This week the CoreLogic RP Data Property Market Indicator Report showed Brisbane as continuing to experience small gains in the auction clearance rate, up from 46% last year to 53.2% this month. It’s one indicator that the market is picking up, but by no means does it suggest you should be considering an auction in the outer suburbs of Brisbane even if the agent is urging you on. Auctions work best for unusual or high end properties, or those where demand is sufficient to have multiple offers on almost all properties.
In contrast with Brisbane, Sydney’s auction clearance fell from 72% last year to 67% this month, confirming Sydney’s bubble is at least no longer growing, although there are no signs it has burst as yet.
In terms of price changes, Brisbane has experienced an annual change of 4.4%, compared to Sydney’s 16.3%. So Brisbane is still growing slowly, and the demand from buyers in the middle price brackets has dropped off a little with the state of the Queensland economy.
Properties on the market has declined in Brisbane, by 6.2% since last year. I believe there are two reasons for this – firstly, buyers have been highly active in the past few months, and have bought many of the properties on the market. And existing owners are saying they are reluctant to list their properties because they don’t know where they can go next. Blocks of land to build are scarce, and apartments only suit a select few, and the build rate of apartments is still lagging demand.
Government needs to reduce taxes on developing land, so more land can be opened up for building, and rules on infill housing need to be made more flexible to allow, for example, more dual occupancy. We also need to reduce transfer taxes, to cut the cost of buying and selling for people.
The APRA changes to bank lending have reduced the number of investors in the market, but it is too early to quantify by how much, or to tell whether this is a long-term trend and whether it will impact on unit prices.