Morning Briefing: Major lender predicts two years of falling property prices

A major lender has predicted property prices will fall by up to 7.5% over the next two years... Real estate agency looks to open more Queensland property to investors...

Morning Briefing: Major lender predicts two years of falling property prices
Macquarie Bank predicts two years of falling property prices
According to a report from Macquarie Bank’s wealth management division, the bank is predicting property prices will fall by up to 7.5% over the next two years.

The note claims slow population growth and an oversupply of apartments will combine to cause the price adjustment.

"The combination of strong supply and weak population growth means that the housing market has a period of adjustment ahead of it," the note said.

"The extent of house price adjustment is contingent upon the pace of retrenchment in the supply of new housing into the market.”

Macquarie Bank also predicts construction levels will fall in the near future, with the number of new homes built – which are currently at 200,000 plus – to fall to 161,000 by June 2016 and then to 150,000 in the year to June 2017.

The bank’s note also said the price correction period could last even longer than two years as it is likely to occur during a weak period in broader economy.

"The absence of factors that supported previous adjustments also suggests that the adjustment phase to the current episode may be longer, slower and more prone to shock than prior instances.”

"Additionally, more may be required of prices, construction and rates to drive normalisation.”

Macquarie’s fear of oversupply issues put the bank at odds with the head of one of the country’s biggest residential developers.

Stockland chief executive Mark Steinert said last week that oversupply in Australia’s biggest markets would be avoided as the Australian Prudential Regulation Authority's actions on investment lending growth had resulted in numerous projects not going ahead.
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Real estate agency looks to open more Queensland property to investors
A major Queensland-based real estate agency has taken notice of the state’s growing popularity with interstate investors and is now specifically targeting them.

RE/MAX will use the upcoming Property Buyer Expo in Sydney to launch its promotional arm, RE/MAX Advantage Project Marketing to investors as it looks to build on the popularity of the Queensland’s south east corner with interstate investors.

Included in the launch will be the live auction of a number of recently completed apartments and townhouses in the Queensland coastal suburbs of Wynnum and Manly.

RE/MAX Advantage Project Marketing director and RE/MAX franchise owner Tandi Gill, said the upcoming expo had become the perfect time and place for the launch.

“In recent months we have noticed a significant shift in investor enquiry coming from Sydney and other interstate areas interested in Bayside and the greater Brisbane region. The idea of launching the project marketing company has been in the pipeline for over two years following demand from developers requiring a platform to launch off the plan projects,” Gill said.

“It made sense to officially launch the new business in Sydney due to its heated market in parts and interest in South East Queensland from Sydney investors. Thousands of investors will be present at the expo, providing the perfect vehicle to showcase what South
East Queensland has to offer,” she said.

Gill said south east Queensland regions such as the Sunshine Coast, the Gold Coast, Brisbane and Toowoomba are at the beginning of a “definite spike” in interest from investors.

“We feel this is just the beginning and we expect it to continue, especially while property prices remain relatively stable in Brisbane,” she said.

“We’re expecting continued interest from interstate investors and perhaps more interest from overseas investors as well.”
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