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Moderate growth in Brisbane housing market forecasted

25 August 2010

According to business and industry forecaster, BIS Schrapnel, property prices in Brisbane are expected to experience moderate growth in the latter stages of 2010.

Image of house on dollar sign on a seesaw to depict housing affordability

The June 2010 housing affordability report states:
“Moderate growth is expected in Brisbane, Hobart and Canberra due to weaker underlying demand and local economic conditions over the next three years, while the very strong price rises in Melbourne and Darwin have pushed affordability and will limit further rises.”

Interest rates are expected to continue to influence purchaser confidence – this time for the better:
“The more stable interest rate environment is expected to underpin purchaser confidence as economic conditions continue to strengthen, and should continue to push through moderate house prices rises” the report says.

Furthermore, Bis Schrapnel could not foresee any fall in house prices due to property investors returning to the market – a 26 per cent increase in home loans to property investors was reported in the March quarter this year.

The spotlight on Brisbane reveals that the median house price of $465,000 at June 2010 represents an 11 per cent rise in house prices over the past year in the state capital. Over a two-year period, this reflects an overall five per cent annual rise.

Rental growth is also expected due to a shortage of new dwelling construction. “Even though overseas migration inflows are steadily easing, a deficiency of stock is still in place with dwelling construction below underlying demand,” says Angie Zigomanis from Bis Schrapnel. “This is expected to put pressure on vacancy rates and result in stronger rental growth later in 2010. The deficiency of dwellings, and improved rental picture, will continue to maintain investor demand and assist prices.”

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