Low interest rates and improved levels of buyer confidence are helping drive more activity in south-east Queensland’s residential property market, new data from CBRE shows.
According to the Australian Residential MarketView Q1, 2013 report, south-east Queensland’s property sector has transitioned towards a growth cycle, with the state’s population rebound, low interest rates and renewed levels of investor activity underpinning a boost in property sales.
During the 12 months to March 2013, house sales in Brisbane spiked 12.6%, while units experienced an 18.0% surge over the same time period.
CBRE Senior Research Manager Sam Reilly said while sales volumes were gradually recovering in south-east Queensland, this was unlikely to translate into any significant capital value growth in the immediate term.
“Despite an improvement in buyer activity, uncertain employment prospects outside of the state’s resources sector continue to inhibit any major recovery in house prices,” Mr Reilly explained.
“What is clear however is that capital values have stabilised following a period of sustained decline over the past few years.”
During the 12 months to March, Brisbane house prices increased 0.7% to $431,500, while unit values fell flat during the same time period, dipping 1.8% to $343,500.
Despite the drop in unit prices, rental growth has continued to improve, with rents up 1.4% to $370 per week in March.
CBRE Director of Residential Valuations Tom Edwards said improving yields had helped attract more demand from investors– contributing to the rise in property sales over the past 12 months.
House rents jumped 3.7% over the 12 months to March, bringing yields to 5.1%, while unit yields increased to 5.6% over the same period.
“With property prices still relatively low and interest rates at record lows, investors are taking advantage of Brisbane’s current market and its attractive yields,” Mr Edwards said.
The rise in investor activity has assisted to fill the gap left by first-home-buyers, who continue to distance themselves from the Brisbane property market.
First-home-buyer activity has been decreasing rapidly in Queensland, with the state government’s decision to abolish the $7,000 grant First Home Owner’s grant for existing homes contributing to this. First-time-buyers accounted for just 10.4% of all homes financed in February, which is the lowest level recorded for at least the past decade.
The Gold Coast residential sector is also showing signs of improved buyer activity, albeit the market is moving from a lower base following a sustained downturn.
“Investor appetite is increasing for Gold Coast real estate, with buyers active in the waterfront home market, where prices are sitting at historical lows,” Mr Edwards said.
Properties in the $1 million and above price range have recorded a lift in sale volumes, while values remain subdued and often below replacement cost.
Sunshine Coast real estate priced up to $1 million has also enjoyed a boost in transaction activity, with this expected to continue into Q2 of 2013.