BRISBANE homeowners will be the envy of their southern counterparts over the next few years, with property price growth predicted to be the strongest in the country after Adelaide.
House prices in the Queensland capital are forecast to rise by 11.3 per cent in the next three years, according to the latest BIS Economics Australian Housing Outlook.
Brisbane’s median house price is tipped to grow to $615,000 by June 2021.
The report found Brisbane’s affordability remains significantly more attractive than in Sydney, where house prices are forecast to fall 3.5 per cent in 2019 before bottoming in 2020, and in Melbourne, where they are set to drop another 4.2 per cent next year.
But the outlook is less rosy for Brisbane apartment owners, with unit prices set to fall by 5.1 per cent over the next three years as the oversupply of stock continues to be absorbed and demand from investors weakens.
The median price for an apartment in Brisbane is expected to fall to $405,000 — the greatest forecast decline out of all capital cities.
Greater competition for inner-city apartments is tipped to cause investors to lower rents to try to draw tenants from more affordable city fringe locations.
Competitive unit rents and prices due to the oversupply may encourage some potential first home buyers to remain as renters, or alternatively preference an apartment purchase over a house.
QBE Lenders’ Mortgage Insurance chief executive Phil White said tighter lending restrictions had impacted property prices nationally.
“We anticipate foreign investment will further dampen in coming years owing to a number of factors such as increased approval fees, stamp duty and land tax surcharges, as well as tighter capital controls from foreign governments, most notably China, which have impacted how much money they can take out of their country,” Mr White said.
But Queensland’s increasing population growth is expected to support buyer demand.
The report is the only one of its kind in Australia that looks at what house prices will do over the next three years.