Selling, buying or renting a house in Brisbane could all be impacted in different way

Ahead of a potential ALP win at the federal election, predictions about the Brisbane residential property market abound.

Some show a common theme while others downright contradict each other.

As I gaze into the crystal ball, these could be some potential scenarios:

• Houses and units are two different markets in Brisbane. The house market is experiencing slow and steady growth but the unit market is in recovery mode.

• Conditions favourable to both markets in the next few months may come from the ALP’s policy on negative gearing and capital gains tax discounts. There could be a temporary increase in demand for existing residential properties in Brisbane as people try to snap up properties that may no longer be negatively geared under an ALP government.

• This may be more pronounced in Brisbane as housing prices are still significantly more affordable here compared to Sydney and Melbourne, despite the latter’s declining markets. Data appears to suggest that net migration to Queensland has been on the rise.

• Any “mini boom” in the Brisbane housing market may also favour the “second-hand” market, rather than new builds, as there is a perception that older properties generally have bigger floor areas and better “guts” for improvements. New builds are also not subject to the same negative gearing restrictions if enacted, which may further ease their demand.

• Naturally, the availability of credit and future interest rate movements will be big factors affecting whether the mini-boom is realised in full. This affects how the lenders will behave, due to the impact of the outcome of the royal commission on banking.

• Once the ALP’s policy comes into full force, on the back of the mini-investment boom, there may be excess residential stock coming on to the market. This may drag down existing rental yields and hamper price growth for some time. However, normal market forces

will eventually prevail to normalise the market.

• As long as the ALP’s policy persists, there may be a permanent bias in favour of new builds from the investors’ perspective, while new-home buyers may prefer existing stock to avoid the competition.

Eddie Chung is a BDO partner, Tax & Advisory, Real Estate & Construction.