Property valuation experts Herron Todd White (HTW) have released their latest monthly report, showing the famous ‘property clock’ which is supposed to forecast the stage in the property cycle each market is in. As you can see in the diagram below, HTW is setting the Brisbane’s apartment market at the ‘starting to decline’ stage.
The graph below shows where the apartment markets are in the property cycle. As we can see, HTW believe Brisbane has just passed the peak of the market, and is beginning to decline.
Propertymash.com is of the opinion that the Brisbane market is most probably already well into the Declining Market stage. We have seen sales rates drop by 75% over the past 6 months with little sign of recovery at this stage. With slowing sales prices have softened and rental returns have dropped. There has not been a horrendous drop in the market that many forecasters have predicted, and the market is going through a transition phase. The question we all need to ask ourselves is how long will this transition take. Some markets are quite buoyant. New house and land sales and townhouse sales in good locations continue to sell well, so the softness in the market is limited to the apartment market, and has been caused by the over supply building up over the past 2 to 3 years. Once this over supply has dissipated, we would not have reason to think that the apartment market would not perform in line with the house and land and townhouse markets.
Herron Todd White – Month in Review, December 2016