Red lights flashing: One in 10 Brisbane homes fell in value during June, worse to come
More than 10 per cent of Brisbane’s housing market recorded a fall in value in the June quarter but there were warnings it could get much worse.
What are we chossing to give up for population growth? (file image)
While CoreLogic said the overall housing market in Brisbane was positive, there were obvious signs of fraying, while nationally the market appeared to be much worse with 42 per cent of markets analysed showing a decline, led by Sydney and Melbourne.
Economists are also warning that the Reserve Bank may have to increase the speed of its interest rate hikes because the job market was overheating and unemployment could conceivably fall below 3 per cent.
ANZ head economist David Plank said a faster move on interest rates would bring forward the point at which the economy slows below its trend.
“It also suggests house prices will fall by more than the 15 per cent or so we currently anticipate to the end of 2023,” Plank said.
CoreLogic economist Kaytlin Ezzy said the signs of an easing market in Brisbane were evident. She said 11.6 per cent of the city’s market fell in the June quarter.
Offsetting that was the number of suburbs where the median price topped $1 million. CoreLogic said 35.7 per cent of the Brisbane market, about 120 suburbs, now exceeded $1 million compared with 33 per cent in the March quarter.
Overall, house prices in Brisbane rose 2.5 per cent in the June quarter. Brisbane unit values rose 3.5 per cent in the quarter. Only 10 of the 180 analysed unit markets recorded a fall in the quarter.
The report comes as ANZ tipped the benchmark for interest rates, the Reserve Bank’s cash rate, would hit 3 per cent by the end of this year, a level some other economists consider a level that would cause significant trouble for people with a mortgage.
Plank said there was a significant chance the RBA could opt to increase its rate by more than 50 basis points (0.5 per cent) at its next meeting.
Plank said the strong jobs figures released last week were “jaw dropping” and there were still a large number of vacancies yet to be filled.
“The large stock of vacancies suggests that it will take a considerable slow down in the economy for underutilisation not to fall further,” Plank said.
“Our longstanding forecast has been for unemployment to drop to 3.3 per cent in the later part of 2022. The risks to this forecast look to be weighted to the downside, even with a somewhat faster rate-hikes than previously.
“An unemployment rate with a 2-handle is not out of the question.”
