National research house BIS Shrapnel predicts Brisbane to be the only capital city to buck the national trend of easing median house prices over the next three years.
The BIS Shrapnel Residential Property Prospects 2015-2018 has just been released, and with it has come a wave of commentary and opinion pieces surrounding capital city performance and predictions.
Head of research Angie Zigomanis estimated Brisbane’s median house price this year at $520,000 but said that it was still below Brisbane’s June 2010 peak in real terms. Along with low interest rates, Brisbane’s affordability was at levels seen in the early 2000s.
House Price vs. Unit Price
In terms of the median house price, this is forecast to rise by a total of 13% over the three years to 2018, while the median unit price is forecast to rise by 6%.
Its new dwelling supply overall, without ‘any significant rebound expected in population inflows’, was set to move the Brisbane apartment sector into oversupply, “with some impact across the broader market.”
But importantly, this is mainly focused around inner-city suburbs – which is generally the case where ever you are. Regardless of this however, Brisbane is still tipped to be the only capital city that will not experience a decline in median house prices in real terms in the next three years.
Nationally, its expected that the low interest rate environment will help drive price growth in undersupplied residential markets in 2015/16 – but the possibility of tightening rates and less affordability may create conditions for price declines in a number of cities from 2017, according to the forecaster.
But importantly, and here’s the point to remember: “doomsday predictions for the residential market are… overblown.”
“Although Australia’s residential property markets are forecast to steadily weaken from 2016/17, as a combination of rising supply and the prospect of a tightening in interest rate policy impacts on prices, any downturn will be similar in magnitude to that seen over 2011-12.”
Source: Property Observer