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RESIDENTIAL PROPERTY

QUEENSLAND

The Queensland economy was hit hard by the economic downturn with economic growth at a meagre 1.4% over 2008-09 - its lowest level for 18 years. However, in recent times, there have been some causes for optimism. Despite a sharp decline in business investment over 2009-10, the Queensland economy has exhibited moderate economic growth, with exports and government stimulus the main catalysts. Economic growth has rebounded to an estimated 3.0% for 2009-10, dragging down the trend unemployment rate in the process from 6.0% last October to its current rate of 5.4%. Strengthening demand for commodities from the Asian region should drive export growth, with the Queensland economy expected to grow at 3.5% and 5.0% over 2010-11 and 2011-12 respectively.

Private housing finance approvals have declined by 24% since August last year. Rising interest rates and deteriorating affordability have seen first home buyers leave the market in droves, with their share of the total number of home loans halving since their peak in May 2009. Unlike Victoria however, investors have remained on the sidelines, causing an overall weakening in near-term market demand conditions. This has restrained price growth compared to other capitals with residential property prices gaining a modest 4.5% over the year to June (compared to all capitals' growth of 10.5%).

Although private residential building approvals have rebounded from their lows in 2008, they remain 34% below 2007 boom levels. Completions fell by 17.5% over the course of 2009-10 pushing the underlying Queensland housing shortage to just shy of 40,000 dwellings.

Article from ANZ Australian Property Outlook August 2010

 

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