Chief Economist at the Macro Investor Leith van Onselen shared his 12-month price forecasts for Australia’s capital city housing markets based on consideration of key price drivers: housing finance; housing supply; affordability; and the macroeconomic outlook.
Brisbane: -2% to 2%
Brisbane’s recent price performance has been poor, declining by 12.4 per cent (houses) and 10.8 per cent (units) since peak as at May 2012, according to RP Data-Rismark. However, investment fundamentals are improving, which should result in above-average performance over the coming 12 months, with prices forecast to shift by between minus-2 per cent and 2 per cent.
Brisbane home prices are relatively affordable, with its ratio of house prices-to-incomes the second lowest out of the major capitals and its home prices compared to rents the lowest, suggesting that buying is relatively attractive compared with renting.
Housing supply in Brisbane is tightening, with dwelling construction rates running below average and the number of homes for sale some 8 per cent below last year’s levels (albeit still elevated). Rental vacancy rates in Brisbane also remain tight relative to both the national average and last year’s levels.