The floods, coupled with several years of economic decline, have had an impact on the city’s property market, according to Australian Property Monitors.
In the first three months of the year the average house sale price in Brisbane was $448,669 compared with $452,546 in Adelaide. And although median house prices dropped in all capital cities except for Canberra, the 2% drop in Brisbane was the highest of all mainland capital cities, suggesting that the floods have made an impact.
It has been a slow and steady decline for Brisbane, with houses falling by 4.3% over the last 12 months.
Perth house prices have also fallen by 4.3% over the year, although the market was generally inflated after rapid growth in the middle of last decade. By contrast, median house prices in Sydney and Melbourne each grew by 2% in the past year.
Australian Property Monitors senior economist Andrew Wilson said the situation in Brisbane could have been much worse and felt things had hit the bottom of the cycle.
‘It's a housing market where confidence has been down for a while and the Queensland economy has been underperforming for a few years now,’ he explained.
‘When that happens, people aren't as keen to buy and on the other end sellers decide to hold on to their house and not to sell. The floods in Brisbane were also a one off factor in the March quarter, but I think their effect will be felt over the rest of the year,’ he added.
But overall the property market is weak, according to the latest survey from the Housing Industry Association (HIA). Although the number of new homes sold has increased for the third month in a row, up 4.3% in March, volumes are low by historic standards, with the level in March nearly 1,000 sales lower than the average over the past decade.
Detached house sales drove the positive results, rising 5.8% but multi unit sales dropped a ‘concerning’ 10%, the HIA said.
HIA chief economist Harley Dale said there was still a long way to go for new home sales to reach healthy levels. ‘The March result for new home sales reflects an ongoing pause in the interest rate hiking cycle and some abatement of the severe weather conditions witnessed in early 2011,’ he explained.
‘The volume of new home sales remains subdued. A sustained period of improvement is required for new home sales and a raft of other leading indicators before we can look ahead to healthy levels of residential building activity,’ he added.
