Brisbane house price growth continues to outpace other capital cities. CoreLogic’s latest Home Value Index shows Brisbane property prices increased by 1.8% in February while dwelling prices nationally increased by 0.6% – the 17th consecutive monthly increase. The increase means Brisbane now has a median dwelling price of $722,433 following 29.5% growth in the past 12 months, more than any other market jurisdiction. Regional Queensland also performed well with its median price up by 1.9% in February. Adelaide is close behind Brisbane in terms of capital city price growth with its median dwelling price up by 1.5% in February. Hobart dwelling prices increased 1.2%, while Melbourne flatlined with no price movement in February. Sydney’s median dwelling price dropped by 0.1%, the first drop in prices in 17 months. CoreLogic’s Tim Lawless says the results from the smaller capital cities like Brisbane and Adelaide show there is a changing of the guard from the previous powerhouse markets of Sydney and Melbourne
Flood Impacts Expected To Be Brief
Property experts believe South-East Queensland’s flood crisis will have little long-term impact on the property market. National buyers’ agent Pete Wargent says the immediate focus will be safety, repairs and insurance but over the medium and longer-term there will be little impact on the housing market. “In the aftermath of the 2011 flooding, there was a modest downturn in prices, although the market was already experiencing relatively flat conditions at that time, after a preceding boom,” he says. Within five years of the 2011 floods Brisbane house prices increased by 25%. Wargent says there are always buyers prepared to buy within areas which have the potential to flood, particularly if the price is right. BuyersBuyers CEO Doron Peleg says floods soon become a distant memory to buyers. “A few years ago, our market research showed that out the top 20 suburbs impacted by floods in 2011, 19 of them outperformed the Brisbane house price growth benchmark over the following five years,” he says
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“I was expecting the RBA to raise rates several times by the end of the year if Ukraine hadn’t happened, but I think the RBA will now sit on their hands longer than they otherwise would have.”
ANU Economics Professor Warwick McKibbin
Regional Markets Outshining Cities
Regional property prices are continuing to outperform their capital city counterparts. CoreLogic figures for February show regional dwelling prices increased 1.6%, compared with 0.3% for the combined capitals. Over the quarter to the end of February regional prices increased 5.7% compared with 1.8% for the combined capital cities. CoreLogic’s Eliza Owen says while regional markets did well the results were not consistent across all areas, with price growth slowing in larger regional centres closer to the capital cities. “In some of the really high-end markets like the Southern Highlands, Illawarra, even the Sunshine Coast, we’ve started to see a more pronounced and consistent slowdown in growth rates, whereas in more recent months there are more rural regional areas of the country like Warrnambool, the Murray region of NSW and the Riverina area that are presenting stronger growth rates now,” Owen says. She expects buyers in regional areas where affordability has become an issue to turn their attention to units instead of houses.
Official Interest Rate Stays On Hold
Despite constant media speculation of a rise , the Reserve Bank of Australia (RBA) has kept the official cash rate on hold at 0.10% for another month. David Zammit of Mortgage Choice says although there was not enough wage growth to support a rise in March, strong economic conditions suggest there is potential for an interest rate rise later in the year. Some banks have already started to increase fixed rates independently. “Mortgage Choice monthly home loan approval data reveals demand for fixed rate mortgages dropped to its lowest level in five months in February, with only 26% of borrowers opting to fix part or all their mortgage compared to 43% in September 2021,” Zammit says. Australian National University Economics Professor Warwick McKibbin had expected several rate rises this year but says that was before the war started in the Ukraine. “I think the RBA will now sit on their hands longer than they otherwise would have,” McKibbin says
