Another federal election…
Another federal election is looming and, as expected, there is uncertainty in the markets.
There has been quite a bit of media hysteria surrounding potential impact on the investor property market, and the ramifications on the residential property market as a whole.
Here are some facts:
- An oversupply of investor product has been building for quite some time, particularly in Sydney and Melbourne. GPS saw this happening and we either did not get involved (inner city) or we have been out of that market for quite some time.
- The Brisbane market for residential property has been flat for quite some time. It did not see the growth of southern capitals. The rises and falls discussed in the media are usually in percentage points, which are negligible. In property some areas do better, some do worse, and many of these statistics need to be questioned as to whether the number of sales is sufficient to generate a reliable result.
- There has been a significant decline in new project starts in Brisbane. Particularly for larger apartment projects, which will amplify the decline in new product becoming available. The oversupply is in the process of being absorbed.
- The banks are increasing their lending volumes with a drive towards the owner occupier market.
The role of GPS is to understand the residential property market and lend for product in areas that will sell.
You will have noticed that GPS has moved to funding more townhouse and owner occupier unit projects. While there has been some slowing in sales product, they continue to sell for valuation prices.
I will refrain from commenting on what I think about some of the proposed policies being put forward by some of the political parties. That is not the role of GPS. Our role continues to be to act in your best interest and to be ready for every circumstance.
Richard Woodhead – Managing Director