Brisbane housing market ‘doing a Bradbury’ with house and unit values set to rise
BRISBANE’S beaten down apartment market is on the verge of a major recovery, with a leading analyst predicting unit values to jump more than 6 per cent next year.
Moody’s Analytics and CoreLogic’s latest quarterly home value report predicts the city’s apartment values to rebound in 2019, after years of pain caused by overbuilding.
High rise apartments in Brisbane’s West End. Picture: Mark Calleja.
House values are also tipped to climb, but at a steadier rate.
Brisbane house prices are forecast to grow by 1.5 per cent in 2018 and a further 2.7 per cent in 2019, with strength in the city’s inner and west markets offsetting declines in the south.
Suburbs like Carindale, Holland Park and Sunnybank have experienced a 40 per cent spike in the value of houses since mid-2012, but with muted income growth and strong supply, values are tipped to fall 1 per cent this year.
Brisbane house values should continue to rise steadily, according to a new report.
Moody’s Analytics economist Katrina Ell said the worst was likely over for Brisbane’s apartment market, with unit values tipped to recover by 0.6 per cent this year, followed by sharper growth of 6.2 per cent next year.
“That’s really on the back of the fact that we’ve seen apartment values have a relatively worse run compared to housing values in Brisbane in recent years,” Ms Ell said.
“The underlying driver is we’re forecasting steady growth in the Queensland economy, specifically Brisbane.
Moody’s Analytics is tipping strong growth in the Queensland economy. Image: AAP/Darren England.
“Brisbane is in a pretty good spot in that its economy is quite diversified … and that’s going to propel income growth and, more broadly, apartment growth heading into next year and beyond.”
“It’s not experiencing anywhere near the sharp correction we’re forecasting for Sydney in particular. It’s largely escaping the worst, which is great news for homeowners in Brisbane.”
CoreLogic head of research Tim Lawless said the recovery in the apartment market had been a long time coming.
“It’s definitely good news for apartment owners in Brisbane who are doing it very tough — particularly around the inner city markets,” Mr Lawless said.
CoreLogic head of research Tim Lawless.
Mr Lawless described Brisbane’s detached housing sector as ‘doing a Bradbury’.
“You might describe this as a bit of a Steven Bradbury moment, where Brisbane is starting to outperform simply because the other cities have fallen over,” he said.
“Brisbane is really displaying its resilience, partly thanks to having a sustainable growth rate over the past five to 10 years.
“We haven’t seen the same wealth creation effect as in Sydney and Melbourne, but the silver lining is we haven’t seen housing affordability deteriorate and now the housing market nationally is in a downturn but Brisbane isn’t showing that trend.”
Brisbane’s housing market is experiencing sustainable growth, according to CoreLogic’s Tim Lawless. Image: AAP/Darren England.
Nationally, Moody’s Analytics predicts the housing market to continue its downward correction through 2018 and most of 2019, with values set to fall by 1.6 per cent this year on the back of a 9.5 per cent gain in 2017.
Sydney is driving the deceleration, with house values predicted to decline more than 5 per cent this year.
Tighter credit conditions, slower income growth, and the recent run-up in housing supply, are also behind the expected weakness.
Elsewhere, the growth in house values in Melbourne is forecast to decline sharply this year and next, Adelaide’s house prices will remain steady and Hobart’s housing market is reaching the end of its bull run.