Brisbane house prices are experiencing another month of strong growth, but not at the same pace as March’s surge.
During the first three weeks of April, home values in Brisbane and the Gold Coast jumped 1.3 per cent, according to CoreLogic daily index data.
Real estate researchers expect prices to continue rising this year and next year, and CEOs of major banks chimed in this month with strong growth forecasts of their own.
The April price rise follows Brisbane median home values rising 2.4 per cent in March to $548,000. Nationally, home values last month grew at their fastest rate in 32 years – 2.8 per cent.
CoreLogic research director Tim Lawless said the current growth rate was “arguably unsustainable” considering the monthly average for capital city home value increases over the past decade was 0.3 per cent.
Mr Lawless said the primary reason for the strength was demand for housing outweighing supply, spurred on by the prospect of low mortgage rates remaining for an extended period.
“A surge in consumer optimism, thanks to economic conditions consistently exceeding expectations, is adding to confidence in the housing market,” he said.
However, the pace should slow as first homebuyer demand wound down and affordability constraints hit buyers, Mr Lawless said.
“It’s looking like some of the heat is leaving the market,” he said.
Mr Lawless said Brisbane was benefiting from a strong rate of interstate migration.
“That should continue to keep demand for housing at high levels, supporting further price growth,” he said.
REA Group director of economic research Cameron Kusher said the Brisbane and South East Queensland market was seeing strong demand and rising sales activity.
“The most popular areas are proving to be outer more affordable housing markets and the Gold and Sunshine Coasts,” he said.
Mr Kusher said auction activity, sales volumes and REA Group’s realestate.com.au website demand indicators suggested demand would continue to propel prices higher.
“The surge in buyers has been substantial and as more of those buyers purchase a home, the next wave of buyers may not be as large as what we’ve seen,” he said.
Mr Kusher said low interest rates were creating comfort among borrowers.
“A much larger proportion of borrowers are locking in mortgage rates,” he said.
“Other drivers include a reduced ability for households to spend on luxuries such as overseas holidays, and government incentives.”
Mr Kusher said prices should continue rising, but not as fast in the second half of the year, “especially if the recent increase in the supply of new properties listed for sale is maintained, which would offer more options for purchasers and less of a frenzy to secure the limited stock that is available for purchase”.
At parliamentary hearings this month, the bosses of the big four banks forecast house price growth this year between 10 per cent and 17 per cent, and were also bullish about home values in 2022.
APRIL’S RISING HOME VALUES
Sydney up 1.6%
Melbourne up 0.9%
Brisbane up 1.3%
Adelaide up 1.3%
Perth up 0.5%
Source: CoreLogic daily indices for first three weeks of April