Brisbane house prices have fallen more than units this quarter but, as a capital city, it’s holding up better than most, new data shows.
At first glance, Domain’s latest quarterly house price report makes for sombre reading — houses are down 1.2 per cent and units down by one per cent — but given some context, Brisbane’s housing market is performing relatively well.
Year-on-year, houses in the Brisbane LGA are still up 1.8 per cent; a strong result compared with Sydney, which recorded the largest annual fall in house prices (-4.5 per cent) since 2008.
Brisbane house prices have fallen by more than units this quarter, a new report from Domain shows. Photo: Tammy Law
Melbourne house prices are down 1.8 per cent this quarter, while over the year it’s seen a marginal price increase of 0.5 per cent, representing the slowest annual rate of growth since 2012.
House prices in Greater Brisbane, which includes Brisbane, Ipswich, Redland, Moreton Bay and Logan LGAs, have performed better as a whole than Brisbane LGA itself, rising by 2 per cent over the past 12 months. In five years, Greater Brisbane house prices have grown by 26.8 per cent.
Domain Group data scientist Nicola Powell stressed that Brisbane’s negative house price result this quarter was not a sign of things to come.
Brisbane house prices are down 1.2 per cent over the quarter but they’re still up 1.8 per cent over the year. Photo: Tammy Law
“This negative movement for the city of Brisbane is more down to normal seasonal slowdowns at this time of the year,” she said.
“Overall, Brisbane’s growth is what I’d call modest. The thing that Brisbane has going for it is that it has avoided that east coast price surge.
“Nationally we’re seeing house prices go down in nearly every capital city in Australia but in Brisbane, it’s almost the best in a negative market — and the population growth coming from interstate migration will act as a buffer to that downturn … that’s a good thing for Brisbane’s house prices moving forward.”
Cranes are a common sight on the Brisbane skyline as construction continues on high-density developments. Photo: Robert Shakespeare
A recent residential property survey carried out by NAB revealed property professionals believed Queensland’s housing market would lead the country for capital growth over the next one to two years — but by “leading the country”, they did not mean Brisbane’s house prices would flourish.
On the contrary, they scaled back their predictions, forecasting Brisbane’s house prices would rise by only 0.1 per cent this year and not move at all next year.
NAB Group chief economist Alan Oster said Brisbane’s housing market was unlikely to boom in the next couple of years.
Brisbane’s relatively affordable property prices will continue to draw interstate migrants, cushioning the city from the impacts of falling house prices down south, Nicola Powell says. Photo: Tammy Law
“We see the housing market as flat and I see that continuing for the next couple of years. That’s the big picture,” he said.
“If people are arguing Brisbane is where everyone is going to go next, well, they’re not — they’re all in Hobart.”
However Mr Oster said Brisbane’s steady housing market was not a cause for concern and just “part of the normal cycle”.
Alan Oster says Brisbane’s growth has been steady and that people “shouldn’t expect prices to keep going up forever”. Photo: Tammy Law
“One of the things that tends to get lost — prices may not be booming but if you look at Brisbane, prices are 11 per cent higher than they were three years ago. You need a bit of context,” he said.
“You shouldn’t expect house prices to go up forever.”
The Domain report also showed Brisbane LGA units dropped 3.2 per cent in the past 12 months but Ms Powell said the rate of decline had slowed.
“What we’re seeing in the unit market is that it’s working its way to balancing out,” she said.
“It’s taking a while for that to occur but advertised stock is declining. We will see a relative balance because Brisbane has that population growth increasing.”
Unit values in Greater Brisbane continued to decline, dropping 6.4 per cent over the past 12 months. They are now back to prices seen in early 2014, following four consecutive quarters of decline.
Mr Oster said units were still a “worry” for NAB.
“Not all units are performing badly but I think the broader unit market hides some problems in specific markets,” he said.
“The Brisbane postcode says to us that houses are fine but apartments are not fine … our forecast is we don’t see apartment’s improving in 2018 or 2019 … or in 2020 either.”