The December quarter saw housing values jump in cities and towns all over Queensland, in light of lower interest rates and improved access to credit, according to the REIQ.
According to data released by the Real Estate Institute Queensland (REIQ), the median house price in Brisbane rose by 3.6 per cent in the December 2019 quarter, to a new record-high of $703,000, following on from a number of consecutive quarters of price contractions.
However, strong growth in the Queensland capital was overshadowed by immense market growth in key regional areas across the state, including Noosa and Rockhampton.
Noosa took the trophy for the state’s top performer in the December 2019 quarter, experiencing an 11.6 per cent hike in housing prices.
Strong contenders included Rockhampton, which saw an 8 per cent rise in house prices over the quarter, and the Sunshine Coast, which grew by 6 per cent.
Evident of the tough market conditions faced in Queensland prior to the December quarter, the full-year price growth results are significantly more subdued, with the median house price in the Sunshine Coast growing by just 0.3 of a percentage point when compared to December the previous year, and Noosa’s median house price falling by 3.3 per cent overall year-on-year.
According to the REIQ, December 2019 saw an increase in the number of first home buyers (FHBs) entering the market, with 1,800 new loan commitments made for FHB owner-occupiers over the month, up from 1,559 in December 2018.
ABS figures from January 2020 show another hike, with 1,903 first home buyers entering the market, and making up 30.5 per cent of all owner-occupier loan commitments in Queensland for the month.
The REIQ attributed the growth in both prices and demand with record-low interest rates, the removal of lending curbs imposed by the Australian Prudential Regulation Authority (APRA) in mid-2019, as well as easing serviceability measures by the banks.
However, the Queensland institute stated the strong December figures are not likely to survive far into 2020, particularly in light of the ongoing COVID-19 outbreak worldwide, and the subsequent government measures including social distancing and lockdown procedures.
While current auction clearance rates in Brisbane have remained largely in line with the city’s stronger market conditions, the government has now introduced harsher measures to slow the spread of the virus, including the banning of public real estate auctions and open homes, both of which are highly likely to affect the housing market.
While there is currently significant concern about how the virus will impact our national economy, including a recession, for those of us in the property sector, it’s important to remember how our markets have responded in the past.
Commenting on the December results, CEO of REIQ Antonia Mercorella said: “There’s no question that many locations across the state started to firm at the tail-end of last year, similar to other markets around the nation.
“Time will tell whether these stronger market conditions continue in 2020 — particularly with the coronavirus (COVID-19) now impacting the national and global economies.”
She continued: “Many locations across Queensland produced robust market conditions in the final quarter of last year which — together with affordability factors — is likely to underpin our markets in possible tumultuous times ahead.”
Ms Mercorella stated that in the past, Queensland’s property market has “shown resilience” in the face of economic turbulence, and reassured property owners that property, as an asset, will bounce back, despite current uncertainties.
“During the GFC, prices strengthened over the medium term in many locations, courtesy of economic stimulus as well as low interest rates. Likewise, after the last recession, prices continued to firm over time, even with high unemployment,” she said.
“The illiquid nature of property as well as the tendency for home owners and investors to hold for the long term means this asset class can withstand short-term financial upheavals better than most, which is likely to be the situation following the coronavirus pandemic as well.
“There is a reason why the adage ‘as safe as houses’ has been around for so long.”