Brisbane real estate on the rise as building approvals head south
Brisbane housing prices are powering ahead, with the Sunshine State's capital seeing some of the biggest growth in property prices.
House values in the city have increased by 5.5 per cent in the past year, figures out today have revealed.
In February alone, Brisbane's house values jumped 1.8 per cent - above Sydney's 0.5 per cent growth and coming in third to Hobart at 2.9 per cent and Adelaide's 1.9% increase.
CoreLogic RP Data research analyst Cameron Kusher said Brisbane's house prices contrasted strongly to Sydney values.
"The trend in home value growth is showing signs of increasing in those markets that have previously under-performed ," Mr Kusher said.
"Affordability constraints aren't as apparent in these cities and rental yields haven't been compressed to the same extent as what they have in Melbourne or Sydney."
Nationally, dwelling values rose 0.5 per cent in February, according to the latest CoreLogic RP Data home value index.
Mr Kusher said Brisbane was benefiting from recent job creation.
"If you look at the most recent interstate migration figures, Brisbane was pretty much at record lows, but it did look to be turning, so maybe if people are priced out of Sydney more of them are starting to look into the Brisbane housing market," he said.
Metropole Property Strategists director Shannon Davis said Brisbane was long overdue for positive growth.
"Brisbane had the GFC (global financial crisis) and the flood, whereas everyone else just had to deal with the GFC," he said.
"We are seeing lots of interstate investors looking into Brisbane and that's driven some of that growth.
"Sentiment is really good at the moment."
Susie Rose, 36, bought a house in Windsor on the weekend, after spending about three months trying to find the right investment property.
"My search was pretty intense...it was hard to find what I was looking for in the area I wanted to purchase." she said. "The competition felt pretty fierce, so I decided I needed to think a little bit outside the box."
She said she was happy with the amount she paid for the home.
"Everyone probably always wishes they'd paid less but in saying that, I was comfortable with what I paid for what I got in the current market," Ms Rose said.
Nationally, economists are worried that the cooling housing construction sector may not be able to provide new jobs and economic activity much longer.
Approvals for the construction of new homes fell 7.5 per cent in January, with a 6.0 per cent fall in detached dwelling approvals and 10.8 per cent drop in the 'other dwellings' category, which includes apartment blocks and townhouses.
In the 12 months to January, building approvals for the construction of new homes fell 15.5 per cent, Australian Bureau of Statistics data released yesterday showed.
Housing Industry Association senior economist Shane Garrett said the industry was hit by a number of unfavourable developments late last year, with banks raising mortgage rates, and credit conditions tightening for investors, particularly foreigners.
"This has made it more difficult to deliver new housing supply and today's figures seem to bear this out," Mr Garrett said in a statement.
"It is, therefore, vital that policy settings and credit conditions become more focused on the consistent delivery of the required volume of new housing supply over the long term. We're just not seeing this at the moment."
JP Morgan economist Tom Kennedy said the figures were consistent with the idea that building approvals peaked in the middle of last year and had been sliding since.
"We have seen some big rises and some big falls, but today's figures show a continuation of that underlying downward trend," he said.
January's 7.5 per cent fall in building approvals follows a 9.2 per cent rise in December, which was preceded by a 12.4 per cent drop in November.
ANZ economists said less planned residential construction was consistent with the bank's view that the economic downturn was beginning to strengthen.
"The economy is unlikely to be able to rely on building construction to support jobs growth and economic activity for much longer,"they said.
Published in the Courier Mail by Brittany Vonow, Michelle Hele and Marty Silk; Tuesday 2nd March 2016