Queensland is Australia’s next big housing hotspot
QUEENSLAND’S housing market is tipped to lead the country for capital growth in the next two years while prices in NSW and Victoria continue to slide, according to a survey of hundreds of property professionals.
The latest National Australia Bank (NAB) quarterly survey of 300 respondents reveals the industry expects house prices in Queensland to increase by 0.7 per cent in the next year and to have risen by 1.3 per cent in two years.
Areas tipped to enjoy above average growth over the next year include Brisbane, Cairns, the Gold Coast and the Sunshine Coast, with Coomera and New Farm singled out as suburbs expected to outperform.
The outlook for rents in the state is also positive and likely placing upward pressure on yields.
Property professionals predict rental growth in Queensland of 1.3 per cent over the next 12 months and to have grown by 1.9 per cent in two years.
Despite tougher restrictions on housing investment, the number of local investors in new property markets were especially active in the sunshine state, with more than 32 per cent of buyers in this market in the second quarter of 2018.
Foreign buyers’ appetite for property fell in all states, except Queensland, where the share of sales to that market jumped to a four-year high of 22.8 per cent in the past quarter.
“This may have reflected anecdotal reports of increased Chinese property investment associated with record numbers of Chinese student enrolments in the state,” the report said.
In Queensland, foreign buyers accounted for 5.4 per cent of all residential property sales in the three months to June 30.
But NAB’s own view of the housing market is less optimistic.
Its Residential Property Index fell sharply in the June quarter – down 17 points to sit at +6, although sentiment in Queensland was higher at +14 points.
The bank’s economists expect prices for houses in Brisbane to remain “broadly flat” over the next two years, while the forecast for Sydney and Melbourne is for prices to drop.
NAB predicts a sharp decline in unit prices of 4.5 per cent in Brisbane over the next year.
Confidence in the housing market nationally also fell to a new low, driven mainly by the cooling of prices in NSW and Victoria.
NAB chief economist Alan Oster described Brisbane’s housing market as “going sideways”, but he said house prices were still up about 13 per cent from their previous trough around 2010.
“It hasn’t peaked yet, so that’s good,” he said.
“We’re seeing quite strong economic activity in Queensland, so that always helps.”
But Mr Oster said Brisbane’s unit market was still a concern as it was about four times overbuilt.
In its latest report, industry forecaster BIS Oxford Economics predicted Brisbane would experience the highest house price growth of all capital cities over the next three years – jumping 13 per cent, or $70,000, to a median of $620,000.
And while ANZ sent east coast homeowners into a panic recently when it predicted Sydney and Melbourne house prices would likely slump 10 per cent, it had no such bad news for Brisbane.
ANZ senior economist Daniel Gradwell said Brisbane’s improving economy and population growth would keep it “insulated” from the impending property correction in its neighbouring cities.