New research from the Real Estate Institute of Australia (REIA) and CoreLogic show that house prices across Australia have been falling, with three distinct exceptions; Brisbane, Adelaide and Canberra.
Many will have seen the recent ABC series which ran highlighting the big falls in property prices in Sydney and Melbourne. They have done a really good job, albeit with a little hyperbole, which is no more than what we can expect from the press these days. After all war, famine and economic disaster engages readers, listeners, watchers doesn’t it!
At PropertyMash we focus on Queensland property, and I think we need to all take a step back and analyse this information from a Queensland perspective. The Queensland property market quite simply has not experienced the huge boom that Sydney and Melbourne experienced over the past five or more years. It simply has not had the huge run up in prices, which inevitably has meant that it is not experiencing the huge run down now.
We can see this in the CoreLogic data. The Brisbane market continues to be stable, even with the outstanding level of negative press about property. This should be telling us all something. The fundamentals that tell us that property in Brisbane is well priced and due for an uplift are correct. It is even withstanding the current negativity storm, which is surprising.
What does the future hold? That is a particularly difficult question. Economic analysis is always fraught with danger but right now we have a confluence of risks that really do make analysing the short term market tough.
One the positive side, median rents for three-bedroom houses are holding steady and even marginally increasing in some markets, demonstrating that consumer rental demand remains strong. This will put a natural floor to the property market as returns will improve markedly as house prices falls, eventually bringing investors back into the market.
Let me quote John McGrath, one of Australia’s most famous real estate agents and commentators from the 2019 McGrath Report:
“WILL BRISBANE AND SOUTH EAST QUEENSLAND FINALLY GET THEIR TIME IN THE SUN? THE SUNSHINE STATE IS ONCE AGAIN AUSTRALIA’S FAVOURITE DESTINATION FOR INTERNAL MIGRATION AND MOST IMPORTANTLY, THE ECONOMY IS TURNING A CORNER. PROSPECTS FOR INVESTMENT UP NORTH ARE AS GOOD AS I’VE SEEN.”John McGrath