Louis Christopher's four forecast scenarios for Brisbane's Housing Market in 2021.
I’m a bit of a closet statistics nut.
I love data, particularly in relation to property trends as these actualities help us shape forecasts to find current and future opportunities which I’m all about!
I’m in no way, shape or form skilled in this area but my combined love of property and all thing’s facts and figures has lead me to follow Louis Christopher who is the founder of SQM Research. Christopher’s business reflects his philosophy of “telling it like it is on residential property markets” in terms of supplying data and forecasting future events in the housing market. It’s highly likely you’ve already come across his insights if you’re interested in property, or any asset class for that matter.
Each year Louis releases “CHRISTOPHER'S HOUSING BOOM AND BUST REPORT” which is his forecast for the year ahead (based on a number of scenarios) for the Australian housing market, specifically around:
His personal take on the markets
Capital city forecasts
Main drivers of demand and supply at present and going forward
All leading indicators such as stock on market, vacancy rates etc
Nearly every city and regional postcode covered re: property stats plus ratings outlook
In 2020, Christopher forecast a number of scenarios, the fourth and most volatile was based on “Trade Talks Collapse, RBA cuts rates to zero by end 2020 and Quantitative Easing starts” where he predicted the Brisbane Housing market to hover somewhere between -3% to +1% in terms of growth. No one could have predicted a full-blown pandemic which ended up working more in Brisbane’s favour and ultimately resulted in an annual growth of 4.3% to December 2020 (for the housing market, units growth was much less at -0.3%).
The report is not freely accessible, you can purchase it from the SQM Website for about $60 and is a good buy if you want more granular housing market details on specific suburbs/post codes and a more thorough explanation of the scenarios. But I wanted to summarise some key points from this year’s report specifically on the wider Brisbane market.
While CoreLogic has a more optimistic outlook for Brisbane housing this year, forecasting 10% growth , Christopher is more conservative in his predictions and is looking more in the range of 3-9% depending on which scenario plays out.
Louis Christopher’s four scenario predictions for the Brisbane housing marketing in 2021
Bank’s lending caps are set to be free in March 2021 with responsible lending practices now placed back on the borrower making it easier for (anyone with a job) to get a loan.
Population and Migration
Government forecasting negative net migration for the next two years mostly affecting Sydney and Melbourne.
Regions will continue to grow.
Building completions to remain high (specifically in Sydney and Melbourne).
Vacancy rates will likely rise.
However forging investors still buying property sight unseen so could plug the whole the population gap creates.
The RBA’s and the Federal Government’s intentions are now clear. Interest rates are going to stay lower for longer and the housing market is now regarded as a primary driver of the economy.
Rates are likely to stay low until inflation comes back to target range of 2-3%
Phasing out of JobSeeker and JobKeeper
JobSeeker and JobKeeper payments are planned to phase out in Brisbane in March 2021 which might be okay, but not helpful if we have another full-blown wave of COVID-19.
The best piece of advise I took from this report was this quote from Christopher:
“In times like these, quality assets remain important. If you are going to buy in this market, buy quality. For when the tide does turn, you will be in much trouble if you don’t hold quality.”