Brisbane faces challenges, as John McGrath warns of apartments sitting on the shelf
Brisbane's property market still faces challenges, estate agent John McGrath acknowledges.
His latest research showed price growth did slow to just 4% along the Brisbane to Gold Coast corridor for the financial year.
"The reasons behind this include the lowest net interstate migration in more than two decades; a weak state economy; comparatively high unemployment; and the change of government," he said.
"At a macro level, there’s obviously been challenges.
But he told his Switzer blog readers that drilling down though, some areas are experiencing exciting activity.
Low interest rates were encouraging upgraders in the $1 million-plus bracket in premium areas such as Ascot, Hawthorne, New Farm, Bulimba and Paddington.
"Many are choosing to keep their existing homes in the $500,000 to $1 million bracket for investment.
"First home buyers are also back, buying in affordable suburbs like Mansfield, SALISBURY and Belmont where homes are selling faster than anywhere else in Brisbane," he said.
Solid demand and a shortage of homes for sale in some areas pushed Brisbane’s auction clearance rate to its highest level on record (since 2009) at 50% for the year to August.
By comparison, over the same period of the year, Brisbane recorded 46% in 2014, 40% in 2013, 33% in 2012 and 24% in 2011.
McGrath expressed concerns about some Brisbane apartment markets.
"Apartments are a different story, with a rising oversupply in inner city areas like West End, Fortitude Valley, Newstead and Hamilton.
"Buyers are very discerning and only competing for properties with unique features.
"Downsizers are snapping up three bedroom properties but the smaller non-descript options are sitting on the shelf.
He suggested typically, an increasing house price gap between Brisbane and Sydney was pivotal in creating new market energy.
"By August 2015, the gap was $431,500 – the largest gap in dollar terms on record with Sydney house prices 88% higher than Brisbane, according to CoreLogicRP Data.
"As a result, we are now seeing a steady flow of Sydney and Melbourne buyers heading north.
"Southern investors are chasing capital growth and the highest yields of the major capital cities, while young families are seeking affordability and lifestyle."
He said owner-occupiers purchasing Queenslander-style family homes in blue chip areas are paying half what they would in Sydney for an equivalent home.
"Many are leasing these properties for decent yields while they look to secure work before moving here permanently."