Could 2020 be the Queensland property market’s best year in a decade?
Home owners and investors in the Scenic Rim were Greater Brisbane’s most profitable during the September quarter according to CoreLogic’s Pain and Gain report.
More than 93 per cent of Scenic Rim homes sold within the quarter made a gross profit, compared with just 89.1 per cent of Brisbane properties.
Moreton Bay came in second for profitability, with 90.8 per cent selling for a gross profit, followed by Redlands with 90.4 per cent.
Brisbane came in second-last for profitability overall, with the Lockyer Valley the only other region to record less than 87 per cent, with gross profit sales of just 82.9 per cent.
Overall, 87.9 per cent of Brisbane sales recorded gross profit over the September quarter, up from 87.2 per cent over the June quarter, but down from 90.8 per cent at the same time one year ago.
According to CoreLogic, the past decade has seen an average 90.7 per cent of Brisbane dwellings selling for a price higher than the purchase price.
The sale trends have been weighed down by a weaker performance across the unit market, the report says, with only 63.5 per cent of unit sales making a gross profit over the quarter.
In comparison, 94.6 per cent of houses resold at a gross profit.
“For houses and apartments, the results in the Pain & Gain Report will be heavily influenced by whether the properties captured in the report where initially purchased prior to 2011 and 2012 or after then,” says Propertyology Head of Research, Simon Pressley.
“Brisbane prices dipped by six per cent during that two-year period, while prices didn’t move at all in 2019,” he said.
The weakness across the unit sector may be starting to shift, according to the CoreLogic home value index, which recorded a 1.8 per cent rise in unit values in the December 2019 quarter, however values remained 10.9 per cent below their 2010 peak at the end of the 2019.
“The last decade was most underwhelming for Brisbane’s property market, producing the third lowest increase in median house price out of eight capital cities,” says Mr Pressley.
“Queensland’s real estate performance mirrors that of the state economy. We are now in the eleventh year of the state unemployment rate being worse than the national average,” he says.
Over the 10 years ending 2019, Greater Brisbane’s median house price increased from $460,000 to $560,000, or 21 per cent, while the previous decade saw the median price skyrocket from $143,000 to $460,000 – a huge 221 per cent.
“There is no comparison,” says Mr Pressley.
“The price of a Brisbane apartment today is the same as 10 years ago, whereas apartments produced 166 per cent growth in the decade ending 2009.
Of the five municipalities that make up Greater-Brisbane, Moreton Bay performed slightly better than the other four councils – Brisbane City, Logan, Ipswich and Redland – but Mr Pressley says the a upward swing may be looming.
“Moving forward, Propertyology believes that there is potential for 2020 to be Brisbane’s best year since 2010, when government stimulus helped drive a 10 per cent calendar year increase in the median house price.”