As property becomes more affordable, demand has picked up in select parts of the state, especially Brisbane. But in order to sell, vendors have had to often realise some loss.
In a broad sense, the Queensland market is still struggling. But there are pockets of sunshine that could start breaking the gloomy outlook and point to good things ahead, once again.
Demand is still sunk along many of the coastal and mining resource areas, but the properties in prime locations around Brisbane still in an affordable range of under $500,00o or especially under $400,000 have been "steaming along," says Scott McGeever, president of the Real Estate Buyers Association of Australia.
"The only slowing we've seen has been brought on by the banks for not extending enough finance to people," he says. "As far as buyers go, though, they are out there."
The main reason for this resurgence has been a return to affordability in the state. The Real Estate Institute of Queensland (REIQ) says the percentage of family income required in Queensland to meet average loan repayments has decreased from a high of 41% in June last year to 30% in March this year.
First homebuyers likely saw the goal of owning property slipping through their reach last year, only to see it return again with lowered interest rates, government incentives, and lowered property prices.
"The combination of strong property price growth over recent years and interest rates that peaked at 9.6% less than a year ago meant that home ownership was increasingly out of reach," REIQ chairman Peter McGrath said. "And that high interest rate environment also saw the number of homeowners in mortgage stress increase dramatically."
A standard variable interest rate can now be found below 6%.
As McGeever pointed out, however, some buyers have struggled to get the money to finance home purchases. On properties under $500,000, buyers usually need about a 20% deposit, have a stable job and buy in a stable area to get finance, he says.
Areas of high unemployment in Brisbane, including the south suburbs, often bring tighter lending criteria.
"But those markets are still going along," says McGeever. "We're starting to see investors come back to the marketplace."
In the higher price brackets, however, the market is weak. Few are looking to buy, and thus few are selling.
"There's a lack of stock from $600,000 to $1m," says McGeever. "Sellers have just said, 'There are no buyers, so I'm not going to put my property on the market.'"
There is some demand here, but nowhere near where it was in 2007.
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