The Sunshine State records a spotty performance as it works to mitigate oversupply in the inner city
Brisbane enjoys the status of being a cheaper alternative to Sydney, but too much supply has been slowing the market down.
According to the Residential Property Prospects 2017 to 2020 report released by BIS Oxford Economics, the growth rate of the median house price in Brisbane has been inconsistent. Following a season of increases during the 2015/16 period, values instead fell in 2016/17.
Vacancy rates also increased by over 3% in the year to March 2017, following declining levels of migration into Queensland. This decline is spurred by the weakness of the economy and the job market.
“On balance, the soft economic environment in Queensland and the emerging oversupply of dwelling stock is having the greater impact in containing house price growth,” says Angie Zigomanis, senior manager at BIS Oxford Economics.
“However, economic conditions are expected to have now bottomed out and migration flows into Brisbane are forecast to increase, particularly given Brisbane’s price advantage over the southern capitals.”
The employment market is predicted to finally see some upswing in 2019/20. The accompanying increase in population is expected to inspire a modest boost in house prices, although oversupply will continue to eat into growth potential.
Regional markets shine
While the Sunshine Coast and the Gold Coast generally follow Brisbane’s house price trends, they have shown greater growth.
The lack of new residential construction in these areas after the GFC caused vacancy rates to drop. Meanwhile, inter- and intra-state migration flows have strengthened as a result of the many job opportunities generated by tourism.
“The Gold Coast has benefited from the investment delivered for the 2018 Commonwealth Games and this has significantly improved the infrastructure in the region, transforming it into an international hub,” says Real Estate Institute of Queensland CEO Antonia Mercorella in REIQ’s March Quarter Queensland Market Monitor report.
The report also notes that the Sunshine Coast and the Gold Coast are the top destinations for interstate migration, with over 10,000 people moving into these areas in 2016.
“Our hope is that the recovering coal price will give the Queensland economy a much-needed boost and that the Government’s recently announced infrastructure and jobs programs succeed in creating jobs for Queenslanders that will help them gain secure and affordable housing,” Mercorella states.
SUBURB TO WATCH
MCDOWALL: Schools draw families to bushland suburb
Situated 9km north of the Brisbane CBD, the suburb of McDowall is known as the site of the Raven Street Reserve. This large bushland area is bordered by urban housing and major roads, and boasts different kinds of flora and fauna.
The commercial scene is no slouch either, as McDowall is home to major shopping centres, including Northwest Plaza and McDowall Village Shopping Centre. Several schools have been established in this area as well, namely McDowall State School, Northside Christian College and Craigslea State High School.
With the abundance of educational institutions, houses are sought after by families, causing values to rise steadily. Investors also reap a reasonable average rental return of 4.2%.
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