Brisbane Apartment Rents Fall

According to RP Data, rents for Brisbane apartments decreased by 1.5% over the past quarter.  From what I can tell, it is harder for landlords in Brisbane to find tenants, and rents are decreasing.

Apartments as smart choice

RP Data has published a report comparing apartment prices to house prices in certain suburbs.  In my view, it is not particularly helpful.  For example, it compares houses in Chelmer (which are generally high quality houses on large blocks) with units in Chelmer (which are all 6 pack developments, mostly on a main road -- in fact, there are hardly any units in Chelmer).  Not a like for like comparison in my view, even in respect of location.

RP Data Weekly Report

RP Data has a weekly property report, that can be interesting reading.  Note that some of the information for Brisbane includes the Gold Coast.  This weeks report is here.

RP Data sales report

Over the 2012/13 financial year, RP Data estimates that there were 328,903 houses and 122,282 units sold across the country. Based on these figures, sales volumes over the year were 13.1% higher for houses and 6.4% higher for units. The data indicates that at a national level the vast majority of transactions were for detached houses, at 72.9% of all sales.

Brisbane – house sales rose 20.9% over the year with Brisbane recording 14.8% of all capital city house sales. The lift in unit sales was more moderate at just 7.4% and unit sales across the city accounted for 13.5% of all capital city sales.

Full Report Here

Hilton Gold Coast Capital Losses

"According to RP Data, since January last year 66 apartments have sold in the Boulevard Tower, with resales making up a small proportion of the total.  

Unit 10504 was bought off the plan for $850,000 in February 2008 and sold on May 30 this year for just $505,000, a 40.5 per cent drop in value.  In July this year, unit 10607 sold for $435,000, a 32 per cent dip in price from January 2011 when a buyer paid $647,000.  A unit on the 21st floor was purchased for $910,000 in January 2008 and sold in November last year for just $525,000."

See Courier Mail

An agent is quoted as saying losses of 30% on the Gold Coast are not unusual.  Take care when buying!

Brisbane improves in August?

Brisbane median sales prices increased in August, but are still down looking back one year.

From RP Data:

According to Mr Lawless, the most significant turnaround in market conditions can be found in Brisbane where the monthly rate of growth jumped to 1.5 per cent.

“Brisbane’s housing market has been underperforming since the onset of the GFC with home values still almost 10 per cent lower than their previous peak which was back in November 2009. The strong result for August was evident across both the detached housing and the unit markets and may potentially mark a positive turning point for Brisbane’s housing market.”

Brisbane apartment prices (to 31 August 2013):

August 2013 - up 1.2%

Quarter - down 0.6%
Year on Year - down 1.2%
Year to Date - up 0.5%
Median price based on settled sales of Brisbane apartments over the quarter - $369,250.

Cheapest Units within 10 km of Brisbane downtown

RP Data released a report today, showing the suburbs with the lowest median price for units within 10km of Brisbane's city centre.  The results are here and here.  The three cheapest suburbs were:

• Chelmer
• Zillmere
• Kedron

Vendor activity steady

Property owners in Australia do not appear to be rushing to sell, according to RP Data.

Brisbane Units Still Going Backwards

According to RP Data, Brisbane apartment values are still declining.  From an RP Data release:

"RP Data and Rismark International today released its July housing market results which shows that capital city dwelling values increased by 1.6 per cent over the month of July after posting a solid 1.9 per cent capital gain in June. These latest monthly results now takes the cumulative recovery to 6.5 per cent since dwelling values found their trough at the end of May last year.

The July results also take the rolling quarterly change in capital city dwelling values to +2.3 per cent over the three months ending July and values are 4.9 per cent higher over the past twelve months.

According to RP Data research director Tim Lawless, despite the strong headline, the market remains somewhat of a mixed bag.

“The housing market is being buoyed by very positive conditions in Sydney, Perth and to a lesser extent Melbourne, with residential values in these cities now 3.7 per cent, 4.4 per cent and 2.4 per cent respectively higher over the past three months alone. At the other end of the scale you have cities like Adelaide, Brisbane and more recently Darwin where conditions are more sedate with dwelling values slipping lower over the past quarter.” 

Brisbane apartment prices (to 31 July 2013):
July 2013 - down 0.5%

Quarter - down 3.5%
Year on Year - down 0.3%
Year to Date - down 0.7%
Median price based on settled sales of Brisbane apartments over the quarter - $373,500.

Brisbane Property Prices Flat in FY12/13

Over the 2012/13 financial year, Brisbane had a 0.6% increase in property values, according to RP Data.  This is less than inflation.   And below the Australian capitals average.  Not a good result, but better than going backwards.

Will Brisbane Apartment prices go up or down?

Brisbane apartment prices did worse that Brisbane house prices over the past financial year.  There was a fall of 1.8% in Brisbane apartment prices in 2012/13.  The number of apartment sales are 13% low than 12 months ago.  This does not sound like a booming or healthy real estate market.  Some predict that apartment prices will slowly deflate, year on year, for a number of years to come.  Others predict that with low interest rates and good population growth, then prices will start to increase.  RP Data says that Brisbane will be flat for the next year.  If that is the case, no rush to buy or to sell.  Not good news for real estate agents, who rely on sales volumes to make a living.

Capital City Home Values

Capital city home values are up or down, depending on which RP Data chart you look at.

I bet no real estate agent in Brisbane will be distributing this RP Data chart.  Brisbane is more than 10% below the most recent peak, and has been a poor property performer.

Brisbane Property Prices

RP Data reports that Brisbane property prices are increasing, but looking back five years, the annual change in capital values is still negative.  That means, on average, a person who purchased five years ago has made a capital loss in Brisbane.

A Declining Market

For the month of May, dwelling values declined by -1.2 per cent across the RP Data-Rismark combined capital city index. The May fall was the second consecutive month-on-month decline, with values down -0.5 per cent in April following a 2.8 per cent rise in values over the first quarter of the year.

"Given the weak housing markets of 2011 and 2012 were followed by a very robust 2013 first quarter, we may well be seeing some natural market volatility associated with vendors acquiescing and taking the opportunity to sell."

Brisbane apartment prices (to 31 May 2013):

May 2013 - down 1.7%

Quarter - down 0.4%
Year on Year - up 1.5%
Year to Date - up 1.1%

Median price based on settled sales of Brisbane apartments over the quarter - $375,000.

With a number of businesses in Brisbane continuing to make employees redundant, or implementing a wage and hiring freeze, it is hard to see things getting better in Brisbane any time soon.

Buyer's Market says RP Data

"The survey was conducted across 1,030 respondents who were located across the capital city and ‘rest of state’ regions around the country.  The headline findings showed 80% of Australians think it’s a good time to buy a home but only 37% think it’s a good time to sell.  The results suggest, at least from a consumer perspective, that housing remains a buyers market."

See RP Data Blog

"There has been clear evidence of weaker housing market conditions over the second quarter of 2013. The housing market is highly seasonal and we anticipated a slowing of conditions over the current period however, it is likely that the magnitude of the slowdown and subsequent value falls has been heightened by falling consumer sentiment. Should this continue, it is reasonable to anticipate a less active housing market where value growth is lower than when confidence was much more buoyant."

See RP Data Report

Investors Returning to the Market?

"With lower interest rates and home value growth remaining moderate we would expect that the basis point spread between official interest rates and gross rental yields on houses to increase further over the coming months which would subsequently make investing in housing potentially even more attractive for those investors focussed on yield."

See Why Are Investors Returning to the Housing Market?

Brisbane Under-performs

Recent charts from RP Data show that Brisbane is under performing compared to the other Australian capital cities.  Does this mean that a boom is coming for Brisbane houses and apartments?  Interest rates are currently low, but long term, there is a significant risk of inflation.  So what does that mean for Brisbane apartment prices?

RP Data April Index Report

Capital city home values fell by 0.5% in April however, they have increased by 2.3% so far in 2013

Capital city dwelling values increased fell -0.5% in April and on an annual basis, they have now increased by 2.7%.   Home values fell in April across every capital city except for Adelaide (2.8%) and Darwin (0.2%).  Over the three months to April 2013, home values increased by 1.1% across the combined capital cities with every capital city except Brisbane (-0.9%), Perth (0.0%) and Hobart (-1.6%) recording value growth, the largest of which occurred in Darwin (5.0%).  Home values remain -3.6% below their historic highs across the combined capitals with falls from the peak ranging from -11.5% in Hobart to Sydney where values are -0.4% lower than their previous peak.  Looking at value movements across broad price segments in the market to March 2013, the broad ‘middle market’ has been the strongest sector with values increasing by 1.9% over the year and the most expensive and most affordable suburbs have each recorded value increases of 0.8%.

Annual sales activity is higher than it was a year ago and trending higher

Estimated sales volumes for  the 12 months to February 2013 were -10.8% below the five year average nationally.   Compared to volumes over the 12 months to February 2012, sales volumes are 2.1% higher.  Sales activity has increased by 1.2% over the most recent six months compared to the previous six months.

Rents continue to edge higher across the combined capital cities however, value growth has been stronger than rental growth over the past quarter

Capital city unit rents have increased by 3% over the 12 months to April 2013.  Gross rental yields for units have remained at 4.9% over the year.

Time on Market in Brisbane

Brisbane still has a very high "time on market" for apartments.  On average, 80 days to sell from first listing.  This is about double what it should be, and shows that the market is still stuggling.  Chart from RP Data.