Brisbane Remains Robust in Australia’s Declining National Market
Although house prices in the national property market are declining, Brisbane has remained impervious and even prosperous. New data suggests that the average house price in this cultured city has seen a small increase even though other iconic cities in Australia, like Sydney and Melbourne, continue to decline. In the figure to your right, you can see that the quarterly change in dwelling values has decreased by 1.7% while Brisbane stays level.
A Property Outlook report published in mid 2018 reflects the major slowdown in the nations two biggest cities but rightly points out that the market is highly divergent as the demand for Brisbane apartments is “up 4.5% over the past 12 months-far higher than any other capital city.” It also shows that the median price for a home is up 1% quarter-on-quarter and 2.7% for year-on-year.
These increasing and even flat numbers are in direct opposition to the national housing prices, which in 2018 saw the sharpest annual reduction in 15 years and are reminiscent of the levels seen in 2016 as reported on Domain House Price Report. Nicola Powell, a Domain senior research analyst, mentions that even though house price growth is at a stand-still in Brisbane, the fact that prices have remained steady was a positive outcome for the city in context of what was happening nationally.
Powell is quoted as saying “It is a better outcome than many other Australian capital cities have experienced, with Brisbane proving the fourth-best performer, behind Hobart, Adelaide, and Canberra.” She also mentioned that Brisbane’s house prices would be even higher if it weren’t for the strict lending conditions. “Greater Brisbane house price growth evaporated by the end of 2018, with prices ultimately flatlining over the quarter and year. This provides further evidence that credit access is not only impacting Sydney and Melbourne, it is now having a marked effect on housing markets that would otherwise be growing.”
Powell gave some insight as to the reason behind Brisbane’s housing demand, citing that greater job prospects and improved economic outlook, draw migrants to Queensland, which is currently experiencing a 12-year high.
Powell isn’t the only one taking note here, other analysts in the field have noted that Brisbane is not subject to the highs and lows in the housing market like other cities. Shane Hicks of Place Bulimba however, points out that the housing prices would not have slowed down near the end of 2018 had it not been for stricter lending conditions and Ray White New Farm principal Haesley Cush said he was not surprised stating “We did feel a heavy drag on the market in November and December, on the front line and at auctions and opens, and we think it was the downward pressure of the other states. But Brisbane’s market is not Sydney’s market and in our office in January, every agent is commenting on the huge uplift of inquiry and the number of people at open houses, compared with the end of last year.”
Nerida Conisbee, a chief economist at realestate.com.au, mentions that the small increases Brisbane is experiencing, suggests that the tough times are over in the city, which is consistent with recent jobs growth numbers. She is also of the opinion that the city is now well prepared for population and housing growth, due to the increased spending on infrastructure. Conisbee reports that the most successful suburbs right now are in East Brisbane and Indooroopilly, as they see the highest demand for houses; and for apartments, the Gold Coast is leading.