Brisbane home price growth outshines competing capital cities
Strong migration into Queensland has helped house and apartment prices in Brisbane stay in positive territory despite a slide in the other major capital cities of Sydney, Melbourne and Perth.
Brisbane apartment prices gained 0.3 per cent in the month of September, up 1.3 per cent for the quarter.
But according to Corelogic apartment prices in Brisbane are still 10 per cent below where they were 10 years ago, creating “bargains”.
“Apartment price growth has been negative for several years and have only just come back,” Corelogic’s Tim Lawless said.
“There are some good buying opportunities. Oversupply was a concern and I would still use caution some places.”
While growth in Brisbane residential property has slowed, it is still the only major capital city showing growth.
Migration driving prices
“Migration is definitely one of the key factors, ” Mr Lawless said.
Queensland is now the number one state when it comes to interstate migration and increased 36 per cent over the year ending March 2018 according to an analysis of ABS data by Urbane Homes director Jon Rivera.
He said the same figure for the period between 2014 and 2017 was 302 per cent.
“Affordability and employment opportunities are the key drivers for the migration – but this growth is not being 100 per cent reflected in sales now and more in rentals – hence the absorption of inner Brisbane apartments.
“They will move here, get established and settled. Then make the move to buy once you know where you want to live.
“This means that the south-east market, where 70 per cent of the state’s population live, will have a delayed interstate purchaser in the coming year. The perfect storm for growth.”
Over the past four quarters ending March 2018, Mr Rivera’s analysis shows that a total of 24,004 new residents came to Queensland, compared to 15,099 in Victoria and -25,506 in NSW. There has also been an exodus in Perth where home prices have dropped 2.9 per cent in the year to date.
He also scuttled concerns that have been raised about an oversupply of apartments in the city. Property research outfit RiskWise said in July that Brisbane’s inner-city apartment market had about 10,000 more homes in the pipeline than it should.
“I never was too hung up on all this oversupply rubbish that was in the media over the past year. I think many analysts got it wrong but I do think Brisbane has a lot of bad apartment stock and very little great stock. It is the great stock that will perform best over the long term.”
Despite Queensland and Brisbane’s relative strength fuelled by a bounce back in jobs growth in the coal and mining sector, the availability of credit will still be the major constraint to maintaining price growth.
“Credit availability is what impacts every market,” Corelogic’s Mr Lawless said.
“One year ago, the annual gain in Brisbane was tracking at 2.9 per cent and has since slowed to just 0.8 per cent over the past 12 months.”