Brisbane's property market is on fire, with house prices set to soar by almost 20% over the next two years, according to a KPMG report. But here's the controversial part: despite affordability constraints, the market is still overheating, especially in cities like Perth and Brisbane. The report predicts a 10.9% rise in house prices this year and an 8.9% increase in 2027. Units are also expected to rise by 7.8% this year and 4.9% next. So, what's driving this surge? Well, it's a combination of factors. The federal government's 5% deposit scheme is making it easier for first-time buyers to get into the market, but it's also creating a bidding war, with buyers willing to pay more than the supply shortage justifies. As a result, the market is outperforming expectations, with young people seizing the opportunity to break the rent cycle and lock in their first home. But here's the catch: the supply constraints are only getting worse. Brisbane's population growth is outpacing housing supply, leading to rising costs and intensifying competition at the affordable end. The government is trying to address this by committing to building one million new homes, including 53,000 social and affordable homes, by 2044. However, the main downside risk to the outlook is the growing affordability constraints facing first-home buyers. So, what's the solution? The government is 'hell-bent' on increasing supply, but it's a challenging task. The report highlights the need for a balanced approach, with a focus on both supply and demand management. As the market continues to heat up, it's crucial to ensure that first-home buyers have access to affordable options. The question remains: can the government's efforts keep up with the rising demand?
