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Brisbane remains one of Australia’s strongest property markets, despite house prices having ground to a halt in recent months.

As prices in Australia’s two biggest cities fall deeper into a downturn, Brisbane’s housing market has officially flatlined, with figures from the latest Domain House Price Report, released on Monday, showing an annual fall of 0.1 percent in the Brisbane local government area.

This equates to a $750 reduction in the overall median house price from $670,750 in March 2018 to $670,000 in March 2019.

The median house price fell by slightly more in the first three months of the year though, after finishing 2018 on a median of $675,000 compared with $670,000 in March 2019.

Median house prices

Source: Domain House Price Report, March quarter, 2019.

The figures for Greater Brisbane, which include the five LGAs of Brisbane, Ipswich, Redland, Moreton Bay, and Logan, showed the annual median house price was down slightly by 0.3 percent.

Domain senior research analyst Nicola Powell said Brisbane’s negative number was still considered a good outcome, particularly in the context of what was happening elsewhere in other capital cities across the country.

“Brisbane housing has had six years of continued annual growth, but now we’re seeing those house prices are flatlining,” Dr. Powell said.

“However, I will say that a fall of 0.3 percent is negligible. Homeowners in Brisbane may not be reaping big capital gains right now but it’s important to remember Brisbane is still a much better performer than most other capital cities.”

Median unit prices

Source: Domain House Price Report, March quarter, 2019.

Brisbane’s property market remains fragmented, with houses outperforming units for the seventh year in a row.

Unit prices in Brisbane’s LGA dropped 3.4 percent over the year to March 2019, as did units in Greater Brisbane, where units fell by 5.4 percent during the same time.

Dr. Powell said Brisbane units had fallen almost 10 percent below their price peaks in 2016.

There was a significant silver lining. “It means buyers are now buying units for the same price they would have paid in 2013, so the affordability is there,” she said.

“Listings-wise, the number of units listed for sale is shrinking, but they’re not shrinking enough to translate into price growth. That will still take time.”

Adcock Prestige, who sells some of Brisbane’s most expensive riverfront properties, said the most noticeable shift between now and 12 months ago was days on market.

“Where I used to sell a property in 30 to 60 days, they’re now taking around 75 to 100 days to get the same property sold,” he said.

“Price-wise, we’re tracking about the same. I’ve sold six multimillion-dollar properties in the past four weeks and all for good prices — none have been sold for less than what I thought they were worth.”

Adcock said he expected the market would pick up again after the federal election.

“Two to three weeks after the election, all the people who have held back from coming to the marketplace will come to the marketplace and reinvigorate it,” he said.

REIQ chief executive Antonia Mercorella said she held concerns about the future of Brisbane’s property market, with the federal election leaving its fate hanging in the balance.

“Brisbane [both Brisbane LGA and Greater Brisbane] median house prices growth has been modest but steady over recent years. However, that consistent, steady growth is plateauing in the face of strong headwinds,” she said.

“The REIQ would like to be optimistic that, with rents holding steady and proving reasonably resilient in the south-east corner, this would encourage investors to continue buying investment properties.

“However, with Labor’s negative gearing reforms on the cards, it’s unlikely we’ll see investors overcome their fears and continue to invest. The financial benefits are simply not there.

“This will have dire effects on the market, and it’s likely that the modest plateauing in house prices that we’re seeing at the moment will become a more significant dip if Labor forms government.”

Brad Robson, of Place Graceville, said prices had flatlined in his area following a flurry of activity in January but that sheer buyer numbers meant properties were generally still selling within 25 days.

“Buyers are still having children or still having kids move out and needing to downsize. Everything is still exactly the same as what it was,” he said.

“What is happening is that buyers are quite comfortable to seek out exactly what they’re wanting, as opposed to compromising and saying ‘let’s just do it because we might miss out otherwise’.

“I feel as though that’s the attitude at the moment — people are quite comfortable to pay what’s fair and reasonable, they’re just not willing to pay a record price.”

Peter Hutton, director, and principal of Hutton & Hutton at New Farm said Brisbane unit owners were more inclined to meet the market and lower their prices than house owners.

“Firstly, there’s a greater number of investors in the market, so there’s more competition,” he said. “But the other thing is the people who own houses around here enjoy a high degree of equity, which means they can choose to hold their property and not sell if they can’t get the price they want right now.

“That’s what a lot of house owners are doing. There’s been a lot of stock withdrawn from the market since September last year — they didn’t sell so they’re not off the market. They’re not going to be forced to take a lower price and they’re relaxed about it.

“In New Farm, there’s always times where prices flatten out and we go into a period of being flat — that’s the trend now. We may not see any price growth for a little while. I think personally next year we’ll see rising prices in those desirable suburbs like New Farm.

“It’s not a bad situation to be in – it’s just a pause. I do think any buyer who secures a property today that appears to be a saving compared to 18 months ago, they are the winners in this. It will only be another six months until we’re back in another good year.”

This article was first published in www.domain.com.au. Here is the link to the original article.

House prices have fallen 7.8 per cent nationally in the past year, dropping in all but two capital cities, a new report has found.

Domain Group’s quarterly Domain House Price Report, released on Monday, shows that prices held up in just Hobart and Adelaide in the first months of 2019, while Hobart remained the only state capital to record a rise in unit prices.

“We are seeing a geographically broader downturn impacting more of our capital cities – even Canberra and those that have held strong to this point,” Domain senior research analyst Nicola Powell said. “Buyer confidence is low, with the ability to get finance impacting buyers across the country. It’s not just an issue for first-home buyers; all borrowers have been impacted.”

The Sydney and Melbourne markets remain in the throes of the steepest downturn in more than two decades, Dr Powell noted.

Sydney house prices were down 3.1 per cent over the March quarter, and 11.5 per cent year-on-year, recording a median price of $1,027,962.

The harbour city’s house prices have fallen 14.3 per cent from their mid-2017 peak, with Dr Powell tipping Sydney’s median could drop below $1 million in coming months, a low not seen since June 2015.

For the first time in three years, the price of a unit in Sydney dipped below $700,000, Dr Powell added.

Melbourne house prices fell for the fifth quarter running, down 2.4 per cent in the most recent period and 10.4 per cent year-on-year, with Dr Powell saying the downturn had filtered through from the high-end market and was being felt across the city.

With a median of $809,468, Melbourne house prices were now sitting 11 per cent lower than their highs of 2017. While unit prices held firmer, Dr Powell said they had “dropped for four consecutive quarters, pulling prices back 8.3 per cent from the peak notched a year ago”.

Despite the figures, Dr Powell noted that Domain had seen a rise in views for online listings in Sydney and Melbourne, indicating there was still considerable buyer interest, despite the slowdown.

Hobart bucked the national trend, again recording strong growth, with house prices up 3.1 per cent in the March quarter and 7 per cent over the year, to $478,247. The city was the only capital to record growth over both the quarter and the year for houses and units, continuing its streak as the best performing city for capital growth.

“In the space of a year-and-a-half, Hobart has gone from the most affordable city in which to purchase a unit, to more expensive than Adelaide, Darwin and Perth,” Dr Powell explained. “If the pace of growth continues, Hobart unit prices are likely to overtake Brisbane’s in the coming months.”

Coming in behind Hobart as the second-best performing capital, and one of just three to record an increase over the year, Adelaide’s house prices grew 2 per cent to $542,474. Unit prices fell from the record high achieved last quarter, down 1.3 per cent to $312,459.

Dr Powell said Adelaide homeowners had enjoyed close to six years of steady price growth, and it was now the third-most affordable city in which to purchase a house, overtaking Perth’s median for the first time since 1993.

“House prices remain higher than Hobart, but galloping Hobart prices mean the price gap is at a 12-year low,” she said.

After six years of continuous growth, the nation’s capital is feeling the pressure with house prices in Canberra experiencing their steepest annual fall in a decade, down to $722,440. Despite the 2 per cent drop, Dr Powell said conditions in Canberra were anticipated to resemble a “short softening, rather than the correction currently unravelling in Sydney and Melbourne.”

She said the upcoming election was likely weighing on local confidence, but higher stock levels and difficulties securing finance were also to blame for the slower market activity. “I think this is an illustration of a market that would otherwise be growing if it wasn’t for the restrictions to credit,” she said.

It was a similar story in Queensland, where Brisbane house prices stalled for the first time since mid-2012, down 0.3 per cent over the year to a median of $563,666. Unit prices fell 5.2 per cent in the 12 months to $372,852.

Dr Powell said houses had outperformed units in Brisbane for the past six years. “Unit prices are 9.6 per cent below the mid-2016 peak, with buyers now able to reap the benefits of purchasing at 2013 prices,” she said, citing oversupply as a keen contributing factor.

“Although listing volumes are shrinking, it has not been enough to translate into price growth yet,” she added.

Property prices in Perth and Darwin continued to reflect the fact they are cities trying to claw their way back from the slump following the mining investment boom, Dr Powell said. At $529,997, Perth’s median house price had fallen 5.2 per cent in 12 months and is now 14 per cent lower than its 2014 peak.

Dr Powell said that while Darwin’s house price median edged 1.5 per cent higher over the year to $514,546, property prices continued to be affected by weak economic conditions.

“A recovery in Darwin’s housing market largely hinges on the government’s attempts at boosting the population, jobs growth and an improvement in the availability of housing credit,” she said.

Perth’s median house price has dropped 5.2 per cent in the past year despite early indicators of encouraging signs of a market recovery, new figures show.

House prices fell 2.5 per cent during the March quarter to $529,997 compared to a median of $559,296 in March 2018, according to the latest Domain House Price Report, released on Monday.

Unit prices fell 1.1 per cent during the quarter and 5.6 per cent year-on-year to $347,596.

Domain senior research analyst Nicola Powell said despite the signs of a recovery during the first quarter of this year, house and unit price falls have gathered pace.

“House prices are now 14 per cent, and unit prices 16.6 per cent, below the 2014 peak,” she said. “The market recovery is going to be delayed in Perth on the back of the more restricted lending environment.

“If we had (the same) lending (conditions) before the tightening of conditions, I think we would be seeing more signs of recovery now, but that isn’t the case.

“You are seeing borrowers being assessed at around seven per cent interest – basically their assessment for a loan is much higher than current mortgage rates. I think, for some buyers, it means that they can’t get finance, or those that can get finance, their loan size is being reduced.”

Property analyst and valuer Gavin Hegney said the March quarter data was equivalent to a rate of an annual decline of 10 per cent.

He said there was an oversupply of just less than 10,000 properties for sale in Perth, which was concentrated in the lower end and outer suburbs, with properties selling well below replacement costs.

“The numbers also show the banking royal commission and its impact on reduced lending capacity had a greater impact on the West Australian market than any other state in Australia,” he said.

“Particularly, given the fact we really haven’t seen growth in equity in homes, in probably between five years, and in some suburbs, the past 10 years.”

Peard Real Estate chief executive Peter Peard said sales levels were low and down about 40 per cent from a few years ago.

Subdued buyer confidence, a lack of pay increases and declining property equity were among the combination of factors contributing to the state of the market, he believed.

“For summer, there has been pretty ordinary sales activity compared to historical years where it has been more buoyant at that time,” he said.

“Although in the top end there is a bit of movement even though values in that market are right down. (But) it is always good to buy and sell in the same market, whether it is good or bad.”

Dr Powell said buyers continued to have the upper hand.

“Improved affordability is providing the ultimate silver lining for prospective homeowners, allowing a purchase to be made at 2011 prices,” she said.

“Perth’s recovery is being hindered by a more restrictive lending environment at a time when local confidence is subdued under weak economic conditions. A sluggish economy is being dragged down by high unemployment, a tight consumer purse, and weak population growth.

“That said, Perth has seen extraordinary growth in the number of views per listing, figures have risen from the recent post-mining boom lows. The rise in views per listing provides a timely gauge of the change in buyer interest, which has been tracking higher since September last year.”

Mr Hegney said there was buyer interest in the more affluent suburbs of Perth, where purchasers were more confident in their jobs and of obtaining finance.

“What the banking royal commission tended to do is take out the upgrader market,” he said. “So when the top end starts to recover you normally would see the upgrader market start to recover and then it would flow through to the lower end of the market, but the timing of the reduced borrowing capacity meant the upgrader market never really started.”

This news article was first published in www.domain.com.au. Here is the link to the original article.

The northern beaches attract sun-lovers of all persuasions, from born-and-bred surfers to thrill-seeking backpackers and bikini-clad glam-squads.

It’s impossible to escape the tourists at some of the area’s most famous destinations, including Manly and Palm Beach. But in between the tourist traps are the quiet achievers; suburbs loved by locals that fly under the radar compared to their star-studded neighbours.

Warriewood is one such neighbourhood. About 25 kilometres north of the Sydney CBD between North Narrabeen and Mona Vale, Warriewood has been quietly going about its business, building a reputation as a family-friendly place with parks, wetlands, a beautiful beach and newly renovated Warriewood Square shopping centre.

Another drawcard? More affordable real estate than its fancier beach buddies.

The Dictionary of Sydney records that the northern beaches was once dotted with lagoons and swamps, including Narrabeen Creek flowing through the middle of Warriewood and Mullet Creek at the suburb’s southern boundary.

Logging made way for farming, then market gardening. In the mid-1900s, there were so many glasshouses that the suburb was known as Glass City. Nurseries slowly replaced fruit and vegetable growing until the 1990s, when the land was subdivided for housing.

“When I went to school, all along Warriewood Road was farmland,” says Marco Cimino, an agent at LJ Hooker Mona Vale. “It’s only in the past 18 years that it’s really started to change.”

Properties range from chic new builds along the coastline to established homes, new apartments and contemporary townhouses or homes in master-planned estates.

A typical two-bedroom apartment with two bathrooms and two car spaces costs about $750,000,” he says. “Townhouses range fromabout $1 million to $1.1 million. Houses can go from $1.35 million to $1.6 million, depending on size and location, to over $6 million on Bruce Street.”

Cimino says investors and young families are the main buyer groups. He has also noticed house hunters from the north shore and West Pennant Hills joining local upgraders. “Some like the leafy aspect; it reminds them of the area they’ve come from.”

Anthony Marchese moved to Warriewood in 2007 after North Manly became too hectic for his young family.

“That was before a lot of the construction,” he says. “It’s such a family-friendly area now, with lots of dog parks, beaches, bike tracks, running tracks and easy access to shopping and schools, which ticks all the boxes for young families.”

He has already upgraded once within the suburb and wouldn’t mind moving even closer to the beach.

“It’s pretty hard to find another suburb we’d want to move to.”

Two homes in the area

26 Shearwater Drive

This two-storey home on 312 square metres has bright, modern interiors, easy-care gardens, multiple decks and a nature reserve across the road. Each bedroom has built-in wardrobes, the main with a walk-in.

Expressions of interest close May 3, with LJ Hooker Mona Vale seeking offers of about $1.5 million.

109/5 Mallard Lane

This north-facing apartment in the Oceanvale complex will appeal to downsizers and young families.

Communal amenities include lap, plunge and children’s pool, a gym, sauna, barbecue area and playground.

This article was first published in www.domain.com.au. Here is the link to the original article.

Sydney and Melbourne prices may have begun to plummet but they would have to fall considerably further to be anywhere close to the largest in the country.

Sales data from the past five years has revealed Australia’s biggest real estate money pits remain concentrated in regional areas and are thousands of kilometres from the nation’s capitals.

Western Australian resource towns had the biggest drops in home values since 2013, with prices falling by up to $875,000 in some areas.

The towns with the biggest price drops included Newman in the iron ore rich Pilbara region in the northwest of WA and Derby in the Kimberley region.

Median house prices in these areas more than halved over the five-year period, shrinking from over $600,000 to under $200,000, the CoreLogic data showed.

Homes in WA mining towns were affected by the end of the mining boom. Picture: AFP Photo/BHP Billiton

Even bigger losses were recorded in the WA coastal hub of Port Hedland and sister town South Hedland.

The typical value of a home in the port 1523km north of Perth was $1.27 million in 2013 but has since shrank to about $395,000.

South Hedland houses had a median price of $865,000 in 2013. Now the median is $195,000.

By contrast, house prices in Sydney’s worst performing suburb — inner west suburb Annandale — fell 2.9 per cent over the five years, with the median unit price shifting from $770,000 to $747,500.

Port Hedland is about 1500km north of Perth.

International shifts in demand for iron ore were partly behind the falling values in resource towns, but a growing trend of fly-in, fly-out workers also depleted demand for the local homes.

Property prices and rents were further impacted by the rise of mining camps for local workers that bypassed the local housing markets of some mining communities.

Many of the camps were constructed by mining companies precisely because local rents and home prices had been skyrocketing, making the usually high cost of construction worth the investment.

Falling home values have dealt a particularly devastating blow to property investors who bought into resource towns during the height of the mining boom.

The owners of a four-bedroom house on Port Hedland’s Styles Rd have been trying to offload their property since 2013, but even after slashing more than $500,000 off the price have still been unable to sell.

They bought the property for $1.08 million in 2008. If they sold for their current listing price of $749,000 they would still lose $331,000.

Selling properties in northwest WA has become a challenge.

The tense sales environment has evaporated real estate empires seemingly overnight.

Property investor Ryan Crawford had amassed 40 properties spread mostly across the Pilbara region by 2013, which he reported at the time as having a combined value of $32 million-plus.

Much of his property portfolio has since been foreclosed by banks, according to the West Australian. Part of the Crawford property empire was sold at a fraction of the buying prices, with documents filed in the Supreme Court in 2017 showing the proceeds fell short of what was owed.

This article was first published in www.realestate.com.au. Here is the link to the original article.