By Robert Kirk
Brisbane house prices have fallen for the third time this year, dashing hopes that 2017 would be a stellar year for property.
Experts say until there’s improvements in wages and consumer confidence, Brisbane will likely stay in a holding pattern of minimal growth.
Greater Brisbane’s lacklustre performance, as revealed in the latest Domain Group State of the Market Report, shows median house prices have fallen by 0.2 per cent across the five LGAs, which include Brisbane, Ipswich, Redland, Moreton Bay and Logan.
Not surprisingly, unit prices have also fallen, having dropped by 3.5 per cent to $376,685.
Moreover, Brisbane LGA house prices also fell – for the first time in 18 months – dropping by 1.5 per cent over the September quarter to a median of $650,000.
It’s a similar story across most of the country, where prices are down nationally by 0.5 per cent. Sydney’s runaway property prices have finally stumbled, with both house and unit prices falling last quarter, marking what experts say is the end of a five-year property boom.
While Brisbane’s median house price is still up by 1.7 per cent for the year, Domain Group economist Andrew Wilson says the results will come as a disappointment to those who hoped the momentum of late-2016 would continue.
“There were expectations Brisbane’s housing market would rise this year after 2016 finished quite well but that hasn’t happened – and any hopes of that happening leading up to the end of the year are quickly diminishing,” Dr Wilson says.
“There’s no doubt this year has been a flat one for Brisbane and it will likely be flat for the whole year I’d say.”
While the outlook for Brisbane appears grim, experts say the local property market is not falling, but “on hold”.
Brisbane house prices are in a ‘holding pattern’, according to experts.
“There’s no urgency in the market,” says Kerrianne Meulman, managing director of Urban Economics.
“People in Brisbane don’t have that pressure to buy because things aren’t accelerating. We’ve still got low interest rates and those underlying stories – like non-existent real wages growth and modest growth in unemployment – mean we’re watching this space rather than rushing out buying houses.
“If house prices keep declining, it won’t be by much or it won’t be for long. I don’t expect that to be a long-term prevailing situation at all.”
Simon Pressley, managing director of Propertyology, says a distinct lack of confidence in Brisbane’s economy is what’s holding property prices back.
“I feel that whether we’re talking houses or units, metro Brisbane or Greater Brisbane, it’s been pretty much the same story for five years – and that’s really small amounts of growth,” Mr Pressley says.
“Demand for property is closely linked to employment and affordability. We’ve got an affordable market. But if we don’t have confidence in our jobs, in our future, in the community around us, the housing market suffers.”
Brisbane’s property market lacks the urgency that other interstate markets have had more recently. Photo: Glenn Hunt
And it’s important to keep some perspective with quarterly results, which are a 90-day snapshot that can be influenced by only a few big ticket sales, or lack thereof, Mr Pressley says.
“While the figures are down, it doesn’t necessarily mean everyone’s house in Brisbane has declined by this much, just that the median value has,” he says.
“Going forward, Brisbane has rock solid fundamentals. We’ve had a difficult five years economically. We’ve weathered that storm and our property prices have held up well, unlike Perth and Darwin, and what we can look forward to is the resources sector showing some green shoots.
“Tourism is getting stronger and stronger and our properties are much more affordable than our southern rivals, so there’s potential there.”
There are a couple of bright spots in Queensland – the best performing region being Gympie, where house prices increased by a whopping 5 per cent this quarter. Redland house prices are up 2.5 per cent and the Sunshine Coast has risen by 2.2 per cent.
The Gold Coast, which has been the jewel in Queensland’s property crown this year, saw prices fall for the first time in two years. The median price fell by 1.7 per cent, although prices are up overall for the past 12 months by a healthy 6.1 per cent.
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