Brisbane house prices have plunged $66,000 in three months as the steepest quarterly fall on record brought the city’s near four-year boom to an end.
asserted
fall → plunge → end
The price of a typical Brisbane house fell 5.4 per cent in the September quarter – the second steepest drop of any capital, to $1.15 million – the latest Domain House Price Report, released on Thursday, showed.
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Report → fall → Thursday
The fall ended a 14-quarter growth run as interest rate hikes, stretched affordability and investors exiting took their toll.
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investors → end → toll
Only Perth fell more, recording a 7.4 per cent slide that Domain’s chief residential economist warned was a cautionary tale for Brisbane.
“The depth of the decline this quarter took my breath away, to be honest … and prices are going to fall again,” said Dr Nicola Powell.
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Powell → fall → breath
“This is the start of the downturn for Brisbane, and it shows affordability has finally become a constraint.
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affordability → show → Brisbane
“Brisbane has been the strongest housing market in Australia for years, but buyers just can’t absorb that price growth long term, and its pathway is kind of being mapped by Perth.”
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pathway → absorb → Perth
Even after the fall, houses remain 5.3 per cent dearer than a year ago – but the quarter wiped out more than half the $123,600 gained over the previous nine months.
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quarter → remain → months
Units held up more, rising 10.5 per cent over the year, despite a quarterly fall of 3 per cent.
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Units → hold → cent
Just a few pockets defied the trend.
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pockets → defy → trend
House prices held steady at $950,000 in the Loganlea-Carbrook region and edged up a slight 1.8 per cent to $946,500 in Springwood-Kingston.
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prices → hold → Kingston
Houses in Brisbane Inner City rose a marginal 0.2 per cent to $2,087,500.
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Houses → rise → 2,087,500
Units also bucked the trend in the Redcliffe area – up 0.7 per cent to $1,015,000 – and the Mount Gravatt area – up 0.4 per cent to $870,500.
LJ Hooker Property Partners’ Kosma Comino said the Mount Gravatt and Sunnybank Hills markets were “holding but not holding” as low confidence spooked buyers and sellers.
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confidence → buck → buyers
“Sellers are holding off because of the ‘doom and gloom’ and so we actually have a bit more of an undersupply issue in our area,” he said.
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he → hold → area
“And that’s saved us.
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that → save → us
Stock-wise, we’re down 7 per cent [year-on-year].”
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we → ’re → year
Comino expects prices to keep falling until Christmas, with an even bigger correction to come in the first or second quarter of next year if one or two more rate hikes hit.
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hikes → expect → year
“It’s going to get rough,” he said.
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he → go → ?
“I do think there’s a floor for us …
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I → think → us
I think that once that capital gains tax kicks in from next year, that will be the bottom.
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that → think → year
The worst-case scenario is we’ll lose another 10 per cent.”
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we → lose → cent
Comino said downsizers were still active with a cohort of upsizers also taking advantage of market conditions.
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cohort → say → conditions
“The Bayside in particular is going off – that’s where all the downsizers are going.”
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downsizers → go → ?
Jonathan Koleszar of McGrath Redcliffe agreed, saying downsizers were driving the region’s apartment market and sparing it from some of the bigger price corrections seen elsewhere in the city.
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downsizers → agree → city
“A penthouse at 1 Redcliffe by Gardner Vaughan Group just sold for $10 million [off the plan] … and when it settles it will be a new record,” he said.
“
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he → sell → plan
We are noticing a lot of buyers coming from out of area now too.
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lot → notice → area
people will always be more confident when they are buying into an area that’s more lifestyle-driven and when you can look out at the water it makes the market almost recession-proof.
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market → buy → water
“I actually think it’s only the beginning for us, and that’s because it’s sat dormant for so long here.”
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it → think → us
Koleszar said houses were also attracting families in their 30s and 40s, with an undersupply seeing some homes sell in a week after multiple offers.
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homes → say → offers
Yet more broadly, Powell said total property supply in Brisbane is now at its highest volume since 2020.
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supply → say → 2020
“Listings are accumulating and buyers are pressing pause because there are confidence issues,” she said.
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she → accumulate → pause
“If we have a fifth rate hike, it would be a further sting in the tail.”
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it → have → tail
PRD chief economist Dr Diaswati Mardiasmo said the market was echoing pre-COVID conditions, offering buyers a much-needed breather.
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market → say → breather
“Before the pandemic, we were tracking at about 5 per cent [growth] annually … and we’re back to that point now,” she said.
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she → track → point
“And it’s a good thing in terms of affordability because we were really climbing high in terms of how much of our income was going to mortgages.
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much → ’ → mortgages
Nationally, about 50.9 per cent is going to mortgages and that’s severe.”
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that → go → mortgages
She said global benchmarks put mortgage stress at about 30 to 40 per cent of income.
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benchmarks → say → income
“So now for anyone coming into the market this slowdown gives them a little less debt to carry,” she said.
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she → come → debt
Mardiasmo expects the Brisbane market to keep growing, albeit at that slower annual pace, “even if we have another one or two cash rate hikes”.
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we → expect → hikes
The Aporia
