ANZ article - Re Brisbane

:) Spotlight on Brisbane
With Brisbane replacing Sydney as the engine of house price growth, we look at what’s driving the property market, the outlook for 2005 and give our picks on the hot 10 suburbs to watch.

Brisbane is hot. And it is not just the weather. Over the past three years, Brisbane has outpaced its southern rivals Melbourne and Sydney to emerge as the engine of national house price growth.

And while prices are now settling down, a growing population and very strong economy suggest there is still plenty of puff left in the market.

Setting new records

Brisbane’s rise to property superstar peaked in November 2003 with the publication of official figures showing a 41.5% rise in housing values for the previous 12 months.

Brisbane’s late run at the property boom was largely driven by investors outpriced by rapidly rising prices in traditional investment centres of Sydney and Melbourne.

Whereas Melbourne house prices took five years to peak, Brisbane’s price gains were compressed into two years, eclipsing the market peaks of Sydney (26.44% in the 12 months to July 2002) and Melbourne (27.1% in the 12 months to November 2001).

However, Brisbane’s property hangover has begun to take effect this year as the party comes to an end. With such significant price jumps and poor rental yields, investor interest has abated. The market is now beginning its downward arch, 18 months after that of Sydney and Melbourne.

Prices coming off the boil

Brisbane's median house price declined by 3% in the March quarter - the most dramatic fall in prices since the last housing downturn in 1994-95, according to Real Estate Institute of Queensland (REIQ). But despite this, Brisbane managed 6.9% house price growth over the year.

Commenting on the release of the data, Real Estate Institute of Queensland (REIQ) research manager Fiona Bergin says the 3% drop in Brisbane's median house price does not equate to the beginning of a price ‘free fall’.

“Given the strong growth seen in south-east Queensland house prices in recent years, letting off a bit of steam in the form of small price declines shouldn't be unexpected,” Ms Bergin said.

“If history is anything to go by, a similar situation occurred in the mid-1990s and the subsequent slowdown was both modest and short-lived.”

Residex Managing Director John Edwards said he expects a further slowing of the market this year, with the full effect of the correction yet to be felt.

“You never get that growth at this sort of level of activity without some average negative correction … the economy would have to be phenomenally strong for there not to be a correction,” Mr Edwards said.

“There is clear evidence that the Sydney market has passed the lowest point in its cycle and is on an upward swing. But Brisbane is still on its way down.”

However, he said the market was unlikely to retreat into negative growth.

Australian Property Monitors (APM) Operations Manager Louis Christopher says, the slowdown began in the middle of last year.

According to APM:

It currently takes Brisbane vendors an average of 91 days to sell property compared to 49 days in March 2003;
Vendors are being forced to reduce prices to secure sales, with properties being discounted by an average of 8.2% this year compared to 5.6% during the height of the market in 2003; and
Brisbane in April recorded a 39.8% clearance rate as 100 of the 242 houses auctioned were sold with nine withdrawn and $43.04 million worth of property sold.
According to Mr Christopher: “It is a sign of weakness that it is taking longer to sell properties.

“There was no way the growth could be sustained and in 2004 we were expecting slower growth, which was 7% at the time.”

He says the market would need a boost in employment growth for the property market to recover.

Mr Christopher said employment growth rather than population growth played the key role in Brisbane house prices.

“It is one thing to have a strong population growth but if no one is finding themselves a job there is not going to be higher housing prices.”

Suburbs to watch

According to REIQ, price gains are expected to be maintained in blue ribbon suburbs such as Balmoral, Hamilton, Chelmer, Bulimba, Bridgeman Downs and St Lucia as well as more affordable locales such as Carole Park, Durack, Forest Lake, Runcorn and Taigum.
 
Doons said:
:) Spotlight on Brisbane


Suburbs to watch

According to REIQ, price gains are expected to be maintained in blue ribbon suburbs such as Balmoral, Hamilton, Chelmer, Bulimba, Bridgeman Downs and St Lucia as well as more affordable locales such as Carole Park, Durack, Forest Lake, Runcorn and Taigum.


I am quite surprised by this list. Especsially durack and carole Park ........Any comments ?
Perhaps I have been out of the country too long
 
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