BRISBANE home prices are about to take off at a time when the nation’s overall housing market is in its biggest slump since the global financial crisis.
The Queensland capital was the only major state capital to record a rise in home values last month, and a leading property expert says the best is yet to come.
The CoreLogic November hedonic home value index out today confirms Brisbane home values grew 0.1 per cent during the month, while national dwelling values fell 0.7 per cent — the index’s weakest performance since December 2008.
The biggest falls were in Sydney, down 1.4 per cent in November, and Melbourne (-1 per cent).
Nationally, home values are down 4.2 per cent since peaking in October last year.
But while Sydney and Melbourne are suffering, all the indicators point to prices heading north in Brisbane, according to Place Advisory residential research director Lachlan Walker.
“Population growth, thanks to interstate migration, is the highest it’s been in a decade,” Mr Walker said.
“Infrastructure spend is also the highest in recent history — over 130 major projects totalling upwards of $55 billion.”
Mr Walker said those factors, coupled with high employment, better affordability than the southern capitals, low vacancy rates and dwindling supply were all in Brisbane’s favour.
“These leading indicators place Brisbane in a very strong and positive position to potentially recognise the growth which has been avoiding us for now close to 10 years,” he said.
CoreLogic head of research Tim Lawless said Brisbane was proving more resilient to the downturn because its home prices had never climbed as high and its recent growth was at a more sustainable level.
Brisbane’s more affordable prices relative to Sydney and Melbourne were helping prop up that market and it was arguably the country’s most stable market, according to Mr Lawless.
Better affordability also meant Brisbane was not as exposed to the current lending climate, where banks were becoming increasingly restrictive in giving out new loans.
“There has been strong migration into southeast Queensland, especially from NSW,” Mr Lawless said.
“Housing is much more affordable than in Sydney and Melbourne and that’s increasing demand for housing.
“In many ways, Brisbane has underperformed in the last decade, but that’s actually made the market more sustainable.”
Mr Lawless said the weak national result came amid tightening credit conditions, which were spreading to the owner-occupier segment of the market, as well as uncertainty ahead of the next federal election.
“Potentially investor sentiment is being weighed down by the potential for changes to taxation policies related to housing should there be a change of government,” he said.
“A negative gearing rollback looking to exclude established dwellings could diminish demand across the resale market with less investment demand for properties with low rental yields. “The halving of capital gains tax concessions would likely provide further disincentive to investment, on top of weak prospects for capital gains, premiums on investment mortgage rates, low rental yields and fewer depreciation benefits.”