Signs Brisbane market is cooling despite another uptick in values
Brisbane is approaching Australia’s most expensive place to buy a home but industry figures say the market has cooled following the federal government’s property tax overhaul designed to boost affordability.
Prices in Queensland’s capital continued to rise despite declines in Sydney and Melbourne, according to the latest report from property research company Cotality; Brisbane’s median home value rose 0.9 per cent in May to around $1.13 million.
Prices in Sydney, the most expensive market in the country, during the same period fell 0.9 percent It rose to over $1.28 million. It is currently just under 14 per cent more expensive than Brisbane.
The average Melbourne price fell 0.8 per cent to over $810,000.
Brisbane buying agent Scott McGeever said a cooling in the market was evident as sellers were trying harder than ever to attract potential buyers.
“I don’t think I’ve received emails or messages from this many reps in the last few weeks. It’s amazing,” he said in this imprint.
“The number of buyers in open houses decreased, and the number of listings on the market increased.
“I think everyone is a little cautious right now.”
Growth still slowed in the River City, but figures showed continued high demand despite a perfect storm of rate increases, low consumer sentiment and uncertainty following major tax reforms.
In Brisbane, unit prices rose more than house prices, rising 1.3 per cent compared to 0.8 per cent in May. The average unit price was more than $880,000.
Beaudesert (24.7 per cent) and Loganlea (24.1 per cent) recorded the highest growth over the 12-month period.
Cotality head of research Gerard Burg said a lack of supply was behind market resilience in Brisbane.
“It has happened [a] “The market has been in better shape than most… but we are also seeing this loss of momentum in Brisbane,” he said.
“I think it comes down to supply.”
He said these shortages could temporarily push the average price in Brisbane closer to those in Sydney, but were unlikely to remain above the southern city in the long term.
“Sydney could probably maintain a higher average value… just from a higher average income perspective.
“I don’t think you can have a sustainably higher cost in Brisbane unless there’s that kind of change.”
In Brisbane, rents increased by 6.7 percent for residential properties and 6.2 percent for residential properties in the last 12 months.
If the cost of renting a home continues to rise at this rate, the number of people living in shared homes or moving in with other family members in the city could increase, McGeever said.
“We look at this and wonder how much more problems tenants can deal with overall,” he said.
“Rent affordability is already very high, and for many people that may mean starting to make some decisions about household composition.”
Despite the perceived cooling in the market, PRD chief economist Asti Mardiasmo said she wouldn’t be surprised if Brisbane continued its “really fast” approach to eclipsing Sydney prices.
“Unless something big happens in Brisbane… the chances are very good [it] “It will be one of the most expensive capital cities in Australia,” he said.
Mardiasmo said Brisbane rents could rise due to recent negative reforms, which could reduce the number of landlords in the city.
“There is still a rental crisis in Queensland,” he said.
“I think there’s a bit more of a danger in Brisbane because our housing supply is really low when it comes to rentals.”
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