House price growth in Brisbane seems to have stalled over recent months with the CoreLogic Hedonic Home Value Index for April showing the median monthly house price change in Brisbane at -0.4%. This has created a situation where house prices have flatlined over the year, according to Domain Group’s quarterly house report. Of course, this is a much better outcome than a property price fall, which is what’s playing out across the other major East Coast Capital cities in Australia.

The latest monthly CoreLogic data does show that the dwelling values in many capital cities around the country (Sydney, Melbourne, Perth and Darwin) have shown annual changes in median values between -7% and -10%.

Although we have seen this broad trend, we also note that the rate of decline has been easing which means the decline in home values in these regions seems to have lost momentum over recent months.

Brisbane has shown a decline of just 1.9% in median dwelling values across the last 12 months, although houses have slightly outperformed units in this time according to the CoreLogic Hedonic Home Value monthly report for April 2019. This is a trend that we have been seeing since mid-2012.

Over-supply issues have played heavily on the unit market in Brisbane which is now 9.6% below the mid-2016 peak according to Domain. Although we are now seeing supply slow down, listing volumes are shrinking and a lot of the supply has been absorbed by continued and accelerating population growth.

The apartment market in Brisbane remains weak, although there are reports that both apartment prices and rents will stabilise over the next 12 months. Moody’s Analytics has also tipped that Brisbane’s Apartment market values may recover 0.9% this year.

With all that said, Brisbane still offers stronger immediate capital growth prospects compared to most other capital cities across Australia. Our economy is underpinned by major projects that have been discussed previously. Queensland also recorded the greatest net jobs growth across all states in March 2019.

Additionally, Queensland remains the third most popular destination for overseas migrants and is drawing the highest number of interstate movers, with Brisbane capturing the biggest flow of new residents. And finally, listing volumes are shrinking so there are fewer properties available for sale now than there were 12 months ago.

There are also signs of increased demand, driven by migration in pursuit of a laid-back lifestyle and more affordable living. This is reflected in the decline of the Brisbane vacancy rate. The vacancy rate was 2.6 per cent in January 2019, down from 3.1 per cent in the same month of the previous year. As vacancy rates trend down, and the supply of available rentals tightens, weekly house rents have risen 2.5 per cent in the year to December while unit rents are up 2.7 per cent.

Putting all of these factors into context provides a clear picture of the strong underlying demand for housing in Brisbane from both investors and owner occupiers. Let’s see how things pan out after the up-and-coming Federal election. Whilst there is no historical evidence that an election campaign impacts on property markets, I think given the significant proposed policy changes put forward by the Labor Party that will have an impact on Australian Property .. this time it is very different. Time, of course, will tell.