Welcome to the November edition of Month in Review
We were honoured to host our annual Southeast Queensland Property Overview Breakfast this month. The event is in its 35th year and we presented to a packed house of well over 550 attendees. This breakfast is an opportunity for us to do a deep dive on the information our teams have collated throughout the year.
One of the more frank and somewhat confronting observations is that it’s apparent there’s no quick fix for the immediate rental crisis in our region – and a lack of housing supply is the root cause. Of course, the Queensland experience isn’t unique in this, but is a familiar template for discussion.
One consolation is that the supply issue is finally gaining prominence at all levels of government. While ambitious targets around national housing construction have been announced by politicians, the practicalities of meeting those benchmarks will be challenging. Short-term relief is needed, and in my mind, that requires engagement with mum-and-dad property investors who supply around a third of all rental accommodation. A recent move by Western Australia’s government to incentivise investors away from short-stay and into the long-term rental markets may provide guidance for other jurisdictions to follow.
The Brisbane City Council has also started to introduce incentives for developers to increase supply, but that is the tip of the iceberg in terms of what is needed in our region. Market forces should also compel solutions. For example, an increase in the number of people per home seems inevitable – in fact, it’s already happening, particularly via multi-generational households.
On the same day Australians were enjoying the Melbourne Cup, the RBA announced another 25-basis point increase to the cash rate – it’s 13th rise in 18 months. It was a stark reminder that despite many experts predicting we were at the peak of the rate cycle, the Reserve’s campaign against inflation remains a priority… and they may do more yet to stymie the cost of living.
Unfortunately, increasing interest rates are and will continue to be an impediment to increasing supply both for owner-occupiers and investors. Serviceability thresholds remain a barrier to would-be buyers and investors.
There is potentially some capacity emerging in the low-rise housing construction market, but the volume of medium and high-rise residential projects remains constrained, with the ability of developers to deliver new product hampered by rising costs and limited capacity.
The impact monetary policy will have on our markets will continue to be significant. Property stakeholders want certainty rate increases are done, but the RBA isn’t delivering that as yet.
Looking to this month’s edition of the Month in Review and our teams have produced another extraordinary report. Our residential experts have chronicled their 2023 prestige property markets, including lists of the nation’s highest priced sales and rentals.
On the commercial front, Herron Todd White’s industrial property valuers have conducted a retrospective analysis of their service areas.
Finally, our rural experts deliver their commentary, including a comprehensive list of some of the most significant primary production sales to have occurred this year.