Brisbane’s housing market appears to be braving the apparent slowdown in price increases in Australia.
CoreLogic data shows a “re-acceleration” in house price growth in Brisbane.
The value of homes in the capital of Queensland even rose by 2.5% in October, the highest growth rate in all capitals in the month.
Eliza Owen, CoreLogic’s head of research, said Brisbane’s recent gains were the highest monthly gain in the city during the current uptick and the strongest since November 2003.
“The Brisbane housing market has seen some extraordinary tailwinds from COVID-19, including strong interstate migration, normalized remote working and low exposure to the virus itself,” she said.
Despite these gains, the median house price in Brisbane remains significantly affordable at $640,000, compared to $1.1 million in Sydney and $780,000 in Melbourne.
Adelaide in Brisbane’s footsteps
Adelaide’s housing market also defied the slowdown, reaching a monthly increase of 2% in October.
As in Brisbane, Adelaide’s recent monthly profit was the highest since 2003.
Momentum was driven by Adelaide’s 2.2% rise in house prices, but unit values also posted a steady 1% gain over the month.
“The Adelaide housing market has recently benefited from a stronger inter-state migration trend, relative affordability to other capitals and a low number of available properties for sale, with total housing numbers 34.1% below the five-year average,” said Ms Owen.
Fastest Price Delay
Of all capital cities, Perth reported the largest slowdown in price growth in October.
Over the month, Perth sank into the red, pushing home prices down 0.1%.
Property prices in Perth peaked at 2.7% earlier this year before slowing sharply in June when prices rose just 0.3%.
“This slowdown in momentum could be due to a few different factors, including extended state border closures, renewed affordability restrictions on first-time homebuyers and a recent surge in new listings,” said Ms. Owen.
Sydney and Melbourne reported the second and third fastest slowdown in price growth in October.
Sydney price increases peaked at 3.7% in March and quickly declined to 1.5% in October.
“The slowdown in growth is likely driven by affordability constraints and the higher levels of new offerings that have been added to the market in recent weeks,” said Ms. Owen.
Meanwhile, recent headwinds have hampered activity in Melbourne, where price growth has slowed from a peak of 2.4% to 1% in October.
“More recently, Melbourne has seen the biggest increase in new offers in the capitals,” said Ms Owen.
Interestingly, Melbourne’s recent 0.4% price increase was still well above the average monthly increase for the decade.
Outlook for price gains
Ms. Owen said that while the pace of real estate gains is slowing each month, reduced rates are still relatively high compared to the decade average of 0.4%.
“Through 2022, monthly growth rates are expected to continue to decline, due to a combination of factors, including a tighter credit environment, more normalized quote levels and affordability constraints, which are putting downward pressure on demand,” she said.
The projection of a likely rate hike in 2023 and the tighter lending environment, Ms Owen said, also need to be checked, as these would likely put downward pressure on prices.
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