Even though Brisbane’s house prices continue to decrease at a slightly faster rate than Sydney and Melbourne, Brisbane’s residential market is expected to outshine both cities this year.
Throughout 2018, house values in Brisbane rose by a modest 0.4% while unit costs fell by 0.7% which lead to an overall of growth of 0.2%. According to ANZ, the city is most likely to tip into negative territory this year.
ANZ economic expert Jack Chambers says, “Brisbane will continue to outperform Sydney and Melbourne but we’ll see some price declines.”
ANZ is forecasting house values to fall by 1% in both detached houses and apartments for the year to December 2019, marking an end to years of moderate general development.
According to CoreLogic data, weighed down by unit prices in the last two years, Brisbane’s growth slowed to 1.6% in 2016 and 1.8% in 2017. House prices are still about 5% lower than they were a decade ago.
Nevertheless, with brand-new supply moderating, the sector is anticipated to continue its recovery into 2019. Consultancy BIS Oxford Economics anticipates 5,700 new apartment completions in the city this calendar year – almost half of the 10,700 they peaked at in 2017.
Residential gross property yields are also higher in Brisbane at 4.5% in December compared to Sydney’s 3.3% and Melbourne’s 3.5%.
CoreLogic is wagering on another year of modest gains for Brisbane supported by interstate migration. According to CoreLogic head of research study, Tim Lawless, “Net migration rates into Brisbane should drive growth into 2019. It’s more important [than international migration] as interstate migration is more likely to include buyers.”
Recent ABS data on net interstate migration shows that over the decade to June 2017, Queensland drew in 11,000 extra residents on average every year which is significantly more than Victoria at 7,200 new residents per year. The data also shows an average of 13,600 people leaving New South Wales every year which likely contributed to Queensland’s and Victoria’s growth.
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This article first appeared on Australian Financial Review.