Brisbane house prices: Surprise fall over winter

By Lauren Cross
Updated October 22 2014 - 7:08pm, first published 6:10pm
This house at 81 Roderick Street, Ipswich, is currently on the market. Photo: RAY WHITE
This house at 81 Roderick Street, Ipswich, is currently on the market. Photo: RAY WHITE
Now under contract: 9 Cormack Street, Sherwood. Photo: Walsh and Dixon
Now under contract: 9 Cormack Street, Sherwood. Photo: Walsh and Dixon

It has been touted as the next 'hotspot' city but Brisbane house prices cooled over winter.

Figures in the latest Domain Group House Price Report show the median house price fell by 1.3 per cent over the September quarter, which is the first negative result in more than two years.

Domain Group* senior economist Dr Andrew Wilson said the result was disappointing after lots of hype surrounding the sunshine state.

"Surprisingly, the Brisbane house price stalled over the September quarter," he said.

"Even though we saw a flat result generally everywhere when we look at the breakdowns of the local government areas, it was again the lower priced areas of Brisbane that recorded the greatest house price falls."

The median house price dropped 3.1 per cent in Logan and 1.8 per cent in Ipswich. Moreton Bay's median house price dipped 2.4 per cent and Redland Bay's median house price also fell 0.4 per cent.

"It reflects the underperformance by the local economy, higher unemployment and concerns about job security," Dr Wilson said.

"There are higher stock numbers in Ipswich and Logan and that's part of it too."

However the Brisbane City Council median house price remained flat, according to Domain Group figures.

And it's not all bad news, with Brisbane City Council's median house price increasing by 7.6 per cent over the past 12 months to $565,000.

"Even though prices were flat over the September quarter, Brisbane city still recorded quite a healthy annual result," Dr Wilson said.

"Redland was the second highest [performing area], with prices up 4.4 per cent [over the year]."

 

Why clouds over the sunshine state?

Brisbane outshone the local government areas further out, but Walsh and Dixon agent Moira Dixon admits even the inner and middle-ring suburbs were still flat over the cooler months.

She said since being an agent for the past 22 years, the annual drop over winter was standard due to the fact Brisbane was such a summer-loving city.

"Brisbane people hibernate," she said.

"They just don't do much in winter and Brisbane homes don't look as appealing in winter because a lot of them have pools. But as soon as it gets warmer a lot of people start looking and the aspiration is to be in the new home by Christmas."

She added most sellers liked to list their property when the flowers were blooming and the pool was sparkling and the temporary drop wasn't really an issue. A property at 9 Cormack Street, Sherwood just went under contract, and this was the sort of house that always appealed to buyers in spring, she said.

Ray White agent Neil Munday said as long as properties were priced correctly, they were selling. He currently has a listing at 81 Roderick Street, Ipswich, and has sold three properties in Ipswich over the past 72 hours.

About 25 per cent of sales were thanks to investors, he added.

"It was pretty consistent right across winter," he said.

"Normally May and June are quiet but they were my best months in 10 years."

Mr Munday also bought a property last year in Brisbane's Annerley for $544,00. He said eight months later, someone knocked on the door and offered him $610,000. 

A good time to buy

Investor Paul Vesey-Brown isn't concerned about the slight fall in Brisbane prices over the September quarter.

The IT expert just bought a renovated three-bedroom property in Red Hill less than three kilometres from the CBD. The Upper Kedron resident said the cheaper prices of accommodation near the CBD compared with Sydney and Melbourne appealed to him most.

"Due to the rapid rise of property prices in the southern capitals, people are moving to Brisbane to find not only affordable housing but also a lifestyle change," he said.

"In Brisbane specifically, property prices have been reasonably steady but are showing signs of a rise, following on from recent increases in Melbourne and Sydney. Young families favour Brisbane for raising families due to the lifestyle and weather."

Mr Vesey-Brown's offer of $720,000 was accepted before auction. He was later told another potential buyer would have been prepared to bid up to $750,000.

He said the fact there wasn't enormous competition under auction conditions made the buying process in Brisbane much easier.

"I think now is a great time to buy. Interest rates are unlikely to get any lower, banks are actively advertising for loans and the Reserve Bank of Australia is scare-mongering of a housing correction. Also hindsight is a wonderful thing. How many times do we say to ourselves 'I wish I bought that five years ago?'"

The national outlook

And while Brisbane might have been flat over the September quarter, so was the rest of the country.

The national median house price increased by just 1.2 per cent over the quarter, which takes the annual growth to 9.4 per cent.

"The national house price result is the lowest quarterly growth rate recorded since March last year and continues to be primarily reliant on the strength of the Sydney market," Dr Wilson said.

"The Sydney market will continue to lead the pack, however, the clock is now ticking for that market as further signs of moderation are emerging."

* Domain Group is owned by Fairfax Media.

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