Brisbane’s property market has been forecast to outperform Sydney and Melbourne this year, enticing interstate migration with its lower-priced entry points amid Sydney and Melbourne’s period of property price adjustment.
The Queensland capital bucked the falling dwelling trends of 2018, with house values increasing a modest 0.4 per cent.
While Corelogic data shows Brisbane unit prices dropped 0.7 per cent.
Forecasts remain varied as to the extent of how the nation’s two largest capital cities will affect Brisbane’s property market.
Speaking at The Urban Developer’s Brisbane Market outlook event last week, Domain Research analyst Eliza Owens says Brisbane is the top capital city across the country in terms of views per listing.
So, armed with Domain’s dwelling data, and having enlisted the aid of Zoran Solano, Managing Director at Hot Property Buyers Agency, compiled is a list of Brisbane’s top affordable suburb options located 10, 20 and 30 kilometres from the CBD.
Under 10 kilometres: Brisbane
Solano says the suburbs listed for units, such as Milton, Moorooka, Clayfield, Everton Park and Fortitude valley have all seen a large amount of new development activity in the past five years, and like units in much of Brisbane, have seen price softening.
“Now is a great time to pick up a bargain in this market but be warned as the recovery of this market might take some time,” he says.
“Units are still a secondary choice for buyers given our relative affordability within the house market.”
Domain’s suburb list for houses proves a bit more promising, Solano describes, as “all are prime areas for growth” located on Brisbane’s north-side.
“I am actively purchasing property in these suburbs as I feel the value proposition is still very strong when you compare us to the Sydney and Melbourne Markets,” he said.
“And these suburbs also have relatively high pricing ceilings which allows people to renovate and add value with low risk of over-capitalising in years to come.”
10 -20 kilometres: Brisbane
When it comes to low-to-median density living Solano has a rule for Brisbane’s market.
“I personally think it’s an inner city product (for Brisbane’s inner ring) so I don’t suggest clients purchase units or townhouses in these areas,” he said.
The affordability for houses in these suburbs means stretching the budget a little further can secure a house instead of an attached dwelling.
“You can have freehold land which is my suggestion every day of the week,” Solano said.
“When it comes to houses, this radius is where I see value for homebuyers wanting to get a foot hold into the market or investors with entry-level budgets,” Solano says.
“The rental yields are often slightly stronger than their inner city cousins and there is a mix of young and old properties to match a lot of buyers needs.
“My pick of these suburbs is Acacia ridge, which is just 13-kilometres from Brisbane’s CBD and offers great buying.”
20 -30 kilometres: Brisbane
When the report refers to units in this category we are really talking about Townhouses, explains Solano.
“Often in complexes of 30 – 60 or even more, these complexes are highly sold to investors and there is a lot of competition for investors to secure tenants,” he said.
“I Personally would not suggest clients invest in these markets as there is still a lot of development land in the area that can continue to supply the market with more and more dwellings.”
Solano says this radius from Brisbane’s CBD often falls into other council areas such as Logan and Ipswich.
“These are affordable suburbs but in my opinion not investment grade,” he said.
Often these areas have suffered from prolonged periods of negative or flat line growth which Solano says is a concern for investors, especially during an uncertain time in the market.
“Redbank plains in an area I have seen a lot of investors lose money, so I would be cautious of that market.
“If you are looking for a low budget property in this radius I would stick to ones with Quality public transport infrastructure ideally a train line,” he said.
One capital city holds steady as others record price falls
Nearly every major capital city showed price falls, according to the latest weekly property market data, with the exception of one which held steady.
Combined, the daily home value index fell by 0.2 of a percentage point in the week ending 19 May, CoreLogic’s Property Market Indicator data showed.
Brisbane was the only capital city not to record a value fall, holding steady.
Meanwhile, Sydney, Melbourne, Adelaide andall recorded declines, with Sydney falling the most at 0.3 of a percentage point, Melbourne declining by 0.2 of a percentage point, and then both Adelaide and Perth falling only by 0.1 of a percentage point.
The monthly index was down by 0.8 of a percentage point. It fell by 9 per cent for the year. Sydney, Melbourne and Perth recorded the highest declines for the year at 11.2 per cent, 10.2 per cent and 8.4 per cent, respectively.
New listing volumes were down, albeit to a lesser degree than the week prior, with nearly every single capital city recording a decline, except for Darwin, which held steady, resulting in a combined capital city loss of 22.4 per cent.
The largest declines were seen in Sydney at 28.7 per cent (making last week 13 weeks of new listing declines in a row), Melbourne at 26.4 per cent, Perth at 19.1 per cent, Brisbane at 18.5 per cent, Hobart at 12.3 per cent, Canberra at 18.1 per cent and Adelaide with the smallest decline again at 2.6 per cent.
Houses were again more popular than units, and the average time for houses on market rose in nearly every capital city, except for Brisbane, where it held steady, and Hobart, where figures declined.
Hobart was the capital city with the fastest time on market for houses at 38 days, followed by Melbourne and Canberra at 45 and 50 days, respectively; while Darwin, Perth and Brisbane had the slowest time on market at 90 days, 77 days and 71 days, respectively.
For units, Hobart was again the fastest at 34 days, while Darwin, Perth and Brisbane were again the slowest at 105, 82 and 71 days, respectively.
Vendor discounting was between 5.5 per cent and 8.2 per cent for houses across most capital cities and between 7 per cent and 10.3 per cent for units.
Canberra was the low-end exception for both houses and units at a respective 4 per cent and 5.3 per cent.
Darwin was again the high-end exception for houses and units at 9 per cent and 13.7 per cent, respectively.
The southeast Queensland suburbs where vendors are discounting their sale prices
The southeast Queensland suburbs where vendors are discounting their sale price by the largest percentages have been revealed.
New data analysis by Domain looked at the average rate of vendor discounting on properties in suburbs throughout Brisbane, the Gold Coast and the Sunshine Coast over the six months to March this year and found some areas were discounting by as much as 12 per cent.
Houses at Carindale, Clontarf, Redcliffe and Rochedale South topped out the list of Greater Brisbane suburbs with the highest percentage of vendors discounting their asking price, while Chermside, New Farm, Redcliffe and South Brisbane had the highest rate of discounting for units.
On the Gold Coast, houses at Broadbeach Waters and Hope Island both recorded double-digit average vendor discounting, while units at Main Beach and Southport had the highest rate of discounting.
Maroochydore and Tewantin headed up the Sunshine Coast houses that were being the discounted by the highest percentage.
Domain economist Trent Wiltshire said the rate of discounting was another market indicator that could help assess conditions in certain suburbs.
The data was compiled using a minimum of 30 observations and did not include properties that sold via auction or without a listed price.
“This can be a bit more timely than price data,” he said. “But it is only an average figure and, while the average or median is the simplest way to look at a suburb, it doesn’t tell the full story.”
Will Torres of Torres Property said overall the housing market in Carindale was performing well but that the average discounting rate was likely brought down by a specific price point.
Carindale’s median house price is $879,750, a rise of 1.1 per cent over the year to March.
“I’d say the market that is being affected at the moment is that mid-$1 million price range,” he said.
“Rewind to six months ago I was selling houses in this price range in three weeks — now I’m struggling to get numbers in the door. That’s where the discounting will be, around that $1.5 million range and that’s why the Carindale percentage is that high.
“Anything under that price point is still performing really well and selling well. Days on market have stretched but the buyers and the demand is overall still there.”
Broadbeach Waters recorded the highest rate of vendor discounting, by up to 12 per cent. Jordan Williams of JW Prestige said that figure had likely been increased by houses in the $2 million to $3 million range, which were sometimes overpriced.
“If you’re 10 per cent over the odds you won’t get a result, you won’t get a deal — that’s why you’re seeing that average discount for Broadbeach Waters,” he said.
“So this figure doesn’t mean the market has dropped here, it means some properties were overpriced. I sold a house for $4.5 million where the owners originally were asking $4.7 million. That’s a massive discount.
“But it started out that high because the owners said they wanted to give it a go, test the waters. There’s a million different scenarios for why people discount their properties.”
At Hope Island, where the average vendor discount is 10.3 per cent, agent Warren Hickey is selling a four-bedroom, two-bathroom contemporary home on Virginia Avenue, which is listed for offers over $995,000 and advertised as a huge price reduction.
However, he said the listing was not representative of the local market.
“On average we’d sell a property a week in Hope Island. I would say if you look back at everything we’ve sold in the past few years, we’ve probably only advertised one as having a price reduction and this is it. It’s the exception,” he said.
On the Sunshine Coast, where Maroochydore recorded an average discount on houses of 7.5 per cent, local Century 21 agent Damien Said said a lot of the properties in higher demand were now auctioned.
“That needs to be noted — those properties are automatically excluded from the data,” he said.
“If anyone in Maroochydore is discounting, I’d say it’s more of a reflection of a few properties that came on the market with unrealistic expectations.
“Generally, we’re finding that when properties do come on the market, as long as the price is realistic, our days on market are reducing. The coast market is still quite active.”
Australia’s new capital for residential market growth
Brisbane has just earned the title of Australia’s top capital for price growth in the luxury residential market for the first time.
The city surpasses Sydney and Melbourne and some of the world’s wealthiest cities to take out the top spot.
The value of Brisbane’s prestige market jumped 3.2 per cent over the past 12 months, earning the city the 14th spot in global rankings according to the latest Knight Frank Prime Global Index report.
The report tracks the performance of luxury residential prices across key global cities using data compiled by a global research network.
Brisbane leapt past Sydney which currently sits in the 18th spot and has only grown by 2.4 per cent. While Melbourne, grew by 1.8 per cent and sits in the 22nd position.
“Brisbane prime properties have been popular with families migrating from Sydney and Melbourne, as well as local downsizers look for properties with low or no maintenance and a high standard of amenities to enjoy,” Knight Frank’s Australian head of residential research Michelle Ciesielski said.
“Given the relative value to other east coast cities, we expect the Brisbane prime market to record a similar annual growth by the year’s end.”
Other cities that scored higher than Brisbane were Tokyo, Paris, Delhi, and Singapore.
Moscow and Berlin were the two cities to rank the highest for residential growth.
The report reflects a growing trend for banks to lend faster and buyers from interstate viewing homes in Brisbane.
The result points to an increased confidence and optimism with regard to buying property in Brisbane.
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