Big improvement tipped for Brisbane in 2012

By Michael Matusik, 7th December 2011

The latest RPData-Rismark Hedonic Index shows that Australian dwelling prices have fallen about 4% (down $21,500) from the market peak. Apartments have faired better, down 2% or about $8,000 since late last year. Detached homes have dropped about 5% in value.

Due largely to the January floods, Brisbane has done it toughest, with a 10% slide in value since last year. Canberra and Sydney have faired much better.

Falling end prices, coupled with lower interest rates and rising household incomes, have now made housing across Australia – and especially in Queensland, Western Australia and Tasmania – much more affordable. It now takes only 30% of household income to buy the median priced dwelling in Brisbane. By comparison Sydney and Melbourne remain relatively unaffordable.

It is getting to the stage where people in Queensland will start buying again. Not only is housing becoming more affordable in relation to income, but buying is becoming more attractive compared to paying rent.

The vacancy rate across much of the state is tightening and rents are rising. New rental listings are down 5% across the state (on this time last year) and have fallen 11% in Brisbane. This is against a slight rise in new rental stock becoming available across the rest of the country.

In support, the number of residential properties being advertised for sale is also on the decline, not only nationally but in Queensland too. New sales listings are down a whopping 20% across Queensland and a massive 29% in Brisbane. Whilst there is still a lot of property for sale, this trend is accelerating and should help stabilise prices in over the next six to 12 months.

Also, confidence towards property is improving. This will continue if interest rates fall further. Auction clearance rates improve – in time – on the back of higher confidence and fewer dwellings for sale. End values don’t increase unless auction clearance rates are consistently over 50%. We expect a return to this magic number during the first half of next year.

We also believe that Brisbane is at the bottom of the cycle and, barring a catastrophe, the Queensland market will show remarkable improvement in 2012. The same applies to many other Queensland locations.

ENDS

Related Report

Top 10 Queensland Hotspots

Queensland remains the property market of choice for many investors Australia-wide, particularly those with a long term view. Queensland traditionally is driven by the pistons of a strong state ...

Read more...