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A new report has analysed the state of the Brisbane market, looking at how property has performed there as the halfway point of the year approaches, and where it is likely to move in the second half.
According to Herron Todd White’s Month in Review report for June 2019, the Brisbane market has been “less dramatic” compared to other markets, but the report notes this as a positive, labelling the first half of the year as conservative.
“The general consensus among our valuers is that Brisbane has been a steady performer across the board. There was some minor price softening in our markets, but not enough to give owners the jitters,” the report noted.
“In addition, when compared to some of the country’s larger markets, we were probably considered a stellar performer by some.”
The report claimed that figures at the start of 2019 pointed towards growth, but market forces reversed the course of this potential.
However, this has resulted in the market appearing to be affordable when compared to other states.
A series of infrastructure projects in the state, both announced and commenced, have been described by the report as likely to increase employment prospects, which would funnel through to the state’s economy.
However, the same factors holding back the property market in other states were still felt in Brisbane, such as tight lending conditions and market uncertainty created by the federal election.
“Of course, with the election over and APRA starting to relax borrowing guidelines, it could be brighter times in the months to year’s end,” the report claimed.
Property located in the sub $2 million market, for example, was affected the most, according to Herron White Todd’s analysis.
“While there were still enough buyers with the desire to purchase in this bracket, their aspirations were slowed by loan rejections,” the report noted.
“The result has seen properties sitting on the market for longer than in previous years and, in some instances, asking prices are being reduced slightly to achieve a sale.”
Meanwhile, property above $3 million seemed to be immune to market influences, with sales at this price bracket performing well, according to the report.
Tighter finance has also impacted sales conditions, with the report noting finance clauses running between 21 to 30 days, which is long when previously finance clauses were at seven to 14 days.
Oversupply of high-rise units have seen a noticeable easing off, the report stated, especially within investor supply, and as such this property type has noticed a continued decline in value.
In comparison, owner-occupied boutique units were seeing relative success in the face of development sales rates at historically low levels.
“If you were purchasing a unit at the start of 2019, hopefully it was one that would appeal as much to owners as it would to investors,” the report stated.
New house and land also saw a slowdown in the rate of sales during January to June.
Rental properties, however, have seen a slight and gradual rise throughout the first half of the year, providing some relief for landlords.
In the latter half of the year, the report notes that following the result of the federal election, sentiment “turned on a dime the Monday after election weekend”.
“In fact, the feeling is pent-up demand for investing in real estate will be released as we travel through to the end of the year,” it stated.
“This may well result in improved values too, but let’s report on that when December rolls around.”