While Sydney still holds the current title for strongest year-on-year growth on CoreLogic’s Capital City Dwelling Index (October 31, 2016), Brisbane has overtaken both Sydney and Melbourne for growth in houses and units last month. Darwin bucked the trend to have the strongest growth across both dwelling types for the month, but the safe bet is on SEQ to surge ahead over the next year to be the strongest growing market in 2017.
While SEQ (Brisbane, the Gold and Sunshine Coasts) will see positive growth exceeding most other locations, growth is unlikely to become an official ‘boom’ as a number of economic factors continue to hold the region back from double-digit levels. The uncertainty about the local and global economy are holding many buyers back from committing. No one is really sure how Donald Trump’s rise to power will affect the world – and we may not know for some time. Although he has already softened his approach which indicates his campaign outbursts may have just been marketing strategies rather than policy promises. We can only hope.
Domestically, there is talk of a lower cash rate this coming year, but without banks passing on the full rate cut, this is having less effect on the housing market than hoped. The government’s tightening of the rules for foreign buyers is also holding markets back, although Brisbane is not subject to the same international spotlight as Sydney or Melbourne.
With all things considered, Brisbane is likely to be the best performing market over 2017 as Sydney tapers off rapidly and Melbourne slows down over the first half of the year. Strong population growth, particularly from overseas, as well as record infrastructure spending continue to push Melbourne’s property market forward albeit at a slower pace over the short term.
The oversupply of Brisbane’s unit market has been talked about ad nauseam for the past few months. However, it still managed to show 1% growth last month according to CoreLogic. Inner city apartment prices may be experiencing some softening but other areas are still performing well, particularly quality projects near transport infrastructure and amenities. The detached housing market is performing pretty well on a more broad level with 1.1% growth across Brisbane/Gold Coast markets last month. Quality estates close to transport and schools will do well, as will infill developments and renovation projects in good locations.
So why not treat yourself to one of our SEQ Regional Reports for Christmas? We can bet there will be nothing else in your stocking that will make you more money next year!
All the best for the Christmas holidays.
Until 2017, Josh Green