New data has found that Brisbane blitzed other capitals ending the year with the highest housing value growth on the mainland, with no sign of a slowdown in 2022 for the entire South East Queensland region.
CoreLogic data released Tuesday expected a two speed housing situation to emerge in the country with Brisbane, regional Queensland and Adelaide set to defy 2022 slowdowns currently being experienced in Sydney, Melbourne and Perth.
Brisbane delivered a whopping 27.4 per cent surge in housing values in 2021, it found, with regional Queensland seeing a rise of 25.2 per cent. The only other capital to go higher was Hobart off the mainland at 0.7 percentage points more than Brisbane (28.1 per cent for the year).
“In Brisbane and Adelaide, housing affordability is less challenging, advertised stock levels remain remarkably low and demographic trends continue to support housing demand,” the report found.
CoreLogic research director Tim Lawless said Brisbane and Adelaide, along with regional Queensland, were the only broad regions where there was no evidence of value growth slowing just yet, with the monthly rate of growth reaching a new cyclical high in December.
“These regions show less of an affordability challenge relative to the larger capitals, as well as better support for housing demand with Queensland in particular showing strong interstate migration,” he said.
“Additionally, we haven’t seen the same level of supply response seen in other regions, with the trend in advertised supply remaining well below average in these markets.”
Regional Queensland was the clear standout across the rest-of-state markets in December, with housing values up 2.4 per cent, however over the year the strongest regional markets have been in New South Wales (29.8 per cent) and Tasmania (29.5 per cent).
The most popular regional markets have seen housing values rise more than 30 per cent over the calendar year, with the Southern Highlands and Shoalhaven recording the highest annual rise in home values at 37.7 per cent, followed by Queensland’s Sunshine Coast at 33.7 per cent.
Both Sydney and Melbourne had slowed sharply, CoreLogic found, delivering their softest monthly reading since October 2020, as buyers face bigger deposit hurdles caused by higher housing prices alongside low income growth, while Perth was being hit by a disruption in interstate migration linked to its extended closed border.
“A surge in freshly advertised listings through December has been a key factor in taking some heat out of the Melbourne and Sydney housing markets, along with some demand headwinds caused by significant affordability constraints and negative interstate migration.”
Mr Lawless said the top quarter of the housing market was now leading the slowdown with growth of 2.6 per cent in the December quarter, compared to a 3.7 per cent rise across the lower quartile and broad middle of the market.
“We have seen this trend in previous growth cycles, where more expensive housing markets have shown greater levels of volatility; housing values tend to rise more through the upswing but record a larger decline through the down phase of the cycle.”
Housing inventory was now low across regional Australia, with advertised stock levels finishing the year 35.9 per cent below the five-year average, while stock in the combined capital cities was 14.2 per cent below the five-year average.
There was a word of warning for areas pricing themselves out of the market, especially along the coast.
“It is likely regional markets, especially those with lifestyle appeal, will continue to benefit from higher demand as remote working policies are more normalised, and demand for holiday homes remains strong amid continued international border restrictions. However, as interest rates begin to bottom out, and affordability constraints extend to regional markets, these housing markets may also move into a downswing phase over the course of 2022.”
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