Australia’s housing-market rebound continued over the last month, led by strong price growth in our two big capital cities, Melbourne and Sydney.
It’s really been a year of two halves.
The year started with significant negative sentiment, including fears about the results of the Hayne royal commission into banking and an upcoming federal election, as well as fears about overseas economic problems including the USA China trade war and Brexit.
In the first half of the year, the Sydney and Melbourne property markets continued their slump, but since bottoming out in June earlier, the house prices have recovered strongly, buoyed by three interest-rate drops some tax cuts and the banks loosening their lending criteria.
However, our markets are fragmented. While the Sydney and Melbourne property markets are showing a clear turnaround, the other states are still lagging.
National dwelling values marked their fifth consecutive month of growth in November, taking dwelling values 3.8% higher over the quarter.
Combined capital city dwelling values were 4.6% higher over the November quarter while combined regional market values only rose by 1.1%.
Brisbane’s property downturn has been quite shallow compared to the big two capital cities, with local values only 0.8% below their peak.
But this followed a relatively mild growth cycle where growth in housing values in Brisbane was only 7.5% over the past five years.
Brisbane house prices increased by 0.9% over the last month (2% over the last quarter) while apartments in Brisbane only increased in value by 0.3% over the last month (0.9% over the last quarter.)
But now Brisbane values have posted their second consecutive month of subtle gains.
CoreLogic reports that since bottoming out in June, Brisbane’s dwelling values are up 2.2% with little difference separating houses and units where the recovery is recorded at 2.2% and 2.1% respectively since June.
The recovery trend has been slightly stronger across Brisbane’s premium market, with the top quartile recording a rise of 2.4% compared with a 1.5% lift across the
The following metrics show how sluggishly the Brisbane housing market is performing:
- The average selling time of a home is 52 days (37 days a year ago);
- Vendors are discounting their properties an average of 4.3% to affect a sale (4.5% a year ago); and
- 13.3% fewer properties sold in the last 12 months compared to the previous year.
With migration rates lifting, supply under control and generally healthy levels of housing affordability, the Brisbane housing market fundamentals are looking healthier compared to most other capital cities.
At the same time the underlying strong demand from home buyers and investors from the southern states at a time when yields are attractive and housing affordability is relatively healthy and putting a floor under property prices.
Brisbane’s economy is being underpinned by major projects like Queen’s Wharf, HS Wharf, TradeCoast, Cross River Rail, the second airport runway and the Adani Coal Mine, but jobs growth from these won’t really kick-off for a few more years.