Queensland’s housing market has fared better than that in most other states, although it is still not immune to the nationwide downturn, according to the latest data from Moody’s Analytics.
The Queensland property market consists of three distinct groups.
The first region constitutes the bulk of Brisbane, which has experienced healthy growth up to 2018 because of the improved services sector — but now is experiencing a moderate correction, though prices are expected to recover next year, especially for apartments.
The contrast between apartment and house values is most evident in Brisbane-North, where house prices are expected to grow 0.4% in 2020, while apartment prices are set to rise by 6.2%; there is a similar spread for other regions in Brisbane and Greater Brisbane.
Consequently, apartment prices are expected to perform better than house prices for Brisbane (and Greater Brisbane) in the medium term.
Moody’s Analytics forecasts house values to underperform throughout the forecast period, while apartment prices are expected to grow faster after a trough in late 2019 to early 2020.
This is reversal of trend between the two asset classes from the past few years
Katrina Ell, Economist, Moody’s Analytics said: “The effects of a higher supply of houses in the pipeline as well as muted income and employment growth mean that house and apartment values in Brisbane-South will contract by 3.5% and 2.6%, respectively, in 2019, though the area’s prospects for apartment prices in 2020 are better.
“In Greater Brisbane areas such as Ipswich, dwelling prices are suffering after heavy falls in apartment values in 2018, following a period of oversupply.
The second housing area comprised of ‘lifestyle areas’ including the Sunshine Coast, Wide Bay and Cairns, are generally expected to perform better over the forecast period.
“The third housing market region in Queensland comprises commodity or agriculture-producing areas. These include Central Queensland, Mackay-Isaac-Whitsunday, and Darling Downs-Maranoa.
“Housing markets here have seen significant value declines over the past few years partly as a result of the end of the mining boom.
“This year’s uptick in commodity prices and tourism has seen recoveries in areas such as Mackay. However, areas that are more agriculturally geared are forecast to suffer continued declines on the back of drought conditions.”
Source: www.propertyobserver.com.au
