House values in Brisbane appear to be on its way to recovery with the latest data from the Queensland Department of Natural Resources and Water showing an average house prices in Brisbane have returned to their pre-GFC level.

The data showed average house prices have recovered in the December 2009 half year to $560,000, which is 10% higher than the average of $511,223 recorded in the June 2009 half year.

Midwood Report author and analyst, Bill Morris, says that the new data follows a fall of 10%, which occurred from the pre-GFC peak in December 2007 to the trough ending in June 2009.

"The fall in average house prices has now been matched by the recovery of similar magnitude. However, sales volumes have not improved in the latest six month period and are still at their lowest levels since 1980.

"This reflects the 'credit squeeze' for residential housing finance, despite the effects of the first home buyers grant. Credit continues to be a serious problem in housing and low sales volumes have a negative impact on associated industries, such as real estate agencies, removalists, valuers, solicitors, financers and the furniture/white goods/electrical sectors."