Brisbane has won the race to the bottom with Adelaide to become the cheapest mainland city to buy a house, with median price plummeting 6.7 percent in 12 months for the year ended September 2011.
It seems discounting is rife in Brisbane; so just what does it take to sell a house in this market? In other words what is the amount the seller has to discount with ‘time on the market’ and on this score the findings that Brisbane houses need to drop 9% are an indicator of the price collapse.
While the national median home price has now fallen for five successive quarters, making an even worse stretch than during the global financial crisis in 2008, Brisbane has gone from boom to gloom, reversing years of steep growth in its property market to lead the downturn with a 2.7 percent decline in the quarter.
Brisbane achieved the tile of Australia’s cheapest mainland capital with a median house price if $429,339 compared with Adelaide’s 4445,585.
Demand for rentals this year increased due to the January floods leading to a rise in yields. Yields for apartments are 5.2 percent, up 10 percent for the year, while rental yields for houses are 4.9 percent. Many buyers were clearly spooked b the January flood and the scrapping of Queensland’s stamp duty concessions for owner-occupiers. Investors will no doubt be alert to a price recovery thought 2012 as the Queensland economy improves, backed by a return to full production of damaged banana and cane fields in North Queensland and increased activity in major resource projects.
Population growth slowing, but still above average.
Queensland’s population growth rates lower in as international migration and interstate migration eased. However, at 2.4% in the year to December 2010 it remained above the longer term average of 2.3%.
Despite slowing, net international migration remained very strong at 53,265 people. Natural growth also remained very strong at almost 40,000 people, again well above average.
While expectations are for immigration numbers to continue to slow, the population growth may well be buoyed by increasing interstate migrants as the mining sector takes off again. However, this is more likely from 2012, onwards.
The number of first home buyers (FHB) continued to decline, although at faster rate than expected. This group of buyers to remain relatively weak over 2H, 2011 given the changes to stamp duty and that as a contributing impetus earlier this year. However, the rate of decline should slow.
As mentioned the existing owner occupiers were the biggest surprise in terms of decline. Full time jobs in Queensland rose by almost 35,000. Volatile consumer confidence may have resulted in major decisions being put off.
