BRISBANE is the only capital city to report positive property price growth in the June quarter, with the upswing also extending to parts of regional Queensland.
The Australian Property Market Report July 2019 by realestate.com.au has revealed that Brisbane is “leading Australia’s recovery”, having weathered the downturn “very well” with prices only falling by 1 per cent over the past 12 months and recording 0.1 per cent growth in the June quarter.
Even Hobart, which has arguably been the nation’s top performing capital during the national downturn, recorded a 0.7 per cent drop in dwelling values over same quarter.
“(Brisbane) is the first capital city (of the eastern capitals) to see positive growth in June,” the report said. “The upswing is also extending to regional areas, with Mackay seeing the strongest price growth of any region in Australia over the past 12 months, and many smaller mining towns are roaring ahead.”
By comparison, values continued to fall over the same quarter in Sydney and Melbourne, with dwelling prices falling by 0.4 per cent in both cities.
To date, median prices have fallen by 7.2 per cent in Sydney and 5.8 per cent in Melbourne, the report said.
Renewed confidence in the mining sector, infrastructure spending and continue migration from NSW to Queensland were identified as the most likely reasons behind the upswing in the sunshine state.
“Searches (on realestate.com.au) in southeast Queensland out of Sydney suggest that population growth continues to come from an exodus from NSW,” the report said.
“While there is a clear affordability edge in southeast Queensland compared to Sydney, it is jobs that are making the move possible.”
Looking at houses and units, the biggest improvement has been in the apartment market, which has seen a 0.7 per cent jump quarter-on-quarter to $387,000.
House prices fell slightly over the same period, down 0.1 per cent to $530,000.
“The other more unique factor about Brisbane is that we are seeing some big jumps in offshore property seekers,” the report said.
“Chinese buyers are gone but property seekers from India have more than doubled over the past 12 months, perhaps suggesting that Indian born buyers may begin to have as big an influence on house and land sales as they have had in Melbourne and Sydney.”
So where are buyers focusing their search? Toowong, Windsor and Paddington were the most in demand suburbs for houses in Queensland during the quarter, with all of the top 10 suburbs located in Brisbane.
For apartments, the geographic spread is wider, but still focused on the southeast corner. Of the top 10 suburbs, six were on the Gold Coast, two on the Sunshine Coast and two in Brisbane.
Across the Brisbane metro area, four of the five regions had an upswing in values over the quarter, with only Brisbane North recording a slight downturn on 0.1 per cent.
Nationally, REA chief economist Nerida Conisbee said the “ScoMo bounce and two interest rate cuts” had breathed new life in to the Australian property market, and it was likely that the “bottom is very close”.
But she warned that while conditions suggested things were moving in to positive territory, there were still some “dark clouds looming on the horizon”.
“If a lot more people lose their jobs, then things could get very bad and it will be far harder to turn things around,” Ms Conisbee said in the report, noting that investor lending was down significantly, and so were the number of Asian buyers.
“While it’s easy to look at the changes and only see the negatives, there are, as always, some things that are looking particularly positive,” she said.
“Many mining towns are returning to growth after five years of negative conditions.
“Rental growth in these areas started some time ago, but a recovery is now following suit.”
WHAT THE REPORT SAID, CITY BY CITY:
BRISBANE: up 0.1% – “Over supply of apartments in Brisbane had the potential to derail Australia’s financial stability, however, not only did Brisbane weather the downturn very well, it is the first capital city to see positive growth in June.”
CANBERRA: down 0.3% – “We have come out of this downward cycle with prices in Canberra pretty much where they were at the beginning.”
SYDNEY: down 0.4% – “Sydney prices fell again slightly in June after flat conditions in April and May. If this downturn has now ended, the price fall from peak to trough ended up being 11%, far less than what most commentators predicted.”
MELBOURNE: down 0.4% – “Melbourne prices may have flat lined in June, but it is still too early to tell whether this means the worst is behind us. Some markets in Melbourne are however starting to turn around.”
ADELAIDE: down 0.7% – “While Adelaide didn’t see the heady highs that we saw in Melbourne and Sydney during the boom, it kept powering ahead when both those markets started declining.”
HOBART: down 0.7% – “Prices in Hobart grew by 30% – the best performing market in Australia. Hobart’s dream price run seems to have ended”
PERTH: down 0.7% – “It has now been over five years since the Perth market started declining. There is of course always some good news. Recoveries start with premium suburbs lifting and this has been going on for some time in Perth.”
DARWIN: down 1.6% – “Darwin property has lost a quarter of its value over the past five years. While the market remains very challenged, the generous first home buyer scheme has provided a bit of positivity”.
(Percentages based on quarter-on-quarter dwelling median value changes. Source: Australian Property Market Report – July 2019)