Thursday, April 28, 2011

Brisbane Not Cataclysmic After Floods

Brisbane house prices are the lowest of any mainland capital with January's floods and a struggling state economy blamed for a 2 per cent fall in the median price over the March quarter. But analysts believe the fall is a good result compared with "cataclysmic" predictions for the city's property market in the aftermath of the natural disaster.

According to Australian Property Monitors' March Quarterly House Price Report, the Queensland capital overtook Adelaide as the most affordable mainland city with the median house price standing at $448,669, a 4.3 per cent annual drop. Brisbane unit prices remained the second cheapest in the country at $354,089, well ahead of Adelaide ($296,939).

Andrew Wilson, a senior economist from Australian Property Monitors, said the fall in median house prices from a mark of $457,889 in the December quarter was only marginal compared to some analysts' post-flood predictions.

Dr Wilson said declines of up to 15 per cent and 20 per cent for the city had been predicted.

"There were suggestions people would be reluctant to live in areas which were subject to that sort of extreme climate outcome in the future," Dr Wilson said.

"History does show us that people are very resilient, they are very attached to their neighbourhoods and governments take action to mitigate against this happening again.

"I think a two per cent fall over the quarter is a very good result considering that it will be the main hit that we get from the floods."

Dr Wilson said Brisbane had suffered from a buyer hesitancy in recent years, reflective of an underperforming Queensland economy reeling from the high dollar affecting tourism and some of the state's mines remaining inoperable.

He said the city's house prices had been going through an adjustment period following the city's strong price growth prior to the global financial crisis and the floods may have put off a stabilisation in prices.

Brisbane Times and SMH

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