Brisbane property market recovering but Gold Coast still struggling: CBRE

The Brisbane housing market is starting to experience the benefits of the resources boom but the Gold Coast remains one of the “worse performing markets,” says CBRE in its second quarter south-east Queensland market view report. 

The report notes that the Sunshine Coast housing market continues to struggle – though not to the same extent as the Gold Coast market – with both coastal markets not seeing much benefit from the mining boom in central and northern Queensland.

CBRE mortgage valuations regional director Tom Edwards says the Gold Coast is clearly a buyers’ market, with slow conditions still prevailing. 

“The Gold Coast remains one of the worst-performing residential markets in Australia, with oversupply in the unit market a major issue,” he says. 

“The oversupply of prestige apartments is still the biggest issue on the Gold Coast, with a lack of active buyers in this sector,” says the report.

The Sunshine Coast faced similar conditions in the second quarter, though the value decline was not as steep. Some signs of increased activity were recorded in the quarter in the lower price brackets, but these markets remain overwhelmingly soft. 

“The prestige market, particularly in Noosa, is still trending down, with agents reporting very low levels of buyer interest,” says Edwards. 

The report says that these two markets are under pressure from low levels of buyer confidence, with sales volumes continuing to trend downwards. 

Illustrating clearly the uneven effects of the mining boom on regional property markets, recent figures released by the Real Estate Institute of Queensland (REIQ) for the March quarter show Gold Coast house prices down 5.1% to a median of $454,000. 

In comparison, house prices in the resource-rich Isaac region are up 28% to a median of $703,000 over the same period. 

Brisbane house prices improved 1.2% over the March quarter, according to the REIQ, to a median of $505,000, but are still down 4.7% over the past year. 

The REIQ says the March quarter result indicates the Brisbane housing market has turned a corner, with “positivity finally returning to the market”. 

However, according to CBRE the improvements in Brisbane have not been sufficient to indicate an increase in capital housing values in the state. 

“Improvements have been identified for properties within a 15-kilometre radius of the Brisbane CBD, though activity is still confined to realistically priced property,” says CBRE global research and consulting associate director Sam Reilly. 

“In some instances, back-up contracts are being sighted by valuers indicating some proven levels of demand that have also been illustrated by reduced selling periods." 

However, tough operating environments remain in areas that are not exposed to the benefits of the resource sector such as the Gold Coast and Sunshine Coast. 

CBRE says that Queensland, while remaining a state that is showing strong prospects courtesy of the huge expansion in the mining sector, is experiencing significant challenges in other sectors. 

Challenged sectors include tourism, manufacturing and construction. 

However, CBRE expects the mining boom to provide longer-term opportunities for the state including in terms of jobs and infrastructure improvements. 

Further west, the Toowoomba market continues to record historically low sales volumes, but buyer sentiment has improved as a result of the change in state government and interest rate reductions, says CBRE. 

According to Edwards, the short- to medium-term outlook for the overall south-east Queensland market is likely to continue remain segmented, with scheduled growth proportionate to resources proximity.