The opening quarter of 2016 was not the greatest three months for Brisbane’s property market and one member of the real estate industry believes the end of the current growth cycle in the city and the wider south east Queensland region is already in sight.
Figures released this week by the Real Estate Institute of Queensland (REIQ) show the median house price in the Greater Brisbane area fell 4% over the March quarter to $480,000, while in the Brisbane Local Government Area, which encompasses the city’s inner suburbs, the median house price fell 2.4% to $620,000.
Speaking to Australian Broker's sister publication,Your Investment Property, REIQ chief executive officer Antonia Mercorella said the March quarter was a “slow” one for Brisbane, but she believes there isn’t too much cause for concern.
“Both of those markets, which had been performing consistently well slipped a little bit in the quarter. But that is only one quarter so we do need to be careful not to draw too much from that or sound the alarm bells at this stage,” Mercorella told Your Investment Property.
“Both the LGA and Greater Brisbane have been performing consistently well and if you look at the broader data they’re still tracking nicely,”
According to the REIQ’s figures, the Greater Brisbane median house price has grown 2.1% growth over 12 months to March and 7.8% over the past five years, while in the Brisbane LGA the median house price is up 6.1% over the 12 months to March and 17.9% over the past five years.
Mercorella said figures from the June quarter may too show a softening in Brisbane’s performance due to the impact of the ongoing Federal Election campaign; however she predicts the market will bounce back relatively quickly after the campaign is completed.
While Mercorella believes Brisbane still has plenty of fuel in the tank, Scott Northcott, director of Queensland based Real Property Advice, believes the peak of the current cycle is steadily drawing closer for the Queensland capital.
For Northcott, one of the factors that had breathed life into the south east corner of Queensland will also be its undoing as he predicts a post-Commonwealth Games slump.
“Brisbane will always follow Sydney and Melbourne and precede places like Adelaide, Perth and Darwin, that’s just the order things happen,” he told Your Investment Property.
“In our on the ground experience we have seen very strong price growth activity over the last 24 months and even a bit longer.
“I think we’ve got 18 more months for decent activity and I think after the Commonwealth Games at the end of 2018 we’re going to see quite an abrupt slowdown starting from the Gold Coast area. The Gold Coast will sort of infect upwards from there.”
The REIQ’s figures show over the March quarter that the median house price on the Gold Coast increased 0.5% to $557,500 and is 5.8% higher than 12 months ago and 10.2% higher than five years ago and Mercorella doesn’t believe the end of the Commonwealth Games activity will bring the Gold Coast and surrounding regions to a halt.
“I don’t think that’s going to be the case. Obviously there’s a lot of new construction going on there at the moment and other things because of the Commonwealth Games, but we were already sort of seeing the gold coast bounce back from the GFC anyway,” she said.
“I don’t think it’s going to be this situation that after the games we’re going to be left with this glut of stock and people are going to leave the Gold Coast.”
But Northcott’s outlook for the region is much grimmer, likening the current state of the Gold Coast to that of areas that went from boom to bust during the resource boom of recent years.
“People are chasing the Commonwealth Games boom.
“The big issue is that there’s a whole lot of stuff being built and sold and everybody thinks it’s all rosy, but when investors, both international and local, want to get out post Commonwealth Games they’ll simply dump their stock.
“Twelve to 18 months after the games there will be a bad taste in people’s mouths and then from mid-2020 to 2001 we’ll power on again.”
