The once invincible Brisbane property market only recently recorded its first quarterly drop in house prices. Better times may be ahead, however.
One of the major talking points by Queensland property experts has long been its population growth. South East Queensland in particular had been touted as one of the fastest growing regions in Australia. But that boost to the property market's tightening demand has been on the decline recently.
While the population is still increasing, it's noticeably slowed heading into 2009, according to Bill Morris, author of the Midwood Queensland Investment Report. Annual interstate migration has gone from a peak of 45,000 two years ago to about 30,000, he says.
He puts a large part of the reason on out-of-state residents being unable to sell their homes at a desirable price, often putting off a sea change move to Queensland. The Sunshine State's prices have also risen so much in the previous couple years as to make it no longer a more affordable option for some Australians, such as those in Melbourne.
"Queensland's prices are no longer lower than Melbourne's," says Morris. "They used to be, but not anymore."
Thus there has been no price advantage to make the move. Job growth has also slowed in many parts of the state, especially those reliant on mining or tourism, impacting both interstate and overseas migration. As fewer people come in than expected, it will have a negative impact on the property market.
"We will suffer from interstate and overseas migration being less," says Morris.
He says that for now, the fall back point of the fundamentals always being there in Queensland is no longer true. They've taken a hit, and it's showed in the prices.
"The fundamentals aren't as strong as they used to be two years ago," says Morris. "Things are not as rosy as they were, obviously."
In fact, he says Queensland this year showed its first quarterly drop in property prices on record.
That's not to say all Queensland properties have taken a major fall. In fact, many investors are still doing well, especially in and around Brisbane, where rental yields remain strong. But certain areas, such as the Gold Coast and Cairns region, are no longer anywhere near their peak prices. Morris says Gold Coast prices are down 16%, from last year's pinnacle price point. He reckons Townsville and Cairns may still have four more months of price decline left in them.
In many cases, the price corrections already seen this year were necessary, however.
"We were overpriced," says Jonathan Rivera, Colliers International residential research director. "I don't think we were ever worth those previous price levels."