekly Property Wrap Up by Daniel Hooper of One Percent Property




27th of May 2022

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Hi, this is Daniel Hooper from One Percent Property coming to you with your Weekly Property Market Update on Friday, the 27th of May, 2022 for Kedron, Gordon Park and the surrounding suburbs.

So what has been going on over the last seven days? Obviously, we had the election, which traditionally does have an effect on property activity. Having said that, it hasn't had too much of an effect this year. So there were 1,386 sales across Queensland, which is pretty consistent with what we've been seeing over the last few weeks. An auction clearance rate of 63%. It was 65% the week before. Look, bearing in mind that there was an election this weekend, that's actually a pretty good auction clearance rate. Obviously, fewer properties did actually go to auction because a lot of people would've held off until next weekend when people are less focused on what's going on in the country and more focused on, obviously, buying property again.

In the inner north, we had 30 sales, which again, it's actually quite a lot of properties changing hands, taking into account obviously the situation. A few notable sales:

  • 20 Meath Street in Gordon Park sold for $2.55 million. It's a five-bed, new-build on 607 square meters. It's a fantastic result. That's a very good price, very healthy price.

  • 130 Kedron Brook Road in Wooloowin, that one sold for 1.2. It is based on the fact that it's a main road location and the house needed some work. Again, I think it's a very healthy price.

  • Also, 32 Remick Street in Stafford Heights—that one sold for 1.33. It's a five-bed home on 650 square meters. But again, all of these prices, it shows that although the market is definitely slowing down in regards to potentially less buyers and things taking a little bit longer, the prices are still there. We're still getting good prices. We're not seeing things tank as far as prices go. And I think Brisbane is going to be fairly robust going forward in regards to price.

In the media this week, so we've had 0.1% price growth over the last week. So it's definitely slowing as far as growth goes, but certainly not in a downturn. We are still 18.7% under-supplied compared to the five year rolling average. So there's still less properties on the market than there normally are, which, obviously, means less choice for buyers, which means, going to market and getting a good sale and a good price is still a very favorable environment. One thing I wanted to talk about this week, which is obviously it's going to be a big issue moving forward is the labor governments Help-to-buy scheme. So just to give you a rundown of what this scheme is, essentially, the government will take an ownership share in your property. They'll, obviously, pay for that ownership share, which then allows you to get into the property market without, I guess—needing so much money. So, they'll take up to 40% for new builds. They'll take up to 30% for established properties. There are 10,000 places across the country. There are income and price caps. So price caps, varying city to city, income caps is $90000 individually, $120000 for a couple. And you only need a 2% deposit. Now, look this is, obviously, going to be very positive for people wanting to get into the market. And I think it's a good initiative in that regard, but there are certainly some issues that I can see that may come out of this.

And I'll talk about those now.

So, the first one is this is going to bring an entirely new group of people into the market, people that don't have the 10 or 20% deposit, that potentially couldn't afford to buy a property if they're paying for a 100% of the mortgage repayments, because like government share, you don't have to pay rent or repayments on that at all. If you sell the property, you have to repay the government, but during holding the property, you don't actually have to pay anything monthly. So it's going to bring an entirely new group of buyers into the market, which could, potentially, then create more stress on the market and force prices to go up further. Now in Brisbane, it is capped at 650,000. So you're talking probably apartments—maybe a little bit further out around Strathpine and that area. You may be talking houses, but certainly, around the area that I sell, we're not going to be talking houses.

Having said that, it's going to bring more buyers into the lower end of the market, which is, obviously, then going to force prices up because there's going to be more people trying to buy the same number of properties. So it'll be interesting to see whether this does have an effect on the market in regards to forcing prices up, which then sort of negates the fact that you are helping these people buy properties because prices are then going up again. The 2% deposit makes me really nervous because property prices are forecast to go up a little bit this year and then drop five to 10% next year. So if you have a 20% deposit and prices drop 10%, that's fine. You've still got money. You've still got equity in that property. If you sold, you are still walking away with some money. If you've got a 2% deposit on a property and prices drop 10%, you're in serious trouble. Because if you sell, you owe the bank more than that property's worth. It becomes a big problem.

And then that goes on to the next, I guess, question, which hasn't really been, hasn't been established by the government is will they share in the losses? So if your property goes down by 10%, do they take some of that loss in their 40%? Or are you still having to pay them the same 40% as when you purchased the property? Again, that's something that needs to be worked out or needs to be clarified because that's a big thing for the buyer. If you're buying at a 2% deposit and the government has their fixed 40% based on whatever you purchase, they don't take any of the loss, that's a big risk. And then the other one, which I'm still very unclear on is if you increase your income, so let's say you're on 90000 or $85000 a year and you get offered a promotion at work to $95000 a year, as far as what I've seen so far, that would then mean you don't qualify for this scheme anymore, which means you have to sell your property. Now that's not a good situation to be in because are people going to be saying, no, I can't take that promotion at work, because I'm going to be forced to sell my family home. Or what if you have two people that earn $85000 a year? They get married. So now the household income is $170000 a year. They qualify individually, they do not qualify as a couple. Are they going to be forced to sell their home that they purchased in this scheme? And imagine if that situation in the year's time, the home has dropped in value and they're forced to sell, it could be really messy. So I'd be interested to see what the clarifications are around all that. But certainly I think it's a good initiative to help people buy, but there are a lot of risks and potential issues involved, as far as I'm concerned. It'll be interesting to see how they sort of clarify all of that and how they move it forward.

As far as One Percent this week, it's been a really busy fortnight. We haven't launched any properties recently because we've been holding on until after the elections. We did settle on 23 Akaroa Avenue in Geebung yesterday. That property, it was a single level, five bedroom post-war home that was renovated plus a two bedroom granny flat at the back on just over 700 square meters. We achieved $1.53 million for that property, which is by over a hundred thousand dollars—the highest price ever achieved on any property in Geebung under 3000 square meters. So it's a really good result for that one. Launched this week:

  • we've got 54 Bertram Street in Stafford. That property is a really good opportunity to get into a good area of Stafford at an entry level price. It's a 301 block, but still very usable, lots and lots of space. It's a three-bed, one-bath, brick-build, really high-end build when it was built in the '90s. And it's been maintained to an absolute pristine level by the owners. There's an elderly couple that lives there. It's a really good opportunity. The pricing is in the mid nines. We'll be open on Saturday at 11:15 for that one.

  • Also, 331 Ellison Road in Geebung. This is another two-residence property—similar to Akaroa Avenue, three-bed house at the front, two bedroom granny flat at the back. It was only built in 2017. So it's an almost brand new property. High end finishes. It's also being rented for $900 a week. So it's got a significant rental income. We're looking at mid one point threes for that one, and that will be open at 10:00 AM on Saturday.

Over the next few weeks, I've got a lot of properties coming to market. So if you are looking, if any of these sound like what you might be after, please give me a call.

  • 224 Appleby Road in Stafford Heights, 807 square meter block of land. There's a DA on it already to split. The house is in good condition, huge block, obviously good opportunity to get into the area.

  • 67 Homebush Road in Kedron. It's a fully renovated three one on 405 flat block, good area. That one will be launching in just over a week's time as well.

  • 25 Calida Street in Boondall, arguably one of Boondall's best homes. It's a really fantastic high quality build. It's got a pool. It's got multiple living spaces, everything that you would need in a big family home. 22 Bennetts Road in Everton Hills, it is a home with good bones and a great block, needs a few renovations, but definitely a good opportunity. We've got 39 Emerald Street in Kedron. It's a fully renovated, three bedroom home on a small block, good location, great school zones, Kedron State High and primary, walking distance to the park. And again, it's been renovated. It's in fantastic condition.

  • Also, 1303 at 25 Charlotte Street. That is a one bedroom apartment in Chermside. It's currently under the National Rental Affordability Scheme (NRAS), but, obviously, it can be pulled out of that if you want to live in it. Again, it's a fantastic entry level opportunity into the market.

  • And a little bit down the track, 29 Main Avenue in Wavell Heights. That's also coming probably in July. Big block, Wavell Heights, backing onto the park. Another fantastic opportunity, either very livable or also it is postwar, so it can be knocked down.

Lots and lots of properties coming up. Lots of exciting stuff happening. If you think any of these properties might be what you're after, please give me a call. Otherwise, I hope you had a fantastic week so far, and I hope the weekend is even better.

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