Brisbane property prices have risen over the past 25 years. And we hope that this will continue over the next 25 years. But what’s the deal with Brisbane property prices in 2018 and what can we expect over the next year or so?
What will Brisbane property prices do?
A key difference between 25 years ago and now is the interest rate on most mortgages. The current interest rates on owner-occupier mortgages are at some of the lowest levels ever seen. This means that “mortgage serviceability” (the ability of the borrower to meet mortgage repayments) – is much more manageable. When interest rates are low, banks are generally willing to lend people more and this in turn sees higher property prices.
In the current economic climate there are whispers that higher funding costs being imposed on banks could see mortgage rates edge higher. However, rates would need to rise by more than 150 basis points to return to the 20-year average of 6.8%.
Brisbane property prices have so far in 2018 grown ever so slightly and most commentators believe this moderate performance will either be maintained or prices will at least hold steady. For example, a recent Residential Property Prospects 2018-2021 report from BIS Oxford Economics predicts that the Brisbane market will grow modestly over the next two years.
But, if things do turn south and you’re worried about property prices, Finance Expert Noel Whittaker has some sage advice – “When markets crash, as they do from time to time, hang in there. All you do when you cash out [sell] is turn a theoretical loss into an actual one.”
If you are thinking of selling why not contact our agents for an appraisal on the current market value of your property and some advice on the state of the market. After all, a chat with an agent could help avoid an inopportune “cash out”!