While the rest of the other capital cities continue to rack up impressive gains, Brisbane has remained in the doldrums.
The strong recovery seen in other eastern seaboard states this year has so far eluded Brisbane. During the three months ending September, median values rose by a paltry 0.06% according to Residex. In fact during the month of September, prices fell by 0.65%, dragging the median house value to $452,500. Units also lost some ground with median values dropping by 0.49% to $358,000 during the three months ending September.
Brisbane"s sluggish performance has baffled some experts who continue to see long-term potential in the Sunshine State.
"Brisbane is an interesting one because we usually see Brisbane at the top of these performance tables. Brisbane is typically one of the best performers; it certainly hasn"t been during 2009. It"s been down with Adelaide and Perth in terms of year-to-date performance. It would be interesting to see what happens with Brisbane because I still have Brisbane as being the number one performer over the long term due to the SEQ Regional Plan and mostly because that"s where some of the largest infrastructure project is underway in Australia," says Brisbane-based Tim Lawless, national research director with rpdata.com.
One of the reasons of Brisbane"s poor performance is the fact that it didn"t have the same magnitude of pent up demand from first home buyers seen in both Sydney and Melbourne that eventually fuelled the recovery in those markets according to John Lindeman, chief analyst at Residex.
"The problem with Brisbane is that it had a far greater number of suburbs and no shortage of land. This means that there"s always land available and new development occurring. Housing development continues apace all the way to Sunshine Coast, to Toowoomba and the Gold Coast. Brisbane never had that backlog of would be homebuyers that built up in Sydney and Melbourne. Conversely, you never had that great rush of people into their first home as we saw in Sydney and Melbourne, which then triggered the growth we"re seeing in those markets. That growth has been slowly absorbed over the years so it"s just not there. There"s no impetus for people to move from one home to another in a way that it has been in Sydney and Melbourne," explains John Lindeman, chief analyst at Residex.
Brisbane is also paying the price of the strong growth it achieved during 2006 to 2008 when property price surged by a total of 27%. Affordability- which was one of Brisbane"s selling points - was decimated by the twin effect of rising rates and soaring property prices.
"Affordability is the real issue and real constraints on further price growth in the Brisbane market," says Paul Braddick, head of property and financial systems analysis at ANZ. "Generally, the prospect for Brisbane is reasonably positive but in the short term it will be subdued."
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