With sales volumes rising Queensland can expect good price growth: Terry Ryder
Changes in sales volumes are usually a forerunner to changes in prices, both when markets are rising and when they are falling.
On that basis, Queensland can expect good price growth. The state has recorded big changes in the number of house sales over the past 12 months or so.
The REIQ’s market report for the June Quarter shows sales activity in the state improving. House sales statewide rose 22% in the June Quarter, compared to the March Quarter and were 40% higher than the June Quarter of 2012. (We don’t yet have figures for the September Quarter but anecdotal evidence indicates the trend has continued).
“This is the fourth consecutive quarter of positive news,” said REIQ spokesperson Anton Kardash. “The September Quarter last year was a particularly strong one for the Queensland market and that momentum has been sustained in the following three quarters of sales activity.”
The numbers of house sales in Brisbane increased markedly in the June Quarter: up 32% on the March Quarter and up 44% over 12 months. The median house prices in Brisbane City, Logan City, Moreton Region and Redland City all increased in the June Quarter.
In the regions, Toowoomba posted yearly median house price growth of 4.5%, the Gold Coast rose 3.1% and the Sunshine Coast grew 2.3%.
“REIQ estimates of Queensland investor activity also shows that the numbers of investment dwellings financed is tracking at about the historical average,” says Kardash. “No doubt, investors have recognised the strong rental market, including low vacancy rates and are taking the plunge while first home buyers remain relatively absent.”
The Home Value Indexes published by RP Data show that Brisbane’s house price index has risen 1.7% since the start of 2013, lagging some of the other capital cities but nevertheless showing signs of growth. The unit price index has recorded a similar rise.
Most of that rise was in the past three months, confirming the usual pattern whereby prices rises follow increases in sales volumes, but with a lag six to nine months.
Brisbane’s market declined overall in 2011 and 2012, in line with the capital city trend, but with the double whammy brought by the 2011 floods. There has also been impact from the state government’s cost cutting and sacking of large numbers of public servants.
Brisbane is not an auction city so it has not been caught up in the short-term frenzy that periodically afflicts Sydney and Melbourne.
It is, nevertheless, showing signs of a return to price growth – which is inevitable following the significant increase in the number of home sales.
Outside the state capital, we can expect growth in Rockhampton, Townsville and Toowoomba, as well as some of the tourism-based areas that have been poor performers in recent years but are now mounting revivals, headed by Cairns and the Sunshine Coast.
Locations moving in the opposite direction, mostly because of over-supply by developers, include Gladstone, Mackay and Emerald.
Terry Ryder is the founder of hotspotting.com.au and you can contact Terry via email or on Twitter.