Flooding hits Brisbane property prices

The extensive flooding that hit Queensland over the last few months has made Brisbane one of the cheapest cities in Australia to buy property.  Figures from Australian Property Monitors show that Brisbane property prices fell by 2 per cent in the first quarter of 2011, the highest of all the mainland capital cities.

Property prices in Brisbane falling

The first quarter of 2011 saw the average sale price of a house in Brisbane fall to $448,669 (around £292,850) compared with $452,546 in Adelaide.  House prices in the Queensland capital have fallen by 4.3 per cent over the last 12 months.

In contrast, median property prices in Sydney and Melbourne both rose by 2 per cent in the last year.

Australian Property Monitors senior economist Andrew Wilson believes that property in Queensland has hit the bottom of the cycle.  He said: “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.

“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.”

Volume of property sales also falling

The latest survey from the Housing Industry Association (HIA) also found that the Queensland property market was struggling.  The HIA found that the level of property sales in March was a thousand lower than the average over the last ten years.  Multi unit sales dropped by a ‘concerning’ 10 per cent, according to the HIA.

HIA chief economist Harley Dale said: “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.”