SEQ residential market yet to turn the corner

 Brisbane, 7 June 2012 - South East Queensland’s residential market continues to face slow trading conditions, as caution prevails and capital values remain subdued.
 

Although slight improvements were measured across the second quarter, these have generally been confined to the Brisbane market and have not been sufficient to indicate a building in capital values.

According to CBRE’s latest Residential MarketView report, while the Queensland economy has been buoyed by expansion in the resources sector, significant challenges remain in tourism, manufacturing and construction.

This has resulted in a segmented market, with tough operating environments particularly evident in areas that are not exposed to the benefits of the resource sector such as the Gold Coast and Sunshine Coast.

CBRE Global Research and Consulting Associate Director Sam Reilly said Brisbane had fared best in Q2, experiencing the most market improvements across the quarter.

“Improvements have been identified for properties within a 15 kilometre radius of the Brisbane CBD, though activity is still confined to realistically priced property,” Mr Reilly said.

“In some instances, back up contracts are being sighted by valuers indicating some proven levels of demand that have also been illustrated by reduced selling periods.”

According to CBRE’s report, the Gold Coast and Sunshine Coast markets continued to lag in Q2, and further risks of more price declines lay ahead.

CBRE Mortgage Valuations Regional Director Tom Edwards said the Gold Coast was clearly a buyers’ market, with slow conditions still prevailing.

“The Gold Coast remains one of the worst-performing residential markets in Australia, with oversupply in the unit market a major issue,” Mr Edwards said.

The Sunshine Coast faced similar conditions in Q2, though not quite as significant from a value decline perspective. Some signs of increased activity were recorded in the quarter in the lower price brackets, but these markets remain overwhelmingly soft.

“The prestige market, particularly in Noosa, is still trending down with agents reporting very low levels of buyer interest,” Mr Edwards added.

Further west, the Toowoomba market continues to record historically low sales volumes, however buyer sentiment has improved as a result of the change in State Government and interest rate reductions.

Mr Edwards said the short to medium term outlook for the overall SEQ market was likely to continue remain segmented, with scheduled growth proportionate to resources proximity.

“The big challenge facing Queensland is how to ensure that the benefits from the resources sector can be spread throughout the state,” Mr Reilly said.

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