Brisbane is closing in on Australia’s most expensive place to buy a home but industry figures say the market is continuing to cool following federal property tax reforms designed to improve affordability.
Prices in the Queensland capital continued to rise despite slumps in Sydney and Melbourne, with Brisbane’s median house value rising 0.9 per cent to almost $1.13 million in May, according to the latest report from property research firm Cotality.
During that period, prices in Sydney – the country’s most expensive market – decreased by 0.9 percent to more than 1.28 million dollars. It is now less than 14 per cent more expensive than Brisbane.
Melbourne’s median price fell 0.8 per cent to more than $810,000.
Brisbane buyer’s agent Scott McGeever said the cooling of the market was evident, with sellers working harder than ever to attract buyers.
“I don’t think I’ve had as many emails or messages from agents as I have in the last few weeks. It’s amazing,” he told this masthead.
“The number of open house buyers is down, the number of listings is up.
“I think everyone is focused right now.”
Growth remained subdued in the River City, but figures showed continued strong demand despite a perfect storm of rising rates, low consumer sentiment and uncertainty after sweeping tax reforms.
Product prices in Brisbane grew by more than house prices, up 1.3 per cent in May compared to 0.8 per cent. The median unit price was over $880,000.
Beaudesert (24.7 per cent) and Loganlea (24.1 per cent) recorded the highest growth over the past 12 months.
Cotality head of research Gerard Burg said a lack of supply was behind the market’s resilience in Brisbane.
“It’s been (a) market that’s been better than most … but we’re also seeing this loss of momentum in Brisbane as well,” he said.
“I think it comes down to distribution.”
He said the shortage could push the average price in Brisbane closer to that of Sydney for a while, but it was likely to remain above the southern city for a long time.
“Sydney can probably maintain an above average value … from an above average income perspective.
“Barring that kind of change, I don’t think you could have a higher cost in Brisbane.”
Rents in Brisbane rose by 6.7 per cent for houses over the past 12 months, and rose by 6.2 per cent for units.
McGeever said if the cost of renting housing continues to rise at that rate, it could increase the number of people living in shares or moving in with other family members across the city.
“We’re looking at that and wondering how much tenants in general can afford,” he said.
“Rental affordability is already widespread and for many people that could mean starting to make decisions about household structure.”
Despite the market cooling, PRD chief economist Asti Mardiasmo said he would not be surprised if Brisbane continued to approach Sydney prices “very quickly”.
“Unless something big happens in Brisbane … there’s a very good chance (it will) become one of the most expensive capital cities in Australia,” he said.
Mardiasmo said Brisbane’s rents could be boosted by recent negative reforms, which could reduce the number of homeowners in the city.
“There is still a rental crisis in Queensland,” he said.
“I think with Brisbane, there’s more of a risk to that, just because of how tight our housing supply is when it comes to renting.”
Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.
