"The RBA board's decision to cut the cash rate by 25 basis points supports the further growth expected from the Brisbane property market." - Mark McEvoy, Senior Investment Analyst, Inception Wealth Group
Homeowners should sit tight and enjoy the ride as Brisbane’s housing market prepares for an incoming wave of predicted price growth, according to one analyst.
The CoreLogic Home Value Index for February shows home values in the Queensland capital rose 0.6 per cent last month and have increased 2 per cent over the past 12 months to hit a new record high.
Brisbane home values have now risen for eight straight months, with the median value now $503,265, according to CoreLogic.
Buyer confidence has also surged. The city’s auction clearance rate is more than double what it was this time last year, with 63.2 per cent of properties selling under the hammer compared to only 27 per cent a year ago.
Nationally, property prices increased 1.1 per cent in February, pushing them to within 1.2 per cent of their 2017 high.
CoreLogic head of research Eliza Owen said she expected home values in Brisbane to rise more than 2 per cent over the next 12 months.
“I would expect further growth, so people might only think about selling if they have to,” Ms Owen said.
“Otherwise, it could be a good time to see how the market moves over this year.”
Ms Owen said the pick up in mining investment, migration to Queensland and its relative affordability were factors that were likely to drive capital growth in the Brisbane market.
CoreLogic director of research Tim Lawless said southeast Queensland’s housing market was one to watch “for a stronger performance later this year”.
“In regions such as South East Queensland, housing is very affordable relative to Sydney and Melbourne, jobs growth is trending higher and unemployment is reducing,” Mr Lawless said.
“The primary factors driving this rebound remain in place and include an extremely low cost of debt and improved borrowing capacity.
“However, considering the sluggish pace of household income growth, housing affordability is eroding rapidly, which is likely to see some parts of the market become less active.”
AMP Capital chief economist Shane Oliver said the boost from the election result, RBA rate cuts, the relaxation of the 7 per cent mortgage rate serviceability test along with a greater willingness to lend by banks were continuing to drive home prices higher.
“We also anticipate a broadening out of the property price gains beyond Sydney and Melbourne as Brisbane and Adelaide are relatively cheap,” Mr Oliver said.
The majority of economists are expecting interest rates to be cut further this week.
Even the NAB has changed its interest rate call ahead of Tuesday’s Reserve Bank of Australia board meeting.
The bank now expects the RBA to cut the cash rate by 25 basis points, and again in April.
Source: https://www.realestate.com.au/news/brisbane-home-prices-rise-for-8th-straight-month-more-to-come/
Tilley, E. (2020, March 3). Brisbane home prices rise for 8th straight month, more to come. Retrieved from https://www.realestate.com.au/news/brisbane-home-prices-rise-for-8th-straight-month-more-to-come/