$15k price drop: Qld home prices falling after April peak

It’s now $15,500 cheaper to buy a house in parts of Queensland than at the peak, with one surprise region leading the downward trend and another housing market taking the lead.

IT is now over $15,000 cheaper to buy a house in parts of Queensland than at the peak of the pandemic property boom, as the soaring price growth goes into reverse across most of the state.

The latest PropTrack Home Price Index, out today, shows that dwelling (house and unit) values have declined 1.2 per cent since the April peak in Brisbane and 1.93 per cent across the combined regions, which includes the powerhouse Gold Coast and Sunshine Coast markets.

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The price was reduced by $395,000 after the contract crashed on this Sanctuary Cove house. It was listed for offers over $2.1 million and is now under offer.

In August alone, values dropped 0.32 per cent (Brisbane) and 0.72 per cent (regions).

Median house values in Brisbane are now $885,000, or about $13,000 less than the April peak.

Across regional Queensland, which has a combined median house value of $666,000, it is now about $15,500 cheaper.

On the market for offers over $1m, this Norman Park house has had $200,000 knocked of its list price.

PropTrack economist Paul Ryan said prices were now “falling noticeably” in Brisbane, but the biggest quarterly decline was on the Sunshine Coast, arguably Australia’s hottest market during the boom.

The Sunshine Coast recorded the sharpest fall across all regions nationally, down 3.3 per cent to a new median dwelling value of $1.035 million.

“The heat has really come off places like the Sunshine Coast, with prices now 3.3 per cent lower than the peak,” Mr Ryan said.

“They are also down in Central Queensland (-2.19%) and the Gold Coast (-1.61%).

PRICE REDUCED: 5 Kowandi Street, Wurtulla, is now listed for offers over $950,000

Meanwhile, values over the quarter were also down 0.98 per cent in Townsville and 0.52 per cent in Darling Downs-Maranoa.

PRICE REDUCED: 69 Armstrong Street, Hermit Park, is now listed for $575,000

Mirroring the national trend, there are now signs of a “regional reversal”, with regional home prices across Australia falling at their fastest pace since 2011 over the last quarter, according to PropTrack.

The Property Baron principal and buyers agent Jason Baron, who operates on the Sunshine Coast, said buyers were in a better position now than they were just a few months ago.

“There is less competition and we are seeing some properties sitting on the market longer, and some even selling below asking price,” he said.

“Auction clearance rates are also low compared to earlier in the year.

“The biggest challenge at the moment is buyer confidence, as some are reluctant to pull the trigger as they just don’t know where interest rates are going.”

The feeding frenzy for Sunshine Coast property has eased Picture Lachie Millard

Mr Baron said the shift was good for buyers after a strong sellers market but he added that a 3.3 per cent drop in prices was a “drop in the ocean” compared to the eye-watering price growth on the Sunshine Coast since early 2020.

In the last 12 months, values have soared 12.92 per cent on the Sunshine Coast, with a staggering 21 suburbs recording price growth north of 50 per cent.

But there is a new leader of the price growth pack, with Cairns now the strongest market in Queensland.

There, values rose 1.6 per cent in August.

Aerial view of Trinity Beach, on the northern beaches of Cairns. Picture: Brendan Radke

Karl Latham of Twomey Schriber Property Group in Cairns said he did not believe the region had reached its peak.

“I thought it had in June/July but it has picked up again and everything is moving, from high end to affordable stock,” he said.

“There is a huge number of interstate investors in the market, people relocating from down south and the first homebuyer market is also running hot.”

This Freshwater home in Cairns sold for a suburb record of $1.412m in February

Mr Latham said Cairns was slower out of the price growth gates than other regions, but that he believed there was still room for prices to grow yet.

Meanwhile, Brisbane has lost its spot as Australia’s strongest performing capital city market over the last year, having been overtaken by Adelaide.

Auctioneer David Holmes said the frenzy had gone out of the market, but still tipped a strong spring and summer selling season.

“Agent confidence to go to auction has declined a bit and the depth of buyers who can jump in has dropped off as they are wanting to assess their ability to afford more rises,” he said.

“Some sellers are also seeing a 5-7 per cent reduction from their reserve price to get the deal done.”

Brisbane Heat Map. PropTrack

Mr Holmes said that the number of registered bidders had roughly halved since the peak, falling from around 7 to 3.5 per auction.

He added that while the clearance rate had fallen, it was still strong just “not as strong as the peak when it was 70, even touching 80 per cent”.

“They (sellers) are meeting the market and are happy to do so as there is an acceptance that regardless of a value reduction, we have seen exceptional equity growth over the past few years,” he said.

The strongest performing regions in the past 12 months were Ipswich (+23.95%), Logan-Beaudesert (+22.03%), Wide Bay (+20.73%), Moreton Bay (North) (+20.44%) and Toowoomba (+17.13%).

PRICE REDUCED: 5 Pleasant Court, Carrara, is now listed for $850,000

Nationally, dwelling values were down 0.39 per cent last month, led by regional Queensland (-0.72%), Hobart (-0.56%) and Sydney (-0.49%).

Regional South Australia, Darwin and Perth were the only markets that saw an uplift in prices in August, according to PropTrack.

Looking ahead,Mr Ryan said it was unlikely prices in Queensland would fall below pre-pandemic prices, but that they would likely return to around January median values by the end of the year.

“Despite recent falls, prices (nationally) are still significantly above their pre-pandemic levels,” he said.

“Regional areas remain up almost 50 per cent since March 2020.

“Capital city prices are up 26 per cent over the same time period.”

PRICE REDUCED: 23 Richmond Street, Corinda , is now listed for $1.149m

Mr Ryan said he expected prices to continue to fall across Australia into next year, tipping that the Reserve Bank of Australia would lift the official cash rate by 0.5 percentage points on Tuesday to 2.35 per cent – the highest since 2015.

“The RBA killed the boom, but I think that had to happen,” Mr Ryan said.

“It is clear that market is now adjusting to find the new fair market value.”