The unprecedented apartment boom in Brisbane tipped the market well and truly into oversupply, but approvals have fallen substantially.
“And the number of dwellings under construction has been trending lower for some time,” Kusher said.
“Some caution around high-rise markets is warranted in light of high supply and less demand from foreign buyers and domestic investors however, new unit supply has moderated earlier in Brisbane than elsewhere.”
• House prices fell 1.1 per cent over the quarter and 0.3 per cent over the year to $563,666
• Unit prices fell 3.7 per cent over the quarter and 5.2 per cent over the year to $372,852
Greater Brisbane house prices have stalled following six years of continuous annual growth, with prices flatlining over the year according to Domain Group’s quarterly house price report.
Brisbane house values slipped 1.1 per cent lower in the first quarter of this year and are down 1.3 per cent over the last 12 months.
“Homeowners may not be reaping equity gain but flat house prices is a better outcome than a fall, which is what’s playing out across most capital cities,” Domain senior research analyst Nicola Powell said.
However, the markets remain fragmented, with apartments continuing to underperform free standing homes, a trend running since mid-2012.
Brisbane apartment values remain 12.2 per cent below their peak 2010 conditions with the current oversupply of new apartments slowly being soaked up.
“Unit prices are 9.6 per cent below the mid-2016 peak, with buyers now able to reap the benefits of purchasing at 2013 prices,” Powell said.
“Significant supply numbers have weighed heavily on unit prices. Although listing volumes are shrinking, it has not been enough to translate into price growth yet.”
For now, conditions in Brisbane, the apartment construction market that was first to boom and also the first to decline, remain weak.
Hopes are growing for the apartment market in the Queensland capital.
A separate report by JLL this month said Brisbane apartment prices and rents would stabilise over the next 12 months.
Moody’s Analytics has also tipped values in Brisbane’s apartment market to recover 0.9 per cent this year.
Queensland’s big infrastructure spend could stabilise housing
Brisbane, as well as most part of the state of Queensland, offers stronger capital growth prospects compared to other capital cities across Australia, banking on strong population growth.
Brisbane’s economy is being underpinned by major projects like Queens Wharf, TradeCoast, Cross River Rail and the second airport runway
“New residents will be further lured by growing job prospects, with Queensland leading the way in March for full-time employment growth,” Powell said.
“Several key projects will provide further economic benefits, both financial and as an employment base.”
“Placing these key factors into context provides a clearer picture of the strong underlying demand for housing from both investors and owner-occupiers.”
Queensland remains the third most popular destination for overseas migrants and is drawing the highest number of interstate movers, with Brisbane capturing the biggest flow of new residents.
Saved by sluggish growth
Housing market growth has been skewed toward Sydney and Melbourne since the global financial crisis, with Brisbane’s residential market experiencing minimal growth over the same period.
“The relative strength of the Sydney and Melbourne economies, strong migration into those cities and a relatively low supply of stock available for sale has supported this growth while these conditions have generally not been apparent in other capital cities,” Kusher said.
Settled sales transactions continue to trend lower for Brisbane, declining 5.6 per cent over the past year, while Brisbane property listings are taking longer to sell.
“There has been a large rise in the length of time it takes to sell a property in Brisbane over the past year,” Kusher said.
Brisbane suburbs that experienced the largest growth in house prices over 2018 are Karalee, Karana Downs, Brookfield, Ipswich and Riverhills while Carole Park, Eagle Farm, Logan Central and Fig Tree Pocket suffered the largest falls.
“It can be easy to forget the diversity across property market performance as some regions continue to deliver solid growth conditions while others drag averages lower,” Kusher said.