Below are key points for the Brisbane, Queensland and National residential property market for Quarter 2, 2017.
National and Queensland property market update
Housing market sentiment has fallen modestly in Queensland
Confidence levels were lower this quarter but this is expected to rise over the next couple of years. This reflects weaker expectations for both house prices and rents.
Property experts have lowered their price expectations in Queensland, however, Queensland and NSW are expected to lead the country for house price growth in the next 12 months.
Rents are expected to slow and this could cause yields to drop
Queensland is tipped to be the best state for capital growth in 2 years’ time.
Modest price growth is expected across Australia in 2018
A NAB survey found that local investors had retreated from the residential market this quarter. They believe that this retreat is due to the tougher regulations around investor lending.
First home buyers accounted for 35.7% of all new property sales in Q2 2017. This is an increase from the previous quarter (where it was 30.8%) and the largest share since NAB began tracking the first home buyer sector.
Foreign investors were less prominent in Queensland in Q2. Their total market share of property sales over the quarter was 8.6%. This represents a 3 year low.
Concerns over housing affordability have eased somewhat over Q2, but do remain a concern for new property buyers.
Queensland property experts have put “tight credit” as the most significant constraint for new property development.
First home buyers accounted for 28.1% of established property sales in Q2 2017. This was up slightly from 26.5% in Q1.
Owner occupiers were the dominant buyers in the established property market accounting for 42.4% of property sales in Q2 (up from 39.6% in Q1).
Local investors and foreign investors were both less active in the market this Q2.
In Queensland, “employment security” and ” access to credit” were the biggest impediments for buyers of established property.
Trends in Foreign Purchases of Queensland Residential Property
59% bought apartments (this accounted for 13% of Queensland apartment sales)
31% bought houses (this accounted for 8% of Queensland house sales)
10% bought dwelling/land for re-development
Foreign investors typically spent between $500,000 – $1m for porperty in Queensland
Queensland suburbs tipped to enjoy above average growth in the next 12 months
Brisbane residential property insights
Brisbane houses have had modest price growth over Q2 of 2.5%
Brisbane apartments have had decreased price growth by -3.2% over Q2
Property experts expect subdued wages growth to remain, suggesting that affordability will remain a major constraint on the market – especially if credit conditions continue to tighten.
This in combination with record levels of housing construction activity (mainly apartments) and moves to limit foreign demand for housing, will likely limit the potential for future price gains.
That said, the 2016 Census revealed that population growth was even stronger than previously expected, and solid growth is expected to continue, especially in Victoria, helping to drive underlying demand and soak-up some of the feared housing stock overhang.
Foreign demand is much more difficult to ascertain. Policy makers both domestic and overseas have sought to stem the tide of foreign capital entering the Australian property market, but the NAB Survey indicated that foreign demand unexpectedly increased in Q2.
If you are looking to buy, sell or lease your Brisbane residential property please get in contact. We’d love to help.
The information above is a summary of NAB’s Q2 2017 Residential Property Survey. They had 260 property professionals participate in the Q2 2017 survey. The participants consist of Real Estate Agents/Managers, Property Developers, Asset/Fund Managers and Owners/Investors. You can read the survey in full here.