Brisbane apartment market forecast to see stronger price growth in 2019: Moody's Analytics

Brisbane apartment market forecast to see stronger price growth in 2019: Moody's Analytics
Brisbane apartment market forecast to see stronger price growth in 2019: Moody's Analytics

Queensland’s 2019 housing market is expected to vary across the state, largely because of its diverse economy, according to Moody's Analytics latest report.

The report noted that the Brisbane area has seen its strongest growth since the lull in 2012, thanks mostly to improved activity in the services sector.

The outlook for Queensland's housing markets is for either flat or mildly positive returns over the next two years.

Brisbane apartment market forecast to see stronger price growth in 2019: Moody's Analytics

The authors noted, "although Brisbane home values rose steadily through 2017 and 2018, the apartment market has been more subdued."

"A runup in supply over the past few years has capped gains in the apartment market."

"However, supply has tightened since its peak; the latest data suggest apartment building approvals have fallen from their 2013 levels."

"Therefore, a reduced apartment glut will likely usher in a broad-based recovery in apartment values from 2019 onward," according to the report authors.

Brisbane apartment market forecast to see stronger price growth in 2019: Moody's Analytics

The contrast between home and apartment values is most apparent in Brisbane Inner City (comprising South Brisbane, Ascot and Grange).

Moody’s Analytics forecasts home values to underperform throughout the forecast period, while apartment values are expected to accelerate.

This is a reversal of trend from the past few years; home values had risen more than 30% since mid-2012, while apartment values had risen only around 5%.

 Brisbane apartment market forecast to see stronger price growth in 2019: Moody's Analytics

(Source: Moody's Analytics, CoreLogic)

Apartments in Greater Brisbane are forecast to grow 2.8 percent overall in 2019 with every region seeing growth, ranging from 2.7% to 7.6%, after falling -3.1 and -0.9 percent in prior years.

Moreton Bay, Logan and Ipswich are projected by Moody's Analytics to be the three largest growth areas for apartments with a forecast growth over 2019 and 2020 ranging from 13.5% in Ipswich to 18.6% in Moreton Bay - North over the next two year. 

Brisbane North and South as well as the Inner City Brisbane region are expected to see medium to high growth with Inner City region expecting growth of 7.3%.

However Brisbane East and the Inner City region are expected to see a slowdown in 2020 with both areas still forecast to grow.

The second housing sector comprising more “lifestyle” areas, including Sunshine Coast, Wide Bay and Cairns, are expected to perform better over the forecast period, as income growth remains robust and the degree of supply increase is not as great as in areas of Brisbane.

Lifestyle areas are also buoyed by overseas tourist demand, which has remained strong on the back of the falling Australian dollar.

Moody’s Analytics forecasts home values to underperform throughout the forecast period, while apartment values are expected to accelerate.

Brisbane apartment market forecast to see stronger price growth in 2019: Moody's Analytics

The third housing market region in Queensland comprises commodity-producing areas.

These include Central Queensland, Mackay-Isaac-Whitsunday, and Darling Downs-Maranoa.

The report authors note, "values have declined significantly here over the past few years, partly as a result of the end of the mining boom."

"The recent uptick in commodity prices is unlikely to provide a tailwind, with housing values expected to correct further through 2019."

"A lack of job opportunities will subdue population growth, lowering equilibrium home values," the authors concluded.

Brisbane apartment market forecast to see stronger price growth in 2019: Moody's Analytics

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Brisbane 2019 Property Price Forecast

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