Katherine Feeney, Brisbane times urban affairs reporter and blogger, has reported that with median house prices being on the rise, the property market is set to recover.
Median house prices in Brisbane have recorded their first annual increase in over two years, according to a major report heralding signs of market recovery.
Buying affordability has also improved, with the estimated median peak house price of $440,000 still four per cent lower than the previous high in 2010 and the best level since 2003.
But the healthy buying conditions have been fostered by less salubrious factors, such as the conclusion of the mining boom and a housing deficiency that is putting upward pressure on rents.
The trends are captured in the Residential Property Prospects, 2013 to 2016, released Monday by economic forecasters BIS Shrapnel.
According to study author Angie Zigomanis, the local market is only just beginning to recover from a period of negative demand brought about by a run up in house prices and construction induced by first resources boom.
Weak migration and population growth since 2009 prevented any excess supply being absorbed, Mr Zigomanis said, with peak state economic conditions also dampening down sentiment.
“While the pieces are now falling into place for the beginning of an upturn in the Brisbane market, confidence remains weak,” he said.
“However, similar to the Perth market, once it appears that the market has definitely bottomed, turnover will begin to increase as purchasers seek enter the market ahead of any further price rises in increasing numbers.
“As a result, we should start to see a return of price growth in 2013/14, which will accelerate into 2014/15 and remain solid in 2015/16 as more first home buyers and investors start buying.
The improvement was also spurred by a low interest rate environment with official cash rate down by 200 basis points since October 2011, translating to a 160 basis point fall in variable rates.
“The current standard variable rate of 6.2 per cent is the lowest level since 200 – outside of the GFC-induced low interest rates in 2009,” Mr Zigomanis said.
“Also, outside of 2009, home loan affordability in all capital cities is at its best level since the first half of the 2000s.”
Story originally published on Brisbane Times July 1 2013.