On the other hand, once you dig a little deeper into the data, the resulting projections are a little more mixed. While house prices are projected to rise in 2017, prices for units and apartments are projected to drop.
“I think prices will continue to fall in the Brisbane apartment market,” said Dr. Andrew Wilson, Domain Group’s chief economist. He credited this decline to the large number of new developments slated for 2017.
The median house price for Brisbane was $532,050 at the end of November this year. This is expected to grow to $553,332 in the next 12 months. In contrast, the median unit price is currently $367,720 and is expected to shrink to $353,011 in the next 12 months.
Wilson says the decline in unit prices is likely to continue sometime into 2018; that’s when demand will likely catch up with supply. “We’re already seeing approvals for apartments falling,” he said. “As demand rises, as it will, we will see the prices rise.”
According to the Property Investment Professionals of Australia (PIPA), the huge price difference between Brisbane and the southern capitals (Sydney and Melbourne) is attracting investors to the former’s apartments.
“I think on the whole it’s going to be an affordability story,” said Ben Kingsley, chairman of PIPA. “There’s an almost 70 per cent difference in median value and only a 17 per cent income difference between Brisbane and Sydney.”
Darryl Conroy, senior economist at Suncorp Bank, agrees that out-of-state investors will be drawn to Queensland in the coming months, with prices at such affordable levels. “The most recent economic data seems to point to a reinvigoration of [Queensland as an] investment centre,” he said.
Interest in Brisbane’s budget suburbs has remained steady, but Wilson said growth next year would be driven by houses in the higher-priced neighbourhoods throughout Greater Brisbane.
“The mid- to high-price ranges have done the best,” he said. “Even though we’ve seen some movement in the budget markets, we still haven’t seen as much growth as you’d expect from lower interest rates.”
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