Warning for first-home buyers as southeast Qld prices surge

With housing affordability on the decline, those seeking the great Aussie dream have been warned they may have to settle for less.

Housing affordability is predicted to decrease in coming years, with first-home buyers across southeast Queensland being told to be more realistic with their expectations.

But one industry boss said while some real estate agents could not get enough listings to satisfy demand, there were still Brisbane suburbs where freestanding houses were selling for $550,000 or lower.

It follows new figures which revealed the construction of new houses in Queensland will decline to just over 20,000 during 2022-23 – a level not recorded since early 2014.

Property expert Chris McKnoulty said he expected to see a bigger gap between desirable and less desirable areas to live in coming years.

“Also I think housing affordability is going to decrease on the back of low interest rates,” he said.

Mr McKnoulty said interstate investors were buying a lot of property, which was driving up prices.

Asked whether there would be less stock because people were making the move to Queensland, Mr McKnoulty said absolutely.

“It’s expected now that we will pay a bit extra,” he said.

Mahesh Sainani bought at auction in Yeronga. Picture: Annette Dew

The figures, released by the Housing Industry Association this week, revealed Queensland’s housing market had been more resilient than New South Wales and Victoria during the COVID-19 recession.

While detached starts reduced by 3.6 per cent to 4962 during the September quarter, the HIA has forecast starts to pick up by 30.3 per cent during the December quarter.

The HIA, which is one of the country’s most influential housing groups, predicted the construction of new houses should stay above 6000 per quarter during the next four quarters because of HomeBuilder grants.

But a two-year decline is expected during 2022-23.

For new multi-units, the HIA forecast starts will bounce back during the December 2020 quarter because of strong approval numbers.

They will then climb slowly, reaching an annual 14,000 by early 2025 which is significantly lower than the 26,322 which was recorded during 2015-16. Mr McKnoulty said first home buyers should take what they can.

“Buy something that’s affordable without putting yourself in a precarious debt situation,” he said.

“People will need to move out of the city or decide the dream family home will be a townhouse in Carina, which is fine.

“I think that’s just going to be a reality.”

Mr McKnoulty said for detached housing, affordability was tough.

REIQ chief executive Antonia Mercorella

“It’s at a point where there’s equal cost in buying a house and in renting and that’s pushing people toward buying a house,” he said.

“Until that changes, which changes by house prices going up, so that it’s cheaper to rent again, it’s probably something we’ll continue to see.”

HIA chief economist Tim Reardon said housing affordability in coming years would depend on the return of overseas migration. 

REIQ chief executive officer Antonia Mercorella said the Queensland market was “simply on fire”.

“Real estate agents cannot get enough listings to satisfy demand,” she said. 

Ms Mercorella said there wasn’t enough new construction and there needed to be more land supply. 

“The reality is we can’t all be living in the middle of Brisbane any more,” she said. 

“If the market continues to perform like it has been, there’s no doubt that house prices will continue to rise.”

Ms Mercorella, who acknowledged there were still suburbs around Brisbane where freestanding houses were selling for $550,000 or lower, said the reality was that for first home buyers, their first property was not always going to be in their preferred suburb.

Opposition Leader David Crisafulli said this showed the “urgent need to bring forward infrastructure to protect our Queensland lifestyle now and provide more housing options for the future.”