Median house prices in Brisbane have recorded their first annual increase in over two years, according to a major report heralding signs of market recovery.
Buying affordability has also improved, with the estimated median peak house price of $440,000 still four per cent lower than the previous high in 2010 and the best level since 2003.
But the healthy buying conditions have been fostered by less salubrious factors, such as the conclusion of the mining boom and a housing deficiency that is putting upward pressure on rents.
Buying affordability has improved in Brisbane, with the estimated median peak house price of $440,000 still four per cent lower than the previous high in 2010.
The trends are captured in the Residential Property Prospects, 2013 to 2016, released Monday by economic forecasters BIS Shrapnel.
According to study author Angie Zigomanis, the local market is only just beginning to recover from a period of negative demand brought about by a run up in house prices and construction induced by first resources boom.
Weak migration and population growth since 2009 prevented any excess supply being absorbed, Mr Zigomanis said, with peak state economic conditions also dampening down sentiment.
“While the pieces are now falling into place for the beginning of an upturn in the Brisbane market, confidence remains weak,” he said.
“However, similar to the Perth market, once it appears that the market has definitely bottomed, turnover will begin to increase as purchasers seek enter the market ahead of any further price rises in increasing numbers.
“As a result, we should start to see a return of price growth in 2013/14, which will accelerate into 2014/15 and remain solid in 2015/16 as more first home buyers and investors start buying.
The improvement was also spurred by a low interest rate environment with official cash rate down by 200 basis points since October 2011, translating to a 160 basis point fall in variable rates.
“The current standard variable rate of 6.2 per cent is the lowest level since 200 – outside of the GFC-induced low interest rates in 2009,” Mr Zigomanis said.
“Also, outside of 2009, home loan affordability in all capital cities is at its best level since the first half of the 2000s.”
However an economic shift brought about by the end of the mining boom would likely impact on households in Queensland, a state also grappling with a housing deficiency.
In April, the Queensland Council of Social Services estimated the state is short at least 61,900 dwellings, and Mr Zigomanis said new dwelling construction in Queensland had collapsed to below GFC levels.
He said rent vacancies had tightened from 3.9 per cent in 2010 to 2.1 per cent in March 2013, causing the median three bedroom house rent in Brisbane to increase by four per cent in the nine months to March 2013.
It comes as the Australian Council of Social Service on Monday also releases their annual Community Sector Survey which reveals extreme pressure on housing support and welfare services.
A The survey of 532 community groups showed services assisting the homeless were the most squeezed, with 66 per cent of respondents saying they were struggling to meet demand. The services said they were turning away 16 per cent of those asking for help, an increase of 5 per cent from 2010-11.
ACOSS deputy chief executive Tessa Boyd-Caine said the results of the survey, which covers 2011-12, showed that lack of affordable housing continued to force people on low incomes deeper into poverty.
She said high rents were contributing to the problem, with the median rent for a family home in Australian capital cities of about $360 almost on par with the maximum welfare payment available of $358.
Earlier this year an Anglicare Southern Queensland study found Brisbane families on minimum wages and those receiving government payments were being pushed to the brink as a source of affordable homes continues to dry up.
The study said the number of private rental accommodation options available to some of the city’s poorest households has diminished for the third year in a row.
But Mr Zigomanis said conditions across the board were expected to improve from 2014/15 as state economic conditions and confidence improve, and the upturn gains momentum.