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As seen in the Source link, written by couriermail.com.au on 2019-11-12 22:48:29

QLD_CM_REALESTATE_ANZCORELOGICHOUSINGREPORT_13NOV19

Shaun and Stephanie Noffke are saving for a deposit for their first house. Photo: Steve Pohlner.

HOUSING affordability in Brisbane has peaked, but there are still more areas where it is cheaper to buy than rent a home than in any other capital city in the nation.

A new report by ANZ and property analyst CoreLogic reveals household incomes have risen faster than home values in the Queensland capital over the past decade, making it easier to get into the housing market.

Over the past 10 years, Brisbane’s median home value has risen by 1.6 per cent per year, while household incomes increased by 2.5 per cent per annum.

RELATED: Growth star suburbs revealed

The suburbs of Paddington and Petrie Terrace are seen with the Brisbane CBD skyline in the background. Image: AAP/Darren England.

And the amount of household income required to service a new mortgage in Brisbane has not been this low since 2003.

According to the report, it is cheaper to buy than rent a home in nine locations — Springwood-Kingston, Inner Ipswich, Ipswich Hinterland, Beenleigh, Beaudesert, Browns Plains, Forest Lake-Oxley, Loganlea-Carbrook and Springfield-Redbank.

Darwin and Hobart both had three suburbs where it was cheaper to buy than rent, while Perth and Adelaide had two, Canberra and Melbourne had one and Sydney had zero.

ANZ senior economist Felicity Emmett said the fact Brisbane had the highest number of areas where it was cheaper to buy than rent suggested it could attract more potential home buyers to Queensland.

“That does suggest that for aspirational buyers, Brisbane should be quite desirable, and it probably underlines the fact we are seeing quite strong interstate migration into Queensland,” Ms Emmett said.

ANZ senior economist Felicity Emmett.

She said there seemed to be a consistent pattern across all capital cities that it was still “much more affordable” in the outer rings.

“The areas most affordable in Brisbane are Springfield and Ipswich, compared to unaffordable areas like Indooroopilly and Mount Gravatt,” Ms Emmett said.

“It clearly reflects the fact there are more services and infrastructure in those inner areas, so it does make it slightly more difficult to get into those suburbs.

“The most expensive area (in greater Brisbane) is Bribie-Beachmere, so clearly coastal areas continue to generate a premium in terms of prices.

“I think the gap between the inner and outer ring highlights that there is a role for government and a role for better infrastructure, which would help make some of those areas that are quite affordable more accessible for workers.”

But it appears the affordability party could be over for house hunters.

Housing is becoming less affordable across all capital cities, except Perth and Darwin, according to CoreLogic.

Apartment buildings are seen in the Brisbane suburb of South Brisbane. Image: AAP/Darren England.

In the three months to the end of October, home values in Brisbane rose 1.1 per cent — a significant turnaround from the first half of the year when they were in decline.

In fact, home values are correcting so quickly that CoreLogic predicts Brisbane is on track to fully recover by March 2019 — the second strongest capital city market set to bounce back after Melbourne.

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CoreLogic research director Tim Lawless said Brisbane had suffered a mild correction in comparison to some other capital cities, so that it put it on track for a faster recovery.

“Brisbane is showing the next fastest recovery time frame (after Melbourne); not because values are rising rapidly, but mostly because the correction in values across Brisbane was quite shallow (down 2.9 per cent from peak to trough),” Mr Lawless said.

rpdata Research Director Tim Lawless pictured in Sydney on Monday.

CoreLogic research director Tim Lawless.

Mr Lawless said market conditions had “fundamentally shifted” in the second half of this year, which would impact affordability going forward.

“While household incomes are likely to have nudged higher, dwelling values are once again rising at a faster pace than incomes across many regions of the country,” Mr Lawless said.

“As our affordability measures are updated to reflect conditions post June 2019, we expect to see housing affordability once again becoming more challenging for Australians who don’t own a home.”

Ms Emmett agreed.

“It looks as though we’ve seen the peak in affordability for most capital cities — certainly Sydney, Melbourne and Brisbane,” she said.

“As we look further out, we’re likely to see an increase in prices given the combination of lower interest rates, better access to credit and more certainty around taxation arrangements for investor housing.

“It just highlights the challenges policy makers are facing in trying to address some of these issues.”

Housing affordability has reached its peak in all capital cities, except Perth and Darwin, according to CoreLogic. Photo: Brett Wortman/Sunshine Coast Daily.

Shaun and Steph Noffke have been saving a deposit to buy a house in Brisbane for the past 10 years and have been in the market for the past two years.

Shaun, a building designer, and Steph, an interior designer, would like to buy in Holland Park in Brisbane’s south, but have already had eight serious attempts at securing a contract dashed.

“Most of the time we’ve been basically outbid by investors,” Mrs Noffke said.

“It’s a good area so obviously lots of people are wanting to get in there.”

This house at 18 Curlewis St, Holland Park West, is for sale for offers over $1.225m.

They have had to increase their deposit by $50,000 to realistically secure a property in their suburb of choice.

“We started with low expectations originally,” Mrs Noffke said.

“However, we are being careful with our money as most of the houses in that area are older and need serious renovation.”

The home value to income ratio in Holland Park is 6.5 and 34.8 per cent of household income is required to service a mortgage, according to the ANZ/CoreLogic report.

WHERE IT IS CHEAPER TO BUY THAN RENT IN BRISBANE

Region % income to pay mortgage % income to pay rent

1. Springwood-Kingston 24.6% 27.7%

2. Ipswich Hinterland 25.8% 27.7%

3. Beenleigh 28.9% 30.7%

4. Beaudesert 31.1% 32.4%

5. Browns Plains 25.8% 26.4%

6. Forest Lake-Oxley 28.1% 28.8%

7. Loganlea-Carbrook 26.5% 26.9%

8. Ipswich Inner 23.9% 24.3%

9. Springfield-Redbank 22.6% 22.8%

(Source: The November 2019 ANZ-CoreLogic Housing Affordability Report)

This property at 10 Park Court, Springwood, is scheduled for auction later this month.

GREATER BRISBANE’S TOP 5 MOST AFFORDABLE AREAS

Region Home price to Yrs to save a % of household % of household

income ratio 20% deposit income required to income required

service 80% LVR to rent a home

mortgage

1. Springfield-Redbank 4.3 5.7 22.6% 22.8%

2. Ipswich Inner 4.5 6.0 23.9% 24.3%

3. Springwood-Kingston 4.6 6.2 24.6% 27.7%

4. Browns Plains 4.9 6.5 25.8% 26.4%

5. Ipswich Hinterland 4.9 6.5 25.8% 27.7%

(Source: The November 2019 ANZ-CoreLogic Housing Affordability Report)

This three-bedroom cottage at 28 Brisbane Rd, Redbank, is scheduled for auction in November.

GREATER BRISBANE’S TOP 5 LEAST AFFORDABLE AREAS

Region Home price to Yrs to save a % of household % of household

income ratio 20% deposit income required to income required

service 80% LVR to rent a home

mortgage

1. Bribie-Beachmere 8.1 10.8 43.2% 41.8%

2. Sunnybank 7.7 10.3 41% 30.5%

3. Sherwood-Indooroopilly 7.2 9.6 38.4% 28%

4. Mt Gravatt 7.1 9.5 37.8% 28.9%

5. Redcliffe 6.9 9.2 36.7% 33.1%

(Source: The November 2019 ANZ-CoreLogic Housing Affordability Report)

This four-bedroom house at 4 Lalroy St, Beachmere, is on the market for offers over $289,000.

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