Brisbane house prices decline for eighth straight quarter but not yet at the bottom: Australian Property Monitors

Brisbane house prices fell by 1.3% in the June quarter to a median of just under $428,000 – the lowest reading since December 2008 and the eighth straight quarter that house prices have fallen – according to the latest quarterly figures from Australian Property Monitors (APM).

The decline in Brisbane house prices, which dates from the June 2010 quarter, came on the back of a very buoyant market with Queensland one of the last housing markets to feel the effects of the GFC.

The housing market took another battering following the January 2011 Brisbane floods and other natural disasters in the state.

Brisbane remains the most affordable mainland capital city detached housing market, below Adelaide, where house prices remained unchanged over the June quarter at a median of $436,000.

Year-on-year, Brisbane house prices have fallen 3.7% since June last year, more than Melbourne's 2.6% year-on-year decline, with Adelaide (- 2.1%) and Sydney (-1%) also recording smaller 12 month declines.

Brisbane unit values declined more steeply over the June quarter – down 1.7% to a median of $356,744 – but are down a more modest 0.8% over the 12 months to June, compared to house prices.

APM recorded a Brisbane auction clearance rate of just 29% last weekend.

Both RP-Data and Rismark have the Brisbane housing market well down over the 12 months to June – with their data pointing to an even steeper annual decline.

However, RP Data-Rismark reported a 0.9% gain in Brisbane house prices in the month of June to a median of $435,000 – suggesting the market may have begun to finally turn around.

RP Data-Rismark has Brisbane house prices down by 4.9% for the year.

Residex says Brisbane house prices fell 2.37% in June, 3.75% over the June quarter and are down 6.5% for the year with a median value of $412,500.

The Real Estate Institute of Queensland (REIQ) reported an easing in the Brisbane rental vacancy rate over the June quarter to 2.1% from 1.7%, although the inner city suburbs remain tightly held at just 1.6% “with property managers from REIQ accredited agencies reporting some rent increases taking place, especially for houses, due to stronger demand”.

The REIQ has Brisbane house prices down 4.7% over the March quarter to a median of $505,000 and has yet to release June quarter results.

According to Dr Andrew Wilson, senior economist at APM, Brisbane house prices are showing no signs of price growth at this stage and the market is likely to fall further.

He says the recent performance is somewhat “counterintuitive” given that recent ABS housing finance figures show that the value of investor loans approved over the first five months of the year rose 31% in Queensland.

“Brisbane is suffering from a lot of stock that needs to be absorbed,” Wilson says.

“There is not much competition for properties. This will only increase when the amount of residential stock listed for sale comes down.”

According to RP Data, Brisbane residential listings fell 3.5% for the year to July 8.

SQM Research recorded a 4.4% year-on-year decline in Brisbane residential stock-on-market to end of June, but recorded a 3% rise over June counting 30,080 property listings.

Wilson says there are positive signals of longer-term recovery for Brisbane including stronger population growth in South East Queensland due to people chasing higher wage growth in the state (off the back of mining activity).

“But I don’t see the bottom of the market yet,” he says.

Noting the volume of apartment projects underway in the inner Brisbane suburbs (there are more than 40 at various stages of development at present), Wilson says there is growing demand for inner city Brisbane living.

However, given that it’s an emerging new market, he says it will take time to gain traction.

“It took decades for the Melbourne inner city market to gain traction and we are still seeing prices coming down.”

"The Brisbane inner city market is on watch."