Traditionally, the second half of the year – the Spring and Summer selling seasons – are always stronger than earlier months. While the tally of 2018 sales across the inner suburbs of Brisbane to date reveals relatively low turnover, there’s no doubt it will pick up in the months ahead.
There have been some extraordinary circumstances affecting the market this year.
Firstly, we’ve had a mini credit crunch in the wake of disturbing revelations by the banking royal commission. The banks, now so eager to be seen to be ultra-responsible, are scrutinising loan application documentation like never before.
Many buyers at the top end of the housing market are self-employed. Banks are demanding onerous, up-to-the-minute tax records and other detailed paperwork not previously required.
The other issue for Brisbane has been Australia’s multi-speed market. Data recently released by CoreLogic, showing how residential real estate prices have changed during the past decade across Australia, highlighted dramatic variances.
Sydney and Melbourne recorded very strong growth over the decade to June 2018. In fact, with few exceptions, statistical districts in and around the two southern capitals occupied the top 28 positions on the national table, with total growth as high as 113%.
The resource-led economies of Brisbane and Perth fell way behind in the appreciation stakes. Brisbane didn’t make an appearance until way down the table. Our inner city district grew less than 25% in 10 years.
My point is, while house prices have recently fallen in Sydney and Melbourne for the first time in a decade, this is not a trend I think we’ll see in Brisbane.
Remember, the southern cities are dropping from inflated highs, so their price pressure will be slowly released in the short to medium term. Brisbane, as a resource-related economy, hasn’t experienced a price bubble.
However now, given the turnaround in coal prices, surging LNG prices and high beef prices, the subdued top end of our housing market is set to show some significant growth.
Brisbane’s economy is about be turbocharged as Queensland’s largest building projects get underway, including Queen’s Wharf and Cross River Rail.
These massive construction works will be a real catalyst, also accelerating our other major industry, tourism. So we see a bright future, after a subdued decade, for the top end of Brisbane’s housing market.
With the Australian Dollar weakening and likely US interest rate rises sending it lower as capital is withdrawn, the news is good for prestige real estate. Expats always use the low Aussie dollar cycle to snap up prime housing assets in anticipation of their inevitable rise.
Stock levels are low, so the spring selling season will continue to see strong results for quality offerings.