After a two-year slide, the latest stats show we’re at or near the bottom of this property cycle.
Corelogic reports that in July 2019, dwelling values increased across all capital cities except for Adelaide, Perth and Canberra.
The stabilisation in housing values is becoming more broadly based, with five of the eight capital cities recording a subtle rise in values over the month, while the regional areas of South Australia, Tasmania and Northern Territory also recorded a lift in housing values in July.
Over the month, combined capital city values increased by 0.1% while the combined regional markets recorded a -0.2% fall.
There has also been a notable change in buyer sentiment, with buyers out in the market applying for loans, looking at properties and making offers.
The turnaround in sentiment can be traced to a number of factors:
- The RBA’s back-to-back interest rate cuts, which have pushed mortgage rates to record lows, and the prospect of further falls to come;
- Banks passing on the rate cuts to borrowers;
- The APRA’s loosening of mortgage stress tests;
- The best housing affordability nationally since 2016;
- Tax cuts putting a little more money in our pockets;
- Positive messages in the media stoking consumer confidence; and, of course,
- Increased confidence after the surprise re-election of Scott Morrison’s government in May, which killed off Labor plans to wind back tax breaks for property investors.
Brisbane
Brisbane’s property downturn has been quite shallow compared to the big two capital cities, with local values only 2.9% below their peak.
But this followed a relatively mild growth cycle where growth in housing values in Brisbane averaged only 1.4% per annum over the past five years.
There is little difference between the performance of houses and units across Brisbane, with values down 0.8% over the past three months across both sectors of the market.
While Brisbane apartment values remain 12.5% below their 2010 peak, the unit oversupply has slowly been absorbed due to the rising population at a time of less new supply coming on to the market.
With migration rates lifting, supply under control and generally healthy levels of housing affordability, the Brisbane housing market fundamentals are looking healthier compared to most other capital cities.
At the same time the underlying strong demand from home buyers and investors from the southern states at a time when yields are attractive and housing affordability is relatively healthy and putting a floor under property prices.
Brisbane’s economy is being underpinned by major projects, such as Queen’s Wharf, HS Wharf, TradeCoast, Cross River Rail, the second airport runway and the Adani Coal Mine, but jobs growth from these won’t really kick-off for a few more years.
Source: www.smartcompany.com.au