SQM Research now predicts home prices in the Queensland capital to either remain unchanged or increase by up to 3 per cent this year on the back of weak auction results and the investor lending crackdown.
That’s a significant revision from its previous forecast of a rise in prices in the range of 3 to 7 per cent.
But not as bad as the outlook for Sydney and Melbourne, where SQM expects home prices to fall by up to 4 per cent and 3 per cent respectively.
SQM Research founder Louis Christopher blamed a recent drop in auction activity for the Brisbane downgrade.
“Auction activity has been weak with stated clearance rates well below 50 per cent and on some weekends, below 40 per cent,” he said.
“Unreported rates have been very high, suggesting real auction clearance rates could be even lower than these published levels.”
But he pointed out that relatively few properties went to auction in Brisbane, with private treaty campaigns being the preferred method of sale.
The number of properties listed for sale in Brisbane has been trending higher in recent months, mostly driven by inner-city units.
“Building approvals are falling and this will eventually help absorption levels of existing surplus stock,” Mr Christopher said.
“However given the very slow investor take up, it will take many months before the market returns back to equilibrium.”
Nationally, SQM Research has also revised its forecast for home price growth across all the capital cities from -2 per cent to +2 per cent.
Mr Christopher said the main reason for the large forecast range for most cities was SQM’s uncertainty about the impact of the recent lifting of investment property credit growth limits by APRA.
“Our expectation is a muted response from property investors,” he noted on Twitter.
Dwelling price forecasts for Brisbane vary greatly among analysts and lenders.
In October 2017, Propertyology predicted growth of 3 per cent to 6 per cent for the Brisbane property market in 2018, while ANZ tipped growth to fall 0.1 per cent.
Source: qldpropertyinvestor.com.au