Brisbane could be at the bottom of the market: RP Data

The slow in the drop in house prices in Brisbane suggests the market may be close to bottoming out, says RP Data analyst Cameron Kusher.

According to the RP Data-Rismark August Hedonic Index results, Brisbane prices declined by just 0.2% on a seasonally adjusted basis over August, compared with 0.4% fall in July.

“The Brisbane result is encouraging following fairly sizeable monthly falls,” Kusher tells Property Observer. “It suggests Brisbane may be near the bottom of the market.”

Perth prices fell by 2% over August following a 1.1% decline in July – a result that Kusher described as “surprising”

“We thought Perth was getting closer to the bottom,” he says.

Kusher says a possible reason for Perth’s current weakness is that mining activity has not yet filtered down into housing demand, set within the context of declining consumer confidence.

Taking a look at the overall 0.4% decline nationally in house prices, Kusher says it is difficult to read too much into one month of data.

“Houses prices declined 0.6% in July and have declined for the last eight months. Spring will tell a bit more of a story. But I think it will be more of the same for the rest of the year.”

Kusher says a rate cut, currently being forecast by many economists, might increase activity, but won’t necessarily push up prices.

“The real capital gains are some way off. People are first getting to a more comfortable debt situation,” he says.

According to Kusher, a trigger for more people stepping into the housing market could come when rents rise to a level that encourages people to take out a mortgage rather than pay rent.