Buyer caution is prevailing in the South East Queensland property market with sales volumes falling across all price segments.
According to CB Richard Ellis’ latest research, the long term outlook for South East Queensland is bright, underpinned by strong economic growth and strength in the resources sector.
In the shorter term however, the report found that significant obstacles for growth are putting substantial pressure on the region – such as the recent flooding, Cyclone Yasi, tough conditions for tourism as a result of the strong $A and a housing construction industry “firmly in the doldrums”.
CBRE’s report found that the best performing sector of the market is currently the sub $500,000 inner heart of Brisbane.
“This area of the market has seen reasonable levels of activity and those properties located within approximately 15 kilometres of the city have been the best performing in regard to buyer interest,” CBRE regional director of residential mortgage valuations Tom Edwards said.
Conditions have deteriorated across all other segments, Mr Edwards said, particularly entry level properties in fringe suburbs that benefited from the beefed-up First Home Owner Grant.
“Increasing interest rates in particular have impacted on this segment of the market and lower sales volumes have created an oversupply of listed properties in these fringe areas,” Mr Edwards said.
Mr Edwards said that as yet there had been little or no discounting of property located in flood affected suburbs that had not been directly impacted but it was still difficult to determine any clear trends.
“In the coming weeks and months, the approach of lenders and insurance companies with respect to properties in flood affected areas is likely be one of the telling factors with respect to buyer activity.”