Place Advisory’s Annual Buyer Sentiment Survey for 2018 has recently come to a close. This survey provides useful insights into what real people in the market place think about the current Brisbane property market, identifying trends and revealing what people want in their next purchase.
How Do Buyers Feel About the Brisbane Property Market?
Many factors affect what people think about the property market, but ultimately, perceptions of the property market will have the biggest impact on its performance. That is, the market will likely perform better when more people see it as a good time to buy. In 2018, only 39% of respondents thought that the Brisbane property market had improved over the previous 12 reflecting wider market sentiment regarding the Brisbane market. Since 2014, there has been a continual belief that the Brisbane market has been softening and this is portrayed in the results collected.
What Are the Biggest Concerns of Buyers?
Understanding what people think about the market is one thing, but knowing what is really bothering them is another. Understanding the concerns of property investors provides a clearer picture of the market moving forward. Place Advisory’s 2018 Buyer Sentiment Survey has revealed that market uncertainty is by far the biggest concern. However, this is less of a concern than in previous years suggesting that the future of the property market is becoming clearer.
Just like in 2014, when market uncertainty decreased, purchaser concerns turned toward the ongoing costs of holding the property. 24% of respondents claimed this was their biggest concern in 2018 – Double the result of 2017!
What Do Buyers Want to Purchase?
The laws of supply and demand stipulate that when there is more demand, then prices will go up (all else being equal). Therefore, knowing what potential purchasers want to buy is of critical importance in most property investment scenarios.
Detached houses have consistently been the most desired property type over the years among survey respondents. However, Place Advisory has identified a resurgence in apartments as the most desired property type. After reaching a low preference rate of 20% as the overall apartment market struggled in 2017, apartments are now the preferred property type of 26% of survey respondents. This is no surprise to Place Advisory as we are currently seeing a shift in market fundamentals which signify a more positive outlook for the Brisbane apartment market in the coming years.
Preferred Bedroom Configuration
Results from Place Advisory’s 2018 Buyer Sentiment Survey have also confirmed the continuation of, and possible reversals, of trends in bedroom configuration over the years. Whilst, one and two bedroom configurations have been less desired by respondents over recent years, two bedroom plus study configurations increased in preference for the first time in the last five years. In 2018, 29% of respondents indicated that they would prefer to purchase this type of configuration, up from 25% in 2017. Three bedroom plus configurations remain the most sought after product type at 48%, after having experienced growing demand in recent years.
When do Property Buyers Want to Purchase?
Being able to pre-empt demand in a market allows you to take full advantage of gains and reduce downside investment risk. Place Advisory has identified three main trends in regards to the preference to buy timeframe:
- Overall, 85% of respondents in 2018 were interested in purchasing property within the next five years.
- 45% of respondents in 2018 wanted to purchase property within the next 12 months (short term). This is the first time an increase has been seen in this timeframe since 2014.
- 40% of respondents in 2018 indicated that they would like to buy property within the next two to five years (medium term). This is the lowest level recorded since 2014 when 39% of respondents indicated that they wanted to buy property within this time frame.
Lower levels of market uncertainty, and other factors, may be enticing higher levels of property investment in the short term.
Preferred Region of Brisbane to Purchase a Property
Inner Brisbane and Outer Brisbane recorded modest increases in preference in this year’s investor survey. This is most significant for Inner Brisbane which has declined in preference significantly over recent years. In 2018, 31% of respondents indicated that they would prefer to purchase property within five kilometres of the Brisbane CBD. However, for the third year in succession, an increasing amount of respondents (29%) indicated a preference to buy in a location other than Brisbane.
Preferred Facilities
To finish, Place Advisory reveals the most preferred facilities, if any, and the most important purchasing drivers indicated by respondents in our 2018 Buyer Sentiment Survey. These are the finer details of what potential purchasers are looking for in a particular property and may be the make or break of selling your property.
There are plenty of new apartments being built in Brisbane offering a variety of facilities. Whilst most people would enjoy being able to utilise them, are they actually what people want in a property.
The overwhelming winner of this list is a pool. This comes as no surprise given all the sunshine experienced throughout the year in Brisbane. The next preferred facility was none at all, likely as a result of a growing concern about ongoing costs of owning a property and a desire to keep costs down. Gym came in third with 15% indicating this as their preferred facility followed by rooftop deck (14%).
Purchasing Drivers
Buyers have indicated that an investment property should have a focus on convenience and lifestyle. Being close to the CBD (28%), Public Transport (20%) and Retail and Entertainment options (16%) are the biggest three drivers when purchasing a property for 2018. These drivers all focus on the ease of lifestyle, reduced commuting times and a social life.
Summary
Fundamental shifts in the Brisbane property market, including the significant reduction in apartment development construction, rental market stabilisation and an increasing rate of population growth, are having an impact on trends seen among potential property purchasers throughout the market. The Brisbane property market is perceived to be performing at its worst over the last 12 months, however, the future appears to be clearer with concerns moving away from market uncertainty and an increase of interest to purchase property in the short term. A slight downward trend in those interested in purchasing property continues whilst, buying in a location other than Brisbane continues to gain preference.
Respondents have made their thoughts clear – Overall, they are still learning to trust the Brisbane property market again. With the emergence of some new trends, and shifting market fundamentals, Place advisory expects to see preferences shift back to Brisbane property in the years ahead.