Brisbane houses top QBE price growth forecast, but units tipped to fall: QBE Housing Outlook 2016-19

Brisbane houses top QBE price growth forecast, but units tipped to fall: QBE Housing Outlook 2016-19
Brisbane houses top QBE price growth forecast, but units tipped to fall: QBE Housing Outlook 2016-19

Tighter lending to investors is tipped to soften the Australian residential property market during the next three years, improving affordability and creating opportunities for owner occupiers, according to QBE’s Housing Outlook 2016-19.

The QBE commissioned BIS Shrapnel report, now in its 15th year, is an annual overview of the Australian housing market and forecast movements.

Brisbane is forecast to experience the highest house price growth of the three largest capital cities to June 2019, while Brisbane unit prices are expected to fall by a cumulative 8.2 percent in the same period.

Sydney house prices are tipped to remain flat in the period to June 2019, while unit prices are forecast to fall 6.8 percent cumulatively during the next three years.

Melbourne house and unit prices are forecast to decline, with units expected to decline by a total of 9 percent to June 2019, according to the report.

Nationally, slowing rental and price growth is likely to contain investor appetite for residential property, and recent tightening in bank lending policy towards overseas investors will also slow overall investor demand, the QBE Housing Outlook finds.

QBE Lenders’ mortgage insurance chief executive officer Phil White said it was a fascinating time to be looking at the Australian residential property and mortgage market. 

“Prices are forecast to soften through the three years to 2019, which is likely to be positive for housing affordability.”

Fewer investors are now entering the market due to banks tightening lending criteria. In 2015/16 investors accounted for 44 percent of all residential loans, compared to 51 percent in 2014/15, according to the report.

“It’s expected owner occupiers, including first home buyers, will be stepping in to pick up some of this opportunity in the market.”

Phil White said meeting the long-term demand for housing with the limited availability of land in most of our capital cities, will remain a significant challenge for State and Territory governments and underpin long-term property prices.


Sydney's median house price reached $1.048m at June 2016 and is forecast to rise by 1.7 percent to $1.065m by mid-2017 before decreasing to $1.055m by June 2018 and $1.050m by June 2019, resulting in median house price growth being effectively flat by the end of the forecast period.

Price growth in the Sydney unit market has been below that of the house market. Sydney’s median unit price rose by an estimated 41 percent in the four years to June 2016. However, price growth has already started to flatten with the median unit price growing by just 3 percent in 2015/16.

Sydney’s median unit price growth is forecast to fall 1.8 percent in 2016/17 and cumulatively by 6.8 percent during the three years to June 2019 to a median unit price of $680,000.


The underlying demand and continued growth of the Melbourne house market has been underpinned by a strong population increase, with Victoria recording a net boost of 11,000 people in the year to June 2016. This population growth has continued to maintain a deficiency of dwellings in the Melbourne market despite continued growth in new dwelling supply.

Melbourne will see dwelling completions peak in 2016/17. Short term population growth is expected to ease and a 0.6 percent price decline in the median house price is forecast for the period ending 2018/19.

Record levels of unit completions and a strong project pipeline are expected to affect Melbourne’s median unit price, which is forecast to decline by a total of 9 percent to June 2019.


Moderate house price growth in Brisbane during the past four years is in line with Queensland’s challenging economic conditions. Without strong employment drivers, Queensland is not expected to be able to capitalise on Brisbane’s affordability advantage over Sydney and Melbourne.

Nevertheless, an overall dwelling deficiency should help to support Brisbane’s median house price that is forecast to rise by 6.5 percent to June 2019, the highest price growth during this period of the three largest capitals.


After peaking in December 2014, Perth’s median house price declined by 5.6 percent in the eighteen months to June 2016. Mining investment is now greatly reduced and economic conditions have weakened. Perth’s median house price is forecast to decline by 3 percent to June 2018 while the forecast median house price at June 2019 is expected to be 10% below its 2014 peak.

Overall, the Perth market is expected to weaken across both housing and unit markets. The median unit price was down by 6.5 percent to June 2016 with further declines totalling 6 percent forecast in 2016/17 and 2017/18 before prices decrease further to June 2019.


The median house price in Adelaide is forecast for limited growth of around 0.9 percent in 2017/18 and an overall decline of 1.3 percent is forecast by June 2019. Adelaide’s unit and apartment market is expected to remain relatively flat during the next three years declining a total of 0.6 percent to June 2019, moving in line with the forecast for house prices.


Hobart’s median house price is forecast to rise around 4% per annum or at a cumulative rate of 12.5 percent by June 2019. With investor activity declining, the softness in the unit market is expected to continue to dampen demand, limiting median unit price growth to between 1 percent and 2 percent per annum through to 2018/19.


Darwin’s median house price is forecast to decline by 6.3 percent by June 2019. Median unit prices are expected to decline by 4 percent in 2016/17 followed by further declines of 4 percent and 2 percent in subsequent years to take the median unit price 10% lower by June 2019.


Canberra’s median house price is forecast to rise by 3.5 percent in 2016/17 with a further growth of 2.4 percent and 2.3 percent in the two years to June 2019. In contrast, the median unit price fell 2.6 percent in 2016 and a further downside of 4 percent is forecast in 2016/17 and 2018/19 by which time the dwelling supply is expected to peak and be absorbed by June 2019.

Housing Market Residential Property

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