The established suburbs of Brisbane continue to boom, while the mortgage belt starts to feel the bite of rising interest rates.
“Brisbane should still be one the top-performing capitals in the nation in 2008,” says Andrew Donnelly, CEO of Braxton Chase. However, he adds that “upward movement will be more subdued compared to the break-out year of 2007”.
According to Residex, the median house price in Brisbane rose to $448,500 at the end of January 2008. That’s a 6.04% increase over three months and a 23.30% rise year on year. Brisbane units increased in value by 17.05% in the 12 months to January and by 5.77% in the three months to January, achieving an average of $333,000.
Alison Timchur, Brisbane research analyst with Colliers International, says, “Queensland generally has just had a really strong economy for the last few years.” She adds that excellent infrastructure, an enviable lifestyle and a booming jobs market are all supporting continued population growth, which in turn is propping up prices.
“We’re still getting people pouring in from other states,” she says. “Previously it was more a flight for affordability, but with the prices in Brisbane increasing so much over the past five years, it’s now just become a lifestyle destination.”
Donnelly agrees that “population growth, job creation and the spill-over effects of the state’s steadily growing economy will continue to reverberate throughout the Brisbane residential market”.
“We expect the outlying areas – those 8–15km outside of the city – to benefit the most in 2008,” he adds.
However, not all sections of the Brisbane real estate market are enjoying prosperous times. “Like Sydney, the top end of the market is booming,” says Donnelly.
“Riverfront properties and inner-city luxury units are selling rapidly and buyers are paying premiums to get their foot in the door.” But for those who bought in growth corridors to the west and south of the city, the spectre of mortgage defaults looms large.
Rural Queensland is also a little more subdued when it comes to price growth. House prices in the country grew 11.15% in the 12 months to January and just 1.99% in the three months to January. Median rents are $320 a week, yielding 4.54%.
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