HOUSING affordability in Brisbane is at a tipping point, with one of the Big Four banks signalling an end to the days of the Queensland capital being a much cheaper alternative to its southern counterparts.
Economists at ANZ believe the river city’s “relative affordability” compared with Sydney and Melbourne has likely reached its peak, with a further 10 per cent peak-to-trough fall in home prices forecast for both cities, while Brisbane prices continue to hold firm.
“We’re not suggesting the median house price in Brisbane is going to exceed Sydney’s, but the gap between the two may be at its peak,” ANZ senior economist Joanne Masters said.
“The connectedness of prices means that the affordability dial is unlikely to continue to shift further in Brisbane’s favour, particularly if there’s a supply-demand mismatch.”
Ms Masters said Brisbane was at risk of becoming a two-speed property market, with the supply of apartments coming on-stream unlikely to satisfy the demand for stand-alone houses from interstate migrants.
That would result in a likely rise in house prices.
“Much of Brisbane’s construction has been aimed at the investor segment, with a prevalence of relatively small apartments,” she said.
“We are now seeing demand rotate from investors to owner-occupiers who typically look for larger homes, which could lead to a mismatch and a two-speed market.”
The latest data from property researcher CoreLogic shows 29 per cent of apartment resales in Brisbane were at a loss in the first quarter of 2018, compared to only 2.2 per cent in Sydney and 10.4 per cent in Melbourne.
The 2016 Census showed nearly 15,000 more people lived in apartments than in 2011 in Brisbane’s centre, and more than 27,000 more lived in one bedroom apartments.
But Propertyology head of research Simon Pressley said he rejected ANZ’s view.
Mr Pressley said Brisbane’s median house price was more affordable than 14 other cities, including several regional cities such as Ballina, Port Macquarie, Shoalhaven and Shellharbour.
“If there’s one major drawcard that Brisbane has it’s housing affordability,” Mr Pressley said.
“Aside from new inner-city apartments, dwelling supply is quite well balanced, it has affordability in spades, and tens of thousands of people are relocating away from Sydney and Melbourne each year.
“The missing ingredients have been private sector job growth, local confidence and modern lifestyle attractions.”
Independent housing analyst Michael Matusik said he did not expect home prices in Brisbane to change much over the next two to three years.
“The economic, political and even social conditions looking forward are very different from the past,” Mr Matusik said.
“There are very few trends that will drive housing prices generically up, and heaps more that will keep them flat at best, but mostly lead to declines.”
Source: www.news.com.au