Figures go behind the boom
THE REIQ released its 29th edition of the Queensland Market Monitor last week, reporting on the December quarter figures and revealing the Brisbane real estate market had recorded its 14th consecutive quarter of growth, to hit a new median of $632,000.
The Queensland Market Monitor looks at a range of factors that measure the activity within the real estate market. If you’re interested in the Queensland real estate market, this report is a must-have.
Here are a few tips for understanding the report and a quick look at what’s included:
The median is the middle occurring number when you take out the highest and lowest numbers.
For example, if five houses sold in one street for $455,000, $460,000, $465,000 and two for $470,000, the median sale price is $465,000.
Medians are typically the metric used in house price data reporting as they tend to deal well with any outliers, whether they are high or low, providing a better measure for central tendency for what we are trying to represent.
This is a great piece of information because it tells you where things are selling fast, and on the flip side, where homes are taking longer to sell. Why is that important?
Well, if a suburb is selling faster this quarter than it did a year ago that means it’s gaining in popularity and is an indicator of growing demand within the area.
On the other hand, when time on market is increasing it is more likely buyers will be able to secure a bargain as vendors become increasingly willing to settle for a lower price. Brisbane Local Government Area is the fastest selling market in the state with just 59 days on market and Toowoomba, at 67 days on market, is the secondfastest market in the state.
As the name suggests, this tells you how much the sale price is discounted from its listing price to its final sale price.
Why is this important? It’s a measure of how much sway buyers have over the price – are vendors moving much to meet the market?
Bear in mind that even in a strong sellers’ market vendors usually discount around five per cent.
If you’re an investor looking for a suburb to buy, this data is very helpful. The vacancy rate data gives you a broad indication of how the rental market is faring. If vacancy rates are tight, lower than 2.5 per cent, then there should be a steady supply of potential tenants to your rental property.
Gross rental yield gives you an indication of what rents can be commanded in that suburb, which will help an investor understand options around positively gearing or negatively gearing their property.
These are just some of the metrics that the REIQ QMM report tracks and as an observer of the property market in Queensland these statistics will help you develop a deeper understanding of the market, beyond simply looking at the median sale price.
For more information, visit REIQ.com/qmm.