The following is an interesting release from the REIQ on a substantial increase in the median house price in Brisbane in the December quarter, but also noting the affect of the winding back of the first home owners grant:
The reduction of first home buyers in the Queensland residential property market has had a dramatic impact on the latest median house prices from the Real Estate Institute of Queensland (REIQ).
According to the REIQ’s December quarter 2009 report, the decrease of buyers in the more affordable end of the market has resulted in median prices in most areas of Queensland being skewed upward over the quarter.
Brisbane’s median house increased 8.1 per cent to $535,000 over the December quarter however its median – along with many other areas – has been impacted by the marked change in buyer demographic.
“During the economic uncertainty of late 2008 and 2009, we saw median house prices drop as first-timers took up a greater share of the affordable end of the market – due to financial incentives and low interest rates – and therefore pushed medians lower,” REIQ chairman Pamela Bennett said.
“Now the natural correction has taken place as first home buyers return to a more usual percentage of the market.
“It is interesting to note that while many areas this quarter have experienced a surge in median price, the results over the year are far more modest with increases, or even decreases, of a only few per cent.”
While agents have been reporting a healthy level of demand and sales this year, the recent run of interest rate rises may put a dampener on the burgeoning market recovery as housing affordability worsens.
The REIQ report – part of the REIQ’s Queensland Market Monitor research publication – found the number of preliminary sales under $500,000 dropped 22 per cent in the period.
The market as a whole also slowed with total preliminary house sales down 16 per cent compared to the September quarter.
“The reduction of the First Home Owners Boost on 1 October last year and three consecutive interest rates during the December quarter ensured first-timers exited the market fairly rapidly over the period,” REIQ managing director Dan Molloy said.
“At their peak last year, first home buyers represented about 30 per cent of the market in Queensland, however, this number has already dropped to 17 per cent and may even reduce further after four interest rate increases in just five months.”