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Brisbane is one of the few cities that are bucking the overall downtrend in home prices, but will it continue to thrive despite the hikes in interest rates?<\/p>\n
PRD Real Estate chief economist Dr Diaswati Mardiasmo said historical analysis shows that the Brisbane market kept going on a growth trajectory, despite cash rate changes.<\/p>\n
\u201cIt certainly survived the February 2000 50bps cash rate increase,\u201d she said.<\/p>\n
The median house price in the Brisbane LGA was $164,000 in 1999, with a cash rate of 4.75%. Even with the hikes in 2000 that brought the cash rate to 5.75%, the median house price still increased to $175,000 and continued to do so in 2001 where it reached $197,000.<\/p>\n
\u201cThe next cash rate increase was in May 2006, but only by 25bps \u2014 this time again, Brisbane LGA median house price thrived,\u201d Dr Mardiasmo said.<\/p>\n
\u201cBrisbane median house price was $367,000 in 2005, with a cash rate 5.25%. It raised to $388,175 in 2006, with a cash rate of 5.50% and and increased to $460,000 in 2007, with a cash rate of 6.25%.\u201d<\/p>\n
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However, there was a period when Brisbane median prices dipped \u2014 between 2010 and 2011, median prices in the city declined slightly from $545,000 to $520,000, when the cash rate increased from 3.75% to 4.75%.<\/p>\n
\u00a0\u201cIt is important to note that the increase in price prior to 2010 cash rate changes was not as steep as now, and back then we did not have the deep imbalance between demand and supply,\u201d Dr Mardiasmo said.<\/p>\n
\u201cIf we are being cautious, taking in the 2010-2011 experience, we may see a very slight softening in the market, followed by a levelling, before picking up steam again.\u201d<\/p>\n
Still, Dr Mardiasmo believes the Brisbane housing market would still be able maintain its strong position, allowing it to provide a good balanced opportunity for both buyers and sellers.<\/p>\n
One key factor that would support growth in Brisbane house prices are the opening of the international borders.<\/p>\n
\u201cI just saw the number of international students arriving in Queensland, which is mostly in Brisbane, for March 2022 \u2014 we are up from 30 students in March 2021 to 4,190 students in March 2022,\u201d she said.<\/p>\n
\u201cNo wonder our property market will continue to grow. And that\u2019s just the international students category \u2013 there are other international arrivals as well.\u201d<\/p>\n
Figures from the Real Estate Institute of Queensland (REIQ) showed median price gains of 3.23% for houses and 2.17% for units over the first quarter of the year.<\/p>\n
REIQ CEO Antonia Mercorella said houses in Brisbane LGA had a median price of $1.09m over the quarter.<\/p>\n
\u201cWhile this may be sombre news for some, this still represents relative affordability compared to southern states, and arguably our capital city has been long overdue for its time in the sun after years of steady, but modest, growth,\u201d Ms Mercorella said.<\/p>\n
\u201cWhat’s pleasing about the latest results is that, again, it’s not just our capital city performing – our regional centre property markets and communities also continue to benefit from a growth uplift.\u201d<\/p>\n