August 2018 Brisbane Property Market Update

This article was written with reference to the August 2018 Brisbane Property Market Update Report from CoreLogic.

Brisbane property market update

Here are some key statistics for the Brisbane property market performance up to 31 July 2018:

• The Brisbane property market has become one of the best performing capital city markets. However, it’s not because our growth rates have accelerated… It’s because other cities have slowed down at a faster rate!
• From start January 2018 to end July 2018, Brisbane dwelling values have risen by 0.4%. This may be a  mild result but it’s the second highest growth rate after Hobart. Hobart saw dwelling values up 5.8% over the same time frame.
• The local unit market has been the main driver of year to date growth with Brisbane unit values up 1.1% over the first 7 months of the year. In comparison, house values are up a modest 0.3%.
• Unit values in the Brisbane property market update are showing early signs of recovery. These include –
  • Construction peaked almost 2 years ago, so supply is winding down while population growth is ramping up.
  • However, unit prices need to rise by almost 11% before returning to the previous nominal high (which was more than a decade ago).

Source: CoreLogic

Market update for the Australian property market

• Since peaking in September 2017, the Australian housing market has recorded a cumulative 1.9% fall in values
• However, values remain 31% higher than they were 5 years ago
• The May – July 2018 quarter saw –
  • a 0.9% decline in national dwelling values (the lowest for a quarterly change since January 2012)
  • a 0.2% decline in combined capitals dwelling values
  • a 1.1% decline in combined regional dwelling values
  • 5 of the 8 capital cities saw dwelling values slip lower
  • Hobart as the star performer with growth of 1.7%
  • Melbourne record the biggest fall in dwelling values of -1.8%
  • Sydney and Perth weren’t far behind with falls of -1.1% and -1.5% respectively
  • Sydney and Perth weren’t far behind with -1.1% and -1.5%
• This weakness is being attributed to –
  • Long running declines in Perth and Darwin dwelling values;
  • The acceleration in the rate of decline across Sydney and Melbourne dwelling values; and
  • Tighter credit conditions

Source: CoreLogic

Key Brisbane property market update statistics:

Capital growth for Brisbane property –

• 3 months to 31 July 2018 = +0.5%
• 12 months to 31 July 2018 = +1.2%
• A year ago the annual rate of growth was +2.9%. It is now only +1.2% over the 12 months to July ‘18.
• Median dwelling price $494,634

Source: CoreLogic

Key property market statistics for other Australian capital cities:

Capital growth for Sydney property –

• 3 months to 31 July 2018 = -1.1%
• 12 months to 31 July 2018 = -5.4%
• Median dwelling price $863,769

Capital growth for Melbourne property –

• 3 months to 31 July 2018 = -1.8%
• 12 months to 31 July 2018 =-0.5%
• Median dwelling price $709,568

Capital growth for Perth property –

• 3 months to 31 July 2018 = -1.5%
• 12 months to 31 July 2018 = -2.3%
• Median dwelling price $457,274

Capital growth for Adelaide –

• 3 months to 31 July 2018 = +0.7%
• 12 months to 31 July 2018 = +0.7%
• A year ago the annual rate of growth was +5.4%. It is now only +0.7% over the 12 months to July ‘18
• Median dwelling price $438,163

Capital growth for Hobart property –

• 3 months to 31 July 2018 = +1.1%
• 12 months to 31 July 2018 = +11.5% (since January 2017, Hobart’s annual growth was holding at double digits, but it’s now starting to slow)
• Median dwelling price $435,833

Capital growth for Combined Capitals –

• 3 months to 31 July 2018 = -1.1%
• 12 months to 31 July 2018 = -2.4%
• Median dwelling price $650,165

National sales statistics:

• The number of dwelling sales fell by almost 10% over the 12 months to 31 July 2018. Every capital city (except Adelaide) saw a reduction in the number of settled sales.
• As the market has slowed, inventory levels have risen (advertised stock levels are almost 8% higher than a year ago). This has resulted in higher vendor discounting rates and longer selling times (days on the market).

Sum up for our Brisbane property market update

• Can’t see any factors that may halt or reverse the housing market trajectory of subtle decline for the rest of 2018
• Availability of housing credit has been a significant factor contributing to this slowdown. Other factors include –
  • Owner-occupier lending has continued to grow at a relatively strong pace BUT investment lending is tracking at a record low of 1.6% annually
  • Sydney and Melbourne are still showing the highest concentration of investment lending
  • Limits to interest-only lending are still in place and providing disincentives to housing market investment
  • The dim prospects for short-medium term capital gains are also likely to be dampening the demand for investment properties
  • The number of dwellings under construction are at record highs in Victoria and South Australia, and only marginally under the record high in NSW (unfortunately, “investment grade” projects are numerous). This continues to put downward pressure on prices as demand thins.
  • Migration trends have also changed –
    • NSW is seeing more residents moving interstate
    • Interstate migration to Victoria appears to have peaked
    • These imply a reduced demand for housing in these states
    • Conversely, QLD is the major beneficiary of these cross border movements, particularly SEQ. This should increase demand for housing in QLD.
  • Despite the above, low mortgage rates will continue to provide a support buffer which should help to maintain housing demand.
  • Owner occupier mortgage rates are at the lowest level since the 1960’s. This is likely to result in owner occupiers consuming a greater share of market activity relative to investors going forward.

Source: CoreLogic

If you’re ready to invest in Brisbane property, Blocksidge Real Estate Agency has commercial and residential property available. You can Brisbane city and surrounds residential property for sale and Brisbane commercial real estate for sale. We also have Brisbane property rentals available.

Alternatively, if you’re looking to sell your property, give one of our Brisbane real estate agents a call today on 07 3233 3999.

Sources:

CoreLogic

ABS