South-east Queensland housing market recovering, with sub-$500,000 sweet spot: CBRE

The south-east Queensland property market is edging towards recovery, led by increased sales activity for properties priced below $500,000, according to CBRE. 

However the Gold Coast market remains among the most under pressure markets in the country. 

In its 2012 first quarter report CBRE notes that the Brisbane market is showing more stability than the coastal markets and says “multiple offers” are now being lodged for properties in the sub-$500,000 price bracket. 

The report notes that the Gold Coast and Sunshine Coast markets have not yet stabilized, with the Gold Coast remaining among the worst-performing residential markets in Australia from both a capital growth and sales volume perspective.

It notes that the Gold Coast suburbs of Beenleigh, Southport (both down 10.6% to medians of $441 and $399,000 respectively), and Surfers Paradise (down 9.1% to $520,000) have had the greatest median price falls over the past 12 months. 

Across the Gold Coast prices are down 11.4% to $324,000. 

In comparison property prices in Noosa on the Sunshine Coast have fallen by a more modest 5.2% to $432,000, though the report notes a larger number of mortgagee-in-possession sales. 

The outlook for the Gold Coast is not all gloomy, with CBRE noting an increase in buyer activity in the sub-$500,000 market as well. 

The report notes a pick-up in first-home buyer activity as a result of discounted pricing as possibly also as a result of the $10,000 building boost on offer from the state government until the end of April. 

Report co-author and associate director of global research at CBRE Sam Reilly says the pick-up in sales combined with a solid rental market and strong economic forecasts for the state suggest a strong turnaround is looming for property in the long term. 

However, the upper end of the market from $1 million to $2 million continues to struggle, a “wait and see” mood prevailing amongst investors. 

This is the case both in Brisbane and on the coastal markets. 

The report notes that the Sunshine Coast has not felt the same kind of pricing pressures as the Gold Coast and has seen a high level of buyer interest in its prestige sector as vendors finally adjusted their price expectations. 

According to CBRE mortgage valuations regional director and report co-author Tom Edwards, the biggest concern is the prestige sector in all cities. 

“Few sales are taking place and transactions that are completing are generally distressed sellers. For property between $1 million and $2 million, there has been a further slowing with price levels showing substantial discounts,” he says. 

As a result, vendors in this price bracket are choosing to renovate rather than try and sell at a reduced price. 

Reilly says sales activity for the remainder of 2012 is likely to be dictated by the confidence of the market. 

“Upward pressure on interest rates as well as the ongoing negative exposure from the eurozone issues may dictate the short term market direction, however a strong turnaround is looming” he says.