Queensland Property Market is Dropping!

We all understand how long it takes for property sales to be officially recorded in our marketplace.

From the time a property goes under contract through to the date of settlement, government records can then take a further few months to officially record the sale.

It has made having meaningful and factual discussions with our sellers incredibly difficult. How can we communicate a rising or falling market to our clients without any real market evidence?

For the first time, this week's statistical information shows us what we already knew - prices are falling. What has been a surprise is just how much they have fallen on the Gold Coast & also in areas such as Robina.

The latest statistical information released this week shows a sharp reversal in prices for regional areas with the Gold Coast recording a 6.4% decline over the July to September quarter.

In our own backyard of Robina the falls have almost hit 10% across the last four months of July - October with Robina's median house price falling from $1,240,000 in late June to $1,130,000 by late October. Please see below.

Let's put these numbers into perspective.

Based on the new data, a home in Robina worth $1,230,000 at the end of June has been falling in value by almost $6500 each week since.

With this momentum expected to continue moving forward, the next few weeks leading up to Christmas are absolutely critical for our current sellers.

With prices falling and a large influx of new properties expected to hit the market in January, the importance of securing a sale over the next two to three weeks before the Christmas slow down can not be underestimated.

Please discuss these latest numbers with your current vendors as a matter of urgency.

Making an adjustment on price may be difficult for your sellers to accept but all the available information suggests it is the most prudent course of action to help secure a result now before the expected listing rush in early 2023 puts further downward pressure on prices.

Please see below an article from ABC News discussing Corelogic's latest National data that was released during the week.

Queensland property 'hotspots' no longer resisting dip in house prices, new data reveals

Regions that became pandemic property "hotspots" have led sharp falls in Queensland's housing market in the latest quarter, new data has revealed.

CoreLogic's regional market update reported sharp declines in the price of houses in some of Australia's most popular regional markets in the three months to October.

The Sunshine Coast recorded the highest fall in regional Queensland, down 7.1 per cent, followed by the Gold Coast, where house prices dropped by 6.4 per cent.

CoreLogic's head of research in Australia, Eliza Owens, said house prices across regional Queensland suffered a downturn over the past quarter, declining by 5 per cent overall from a peak in June.

"To October, values across regional Queensland were still sitting 36 per cent higher than where they were at the onset of COVID-19, but what's very clear is that if you look at the data month-to-month prices are starting to turn," she said.

"That high-end, expensive, lifestyle area of the regional Queensland market is really now leading a decline."

Units recorded a more moderate drop in prices, down about 3 per cent across regional Queensland since June.

Ms Owens said rising interest rates were beginning to hit buyers in their hip pocket, driving the cooling trend.

"The amount of money that people can borrow for housing is constrained," she said.

"It also is reflective of the higher inflationary environment, where households are facing higher rents, a higher cost of living, so a lot of people are probably finding it more difficult to gather a deposit for housing as well."

Justin Voss, who runs a real estate agency on the Sunshine Coast, said he hadn't noticed a fall in prices, but slowing migration to Queensland from interstate and rising interest rates meant it was taking longer for sellers to find prospective buyers.

CEO of the Real Estate Institute of Queensland, Antonia Mercorella, said real estate agencies were reporting slowdowns in property markets across most of Queensland, but so far it wasn't cause for concern.

"It is important to understand that those same regional markets have experienced pretty extraordinary growth for a number of years," she said.

Ms Mercorella said the market would likely continue to slow, at least until interest rates stabilised. But she said home owners on the Gold and Sunshine coasts still had "plenty of reason" to be confident.

"When we look at those markets of Gold Coast and Sunshine Coast, what we know about those markets is that they're lifestyle destinations.

"They're always perennially popular and I think we will continue to see those markets performing well into the future."

Central Queensland was the only regional Australian market analysed that recorded an increase in house prices over the quarter – a modest 0.1 per cent.

"If you look at areas like Wide Bay, Townsville these are starting to trend down between 1 and 3 per cent over the past three months," Ms Owens said.

But Ms Owens said it was too early to tell whether the regional market "bubble" had burst.

"Unfortunately, when it comes to a bubble burst, you can't really tell until after the fact. I think we're a bit early on into this downswing to know whether that's really the case, or whether values just start to go up again once the interest rate cycle is done tightening and starts to come down.

"Values are down about 4.5 per cent from the peak, but they're still sitting 36 per cent higher than a couple of years ago. We've got a long way to go before the total value of the past few years has eroded.

"This looks to me like a bit of a correction in response to some of the extremities we've seen in interest rates."

Brisbane also recorded a steep downturn in dwelling prices.

"The Brisbane housing market saw a peak in values in June of this year and so far, values have come down about 6.2 per cent from that point," Ms Owens said.

Rental market at 'critical levels'

While house prices look to be going down, she said the rental market remained at "some of the most critical levels we've ever seen", particularly on the Sunshine Coast and Gold Coast.

"It is a very disruptive and very dangerous situation, because we know that tight rental markets are one of the many conditions that can actually increase the risk of unstable housing and insecure housing," she said.

"If you're expecting a lease to be renewed, you can probably expect the asking rents to go higher.

"It might actually incentivise more people to buy if they have the money to do so, but if not, I think we're probably going to see things like higher density living the re-formation of share houses or even people just trying to move to other areas to try and seek more affordable housing."

HTW Valuers Month in Review - November 2022. Please see below

https://static.htw.com.au/HTW-month-in-review-November-2022.pdf

HTW Valuers National Property Clock - November 2022 for Houses & Units. Please see below