Queensland's residential property market may have finished 2007 on a high, but more modest growth is expected this year, according to the Real Estate Institute of Queensland (REIQ).
The latest REIQ figures show that in the 12 months to the end of December 2007, most areas of the state experienced strong median house price increases - however, the economic conditions that underpinned last year's market are now somewhat different.
"Last year's very strong results were driven by consumer confidence, population growth and a robust economy," said REIQ chairman, Peter McGrath.
"While Queensland's economy is still in great shape, and there doesn't seem to be any downturn in the number of people migrating to the Sunshine State from overseas and interstate, the series of interest rate rises since November last year has started to have an impact on the market."
REIQ figures show that the volume of house sales was down by about 20% in the December quarter.
"Sales numbers did decline in the month of December. This was partly driven by the interest rate rise in November, the Federal Election and Christmas, which is a historically slower period for many markets across the state," McGrath said.
The market also continues to be characterised by an undersupply of stock - particularly in the affordable range - with buyers also being more selective.
Stock market volatility is likely to impact the prestige market this year, and council amalgamations will possibly cause a few headaches over the short term, McGrath said.
Queensland has historically recorded annual house price growth of 5-10%, which is a more sustainable level, he added.
"There's no doubt that last year's results were spectacular, but a return to more sustainable levels of growth is not only likely this year, it is the preferable outcome," McGrath said.
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