While Sydney’s and Melbourne’s property markets are sliding into the red, Queensland’s continues to rise on the back of strong interstate demand.
PropTrack’s Potential Buyers Index, which measures the number of people seriously interested in buying, shows that demand nationally has been trending down since March:
But an analysis of the SA3 regions with the largest annual growth in quarterly potential buyers reveals that interest in Queensland homes skyrocketed over the past 12 months
Westpac’s latest Housing Pulse also shows ongoing strong (albeit cooling) demand for Queensland property:
Queensland: from red hot to hot
Qld’s housing market is showing signs of cooling after posting a big surge in 2021 that was still driving strong price gains in the first few months of 2022. Turnover has come off but is still high by historical standards. Price momentum has moderated, albeit coming from red hot to just hot with gains still tracking a double–digit annualised growth rate. However, sentiment is showing a clearer turn lower. That said, a super tight supply–demand balance should continue to provide underlying support.
Turnover has declined 20% since the start of the year, but remains high overall, equivalent to over 6% of the total dwelling stock transacting on an annual basis (the other major eastern states are closer to 4–4.5%, the difference partly reflecting lower stamp duties in Qld).
Price momentum has been surprisingly strong year to date, averaging 2%mth from Jan to Apr. However, May is shaping as an abrupt cooling, daily measures pointing to a much more subdued 0.3% gain in the month. Even with this, annual price growth is set to hold at a rollicking 27%yr.
The detail shows a tentative cooling centred on houses and ‘top tier’ properties, which have led the recent gains. Growth momentum has dropped to a single–digit annual pace for Brisbane’s West and inner city but remains stronger for outer suburbs and the Gold and Sunshine Coasts. The regions have seen much milder gains over the latest cycle.
The supply–demand balance remains extremely tight in Brisbane for both houses and units with little sign of reprieve. Indeed, rental vacancy rates point to more pressures, dropping through 1% in Brisbane.
Queensland dwelling values have risen more than 40% over the pandemic. Buyer demand remains strong, but is clearly fading on the back of eroding affordability and rising interest rates.
I give Queensland around six months before prices begin to fall there as well. Soaring interest rates will sink all housing boats.