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Brisbane is edging closer to Australia’s most expensive place to buy a home but industry figures say the market is cooling following the federal government’s property tax overhaul designed to improve affordability.
Prices in the Queensland capital continued to tick up despite downturns in Sydney and Melbourne, with Brisbane’s median home value rising 0.9 per cent to nearly $1.13 million in May, according to the latest report from property research firm Cotality.
During the same period, prices in Sydney – the country’s most expensive market – fell 0.9 per cent to more than $1.28 million. It is now just under 14 per cent more expensive than Brisbane.
The median Melbourne price fell 0.8 per cent to more than $810,000.
Brisbane buyers agent Scott McGeever said on the ground a cooling of the market was obvious, with sellers working harder than ever before to attract potential buyers.
“I don’t think I’ve been emailed or received texts from so many agents as I have over the last few weeks. It’s amazing,” he told this masthead.
“The numbers of buyers at open homes have dropped off, the numbers of listings coming onto the market have increased.
“I think everyone’s a bit cautious at the moment.”
Growth still slowed in the River City, but the figures demonstrated continued high demand despite a perfect storm of rate rises, low consumer sentiment and uncertainty after major tax reforms.
Unit 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 more than $880,000.
Beaudesert (24.7 per cent) and Loganlea (24.1 per cent) recorded the highest growth over the12-month period.
Cotality head of research Gerard Burg said a lack of supply was behind the market resilience in Brisbane.
“It has been [a] market that has really held up better than most … but we are also seeing this loss of momentum in Brisbane as well,” he said.
“I think it comes down to supply.”
He said those shortages may push the median price in Brisbane closer that of Sydney temporarily, but it was unlikely to remain above the southern city long term.
“Sydney can probably maintain a higher median value … just from a higher median income perspective.
“Unless that sort of shifts, I don’t think you can really sustainably have a higher cost in Brisbane.”
Rents in Brisbane climbed 6.7 per cent for houses over the past 12 months, and climbed 6.2 per cent for units.
McGeever said if the cost of renting a home continued to climb at that rate, it could increase the number of people living in sharehouses or moving in with other family members across the city.
“We do look at that and wonder how much more renters generally can cope,” he said.
“Rental affordability is already very stretched and for a lot of people that might mean starting to make some decisions about household composition.”
Despite the perceived cooling of the market, PRD chief economist Asti Mardiasmo said he wouldn’t be surprised if Brisbane continued to edge closer to eclipsing Sydney prices “real quick”.
“Unless something big happens in Brisbane … there is a very high chance [it] will be one of the most expensive capital cities in Australia,” he said.
Mardiasmo said Brisbane rents could be pushed up by recent negative gearing reforms, which may reduce the numbers of landlords in the city.
“There’s still a rental crisis in Queensland,” she said.
“I think with Brisbane, there’s a little bit more danger for that, just because of how our housing supply is really low when it comes to rental.”
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