According to the latest forecasts, Brisbane is expected to overtake Melbourne in the rate of growth in home values next year.
After years of trailing Melbourne and Sydney in the Hedonic Home Value Index forecasts, Brisbane was expected to surge into second spot, closely on the heels of Sydney, as better employment conditions and low interest rates play out here.
The prediction was that Melbourne’s market was “nearing a peak and could be entering a slump because of high incoming supply”, according to the latest CoreLogic-Moody’s Analytics Australia Home Value Index Forecast, out this morning.
Last year Brisbane home values rose 3.8 per cent (compared to 9.9 in Melbourne and 14.9 in Sydney), but in 2016 that gap was expected to narrow (Brisbane 5.8, Melbourne 7.1 and Sydney 7.3).
But the 2017 figures were the most shocking for Melbourne, where the forecast was a backward step of -0,2 per cent, while Brisbane was expected to grow 6.1 per cent, close to the pace of Sydney (6.7 per cent).
According to the HVI, house values nationwide were expected to rise 6 per cent this year and 4.1 per cent next year, driven mostly by continued gains in Sydney.
It found signs of a recovery were already evident in Brisbane and Perth over the second quarter 2016.
“Brisbane’s improving job market is lifting house values,” the report said.
“Overall employment conditions have remained steady in Queensland, although the 6 per cent jobless rate is slightly higher than the national average. Brisbane’s improving job market is mitigating the effects of weaker mining employment in the rest of Queensland,” the report said.
“This bifurcation in employment in the state is reflected in the differences in housing performances. Brisbane’s house values are forecast to rise 5.8 per cent in 2016 and 6.1 per cent
in 2017. But they fell 0.3 per cent in the rest of Queensland in the first quarter. However, the 1.1 per cent increase in March shows that the market is turning a corner,” the report said.
“That said, values across the rest of Queensland are expected to stay fairly flat over the medium term, growing just 0.4 per cent in 2016 and 1.3 per cent in 2017.”
Original article published at www.dailytelegraph.com.au by Sophie Foster 9/6/16