What's Causing the 2020 Real Estate Boom in Queensland?

What's Causing the 2020 Real Estate Boom in Queensland?

Real estate agents are reporting a sudden spike in property activity from homebuyers. Want to know what's causing this supposed 2020 real estate boom in Queensland? Read up and get the latest on the QLD property market for the year's first quarter!

In this article:

  1. Lower Interest Rates
  2. Relaxed Lending Limits
  3. QLD Economic Growth
  4. Coalition Win in the 2019 Elections

The 2020 Real Estate Boom in Queensland: 4 Driving Factors

What's Causing the 2020 Real Estate Boom in Queensland? | A9 Property, Brisbane Real Estate

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1. Lower Interest Rates

A big driver that's causing the current real estate boom in Queensland is affordability.

This doesn't exactly mean that QLD properties are selling at lower prices. Instead, interest on mortgage rates is seeing a trending decline.

According to seasoned agents, dropping interest rates benefit Millennials and Gen Zs the most, increasing the younger generations' purchasing power. Lower interest rates also encourage mortgage applications, giving borrowers more confidence in their ability to pay.

So, how low have mortgage interest rates for QLD properties gone this January 2020?

No numbers are final yet. The most conservative estimate on mortgage rates is that they don't change at all. But on the positive end, property agents forecast interest rates to go down as low as 0.5% by March to April 2020.

Average interest rates for QLD properties going as high as 3.0%. If forecasts hold, the projected interest rate cuts are down by almost 83%. These interest cuts can save homebuyers thousands of dollars in the long run.

What's Causing the 2020 Real Estate Boom in Queensland? | A9 Property, Brisbane Real Estate

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2. Relaxed Lending Limits

Homebuyers during the first quarter of 2020 now have easier access to housing loans. This was initiated by the Australian Prudential Regulation Authority (APRA) group who relaxed lending limits in the later part of 2019.

What exactly is APRA, and how do they influence the property market in QLD?

APRA is a government institution tasked to safeguard Australia's financial industry. They ensure that all fund management, credit union, mortgage, and insurance institutions are regulated and stable to prevent financial crises in the future.

Part of what makes APRA so influential in investment property is their power over general mortgage lending practices. They are in charge of dictating terms for many property-related transactions, including the following:

  • Mortgage-lending steps and restrictions
  • Property investment steps and regulations
  • Loan stress tests to determine applicants' ability to pay

As a property investor or first-time homebuyer, staying updated on APRAs regulations is a must.

APRAs game-changing regulation last 2019 made it easier for first-time homebuyers to apply and get approves for housing loans.

Their new rules now allow banks to forego conducting stress tests on their first-time loan applicants. Lenders also have more freedom to dictate serviceable buffers based on what their customers can afford.

These new regulations do have limits:

  • Customers have to agree to interest rates not lower than 7%
  • Serviceable buffers can't go lower than 2.5%

Agents forecast that with these relaxed lending limits, a first-time homebuyer can borrow $50,000 more than the usual for a home downpayment.

RELATED: How Big a Deposit Do I Need?

What's Causing the 2020 Real Estate Boom in Queensland? | A9 Property, Brisbane Real Estate

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3. QLD Economic Growth

Queensland is slowly reaping the benefits of its economic investments. These refer to the state's mining investments, particularly in the Brisbane area.

Increased mining investments stand to benefit Brisbane's working population, as it opens up new job opportunities and breathes more money into the city's economy.

Property experts believe that a bustling industry bodes well for housing prices and increases the overall property value in the area.

What's Causing the 2020 Real Estate Boom in Queensland? | A9 Property, Brisbane Real Estate

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4. Coalition Win in the 2019 Elections

The Coalition's recent win in the 2019 Australian elections is also contributing to the real estate boom in Queensland.

During the campaign trail, the Coalition advocated for more business- and investor-friendly policies. An example is their First Home Deposit Scheme which is geared towards younger savers.

The policy grants first-time homebuyers earning from $125,000 to $200,000 can borrow up to 15% of a property's purchase price given they can shoulder 5% of the initial deposit as opposed to the usual 20%.

With this new policy in place, homebuyers can avoid paying lenders mortgage insurance and other penalties. This, in turn, helps buyers garner more significant savings in the future.

What's Causing the 2020 Real Estate Boom in Queensland? | A9 Property, Brisbane Real Estate

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So, what's causing the 2020 real estate boom in Queensland? Lower interest rates, relaxed lending limits, steady economic growth, and investor-friendly policies are driving more and more property purchases. While projections look positive for QLD properties, don't rest on your laurels! Remember, it's always better to make property investment decisions based on your own financial capabilities and goals.

Do you have any questions about the 2020 real estate boom in Queensland? We've got answers! Contact us now, and we'll help you find the best Brisbane properties to invest in.

UP NEXT: Brisbane Rental Price Trends 2019

About A9 Property

A9 Property is a team of property specialists helping first-time homebuyers and property investors on their journey into the real estate market. Our weekly real estate blog touches on industry trends, market shifts, and investment strategy, providing you with valuable insight into your property purchase journey. We are experts who specialise in off the plan properties–a popular investment strategy in Brisbane and Australia. Check out our carefully selected portfolio of off-market properties for sale or contact us for an obligation-free chat to discuss the best strategy to start building your portfolio.

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