Unit sale prices are still falling in Brisbane.
Photo: Peter Braig
Brisbane’s property market has set a median house price record for the past 12 months, hitting $670,000, but units continue to struggle as median prices fall.
The 3.1 per cent price increase reported in the March quarter showed Brisbane’s “resilience” against market challenges, the Real Estate Institute of Queensland said.
While prices went up, listings were falling 6.4 per cent compared with March 2017, making it a buyer’s market as properties were lasting about 32 days before being snapped up.
REIQ spokeswoman Felicity Moore said it was likely buyers would be placing more pressure on real estate agents to view properties early and put in offers as soon as houses came onto the market.
As median house prices grew, the unit market saw such strong supply it lost 1.8 per cent off the annual median price of $442,000 in Brisbane, and state-wide 3.8 per cent.
The annual median price for a Queensland unit is now $400,000.
Ms Moore said it was likely the surplus units constructed in and around Brisbane would be filled, the only question was when migration and population growth would help fill the gaps.
Overseas migrants saw Brisbane as the place to be, bringing 12,847 residents into the city, followed by the Gold Coast and Moreton Bay.
“Queensland has become the number-one destination for internal migration, taking over from Victoria in the latest ABS census data, and our overseas migration is at its highest level in years, which means demand for accommodation will continue,” Ms Moore said.
Citing the extensive infrastructure and roadworks scheduled for the city, including major retail developments such as the $1.4 billion Dexus redevelopment of Eagle Street Pier, the REIQ’s report said it was hoped such development would strengthen Brisbane’s economy and support the housing market.
But while Brisbane’s housing market showed relatively strong signs of growth, the Gold Coast and Sunshine Coast both tracked more strongly.
The annual median house price on the Gold Coast jumped 6 per cent over the past 12 months for an average of $620,000 – the highest growth in the state.
Gold Coast units increased 1.9 per cent to $428,000 for the year, while the Sunshine Coast unit market rose 2.8 per cent to $405,000.
Overall Queensland’s house and unit sales fell throughout the year, although the REIQ said some regions such as Rockhampton and Townsville were benefiting from increased investment.
Shoring up the real estate market, internal migration figures showed the Gold Coast, Sunshine Coast, and Moreton Bay were most popular as people sought a lifestyle close to the city and the beach.
The questions around unit prices and their overall value on the Brisbane market were backed up by Domain data that showed Brisbane’s median unit price had dropped every quarter since June 2016 to reach a four-year low.
While the housing market stayed relatively steady, Brisbane’s rental market grew steadily with about 3000 new rental properties added to the city’s local government area.
Rents in Brisbane have risen about $10 to $20 in the quarter but remained steady compared with the same time last year, while Ipswich recorded the highest rental vacancy rates of about 3 per cent.
Slowing Housing Market Sees Capital City Values Fall Below Their Peak
With dwelling values now falling across most capital cities, the topic at weekend BBQs across the country might very well be, what’s next for Australia’s property market?
Corelogic’s latest models show, at least for the short-term, that values are likely to continue trending lower, with the rate of decline easing later this year and into 2020.
National housing market downturns have generally been short-lived. Although, the current downturn of 16 months is now the second longest, with the 2010-12 decline running two months longer than the current downturn.
By next month, assuming the falls continue, Corelogic says this will be the largest downturn in the combined capital city index since 1980.
There is an expectation that interest rates may move lower. This week a report from the Reserve Bank cited shifting interest rates as responsible “more than any other factor”, for weakening house prices and construction rates.
“We probably won’t see the entire rates cuts passed through to mortgage rates and the much tighter credit conditions are likely to limit any rebound in the housing market,” Corelogic said.
“Particularly given borrowers are being assessed on their ability to repay a mortgage at a much higher rate, above 7 per cent.”
Since peaking in July 2017, Sydney’s dwelling values have fallen by 13.2 per cent to February 2019.
Corelogic says this is one of the longest periods of decline.
“With little sign that the falls will abate over the coming months, this current downturn may end up being the deepest and longest in modern times.
“This downturn is also very different to other downturns which have generally been driven by an economic contraction or higher interest rates.
“This downturn is more closely linked to a significant tightening of credit conditions at a time in which the economy continues to grow and interest rates are unchanged – despite some moderate increases for owner occupiers and larger rises for investors.”
From Melbourne’s housing market peak in November 2017 through to the end of last month, dwelling values across the city have dropped by 9.6 per cent.
“Interestingly, comparing the downturn in Melbourne to Sydney, 15 months into Melbourne’s downturn values have fallen 9.6 per cent compared to a decline of 8.2 per cent 15 months into Sydney’s downturn.
“The downturn in Melbourne’s housing market is closing in on its largest downturn of 10 per cent between 1989 and 1992 while the downturn (so far) has been much shorter than the 36 month period in 1989-92.”
Brisbane didn’t experience the great upswing in property prices recorded in Sydney and Melbourne in recent years. And as such, after experiencing moderate growth the data shows Brisbane is recording a moderate decline.
Brisbane’s property values peaked in April 2018, dropping 1 per cent to February 2019.
“To date the fall is moderate however, with housing market weakness entrenched values are expected to move slightly lower or, at best hold firm, over the coming months.”
Following the slowdown in the mining sector, Perth’s housing market has experienced an extended downturn since June 2014 when the market last peaked. Perth’s property values have fallen by 17.8 per cent since then.
“The current downturn has run substantially longer than previous downturns and it is also a much deeper value fall than recorded across previous downturns,” CoreLogic said.
“In late 2017/early 2018 it was looking as if the falls were coming to an end, however, the market has weakened further in line with weaker labour market and economic conditions as well as tighter credit conditions.”
Much like Brisbane, Corelogic says Adelaide’s growth has been moderate over recent years however, with values starting to decline over recent months.
Adelaide’s values peaked in December 2018, recording a fall over the past two months of 0.3 per cent at the end of February 2019.
“While there have been previous periods of value falls in Adelaide, they have tended to be more moderate than those recorded across the other capital cities.
“To-date the decline has been short and moderate and it will be interesting to see over the coming months whether values continue to fall.”
SHAFSTON ESTATE, WHICH INCLUDES ONE OF BRISBANE’S OLDEST HOUSES, IS ON THE MARKET
A large parcel of prestige riverfront land, which includes with one of Brisbane city’s oldest houses, is on the market.
Known as The Shafston Estate, the 1-hectare block at 23 Castlebar Street in Kangaroo Point has been the home of the Shafston College educational facility for more than 20 years.
The site features six freestanding campus buildings totalling about 2675 square metres, one of which is the heritage-listed Shafston House that was entered on the Queensland heritage register in 2005 for its historical, cultural, and aesthetic significance.
The estate was previously on the market in 2013, and property records show that the estate was last sold in 1993 for $1.8 million.
Kangaroo Point is one of Brisbane’s most prestigious suburbs. An $18.48 million sale recorded there in early 2017, for a riverfront home on almost 1200 square metres, made it Brisbane’s most expensive house at the time.
The property is in one of the most prestigious suburbs of Brisbane.
Herron Todd White Brisbane director Gavin Hulcombe said prestige inner-city riverfront property had been in strong demand lately due to its scarcity.
“It is unusual to have a parcel of this size, in this proximity to the city, with river frontage. Riverfront sites have been quite constrained throughout Brisbane,” Mr Hulcombe said.
“There has been a lot of interest generated in riverfront property as evidenced by a couple of recent home-site purchases.
“It is a very popular location. It is unusual to have this size block of land through this pocket, irrespective of being on the river.”
A riverfront property in New Farm, directly opposite Shafston Estate, sold in March for $7.75 million, equalling the Brisbane auction price record.
Shafston College has operated from the site for 20 years.
State government records show that Shafston House, designed by well known 19th century architect Robin Dods, was constructed in several stages between 1851 and 1904 and is an example of the Victorian gothic architecture style that was popular at the time.
According to the heritage register, it is likely the third oldest house in the Brisbane metropolitan area, after Newstead House (1846) and Bulimba House (1849-50) and a rare surviving remnant of a riverine estate of a type typical in the early development of Brisbane.
Marketed by Cushman & Wakefield, expressions of interest close at 4pm on Wednesday 10 April.
Council says ‘imposing’ Nudgee property needs heritage protection
A large bungalow home in Nudgee that Brisbane City Council says it at risk of demolition or removal could be placed under a two-year protective order while its history is investigated.
The property on St Vincents Road has a large 3000-square-metre block of land and a building the council believes could be constructed in 1900.
At Tuesday’s council meeting a request for a temporary local planning instrument that would last for two years was put forward for debate.
The council agreed to write to State Development Minister Cameron Dick requesting the TLPI so they could have more time to investigate the heritage of the property.
A report made to council’s establishment and coordination committee noted the property was “currently at risk of either demolition or removal” and any subdivision of the garden “would have a detrimental impact on the cultural significance of the house” and the gardens.
The building had already seen some upgrades made to it, including a part of the building constructed after 1946, but it was believed the original building could have been constructed in 1900.
City planning committee chair Matthew Bourke said the council did not want to see the house disappear.
“Council needs more time to properly research the history of this site and determine its historical significant, as well as heritage value so it can then be put onto our heritage register,” Cr Bourke said.
“Due to the current zoning and size of the lot, there is the possibility this site may become subject to a multiple dwelling development application.”
Cr Bourke said on face value the building didn’t look like a pre-1940s house, but local councillor Adam Allan (Northgate) had raised the potential for it to be of heritage interest after conversations he had had.
“That’s why we’ve taken this opportunity to protect it, to be able to do the detailed investigation, and then assess on that information,” Cr Bourke said.
Cr Allan said the property was well-known to residents as an “imposing old home” and was originally on farmland.
“This property has remained as a beacon of a bygone era,” he said.
“Any moves to move or demolish the property would not be well-received by the growing local community and would result in the loss of an element of the heritage and history of the area.”
Independent councillor Nicole Johnston (Tennyson) questioned why the council was seeking a TLPI on the Nudgee property when many other requests she had made to protect houses in her ward were rejected.
The move from council to protect the building follows several weeks of discussion about the council’s attempt to ban townhouse and apartment developments on blocks larger than 3000 square metres in low density residential zoned suburbs.
The council is waiting for a final response from the state government on both their request for a permanent ban to be written into its planning legislation, and a temporary ban while the permanent ban is considered.
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