More bad news for Queensland property: Eliza Owen

Historically, the east coast housing markets of Brisbane and Melbourne have followed the Sydney growth cycle, booming shortly after the Sydney market reaches its peak.

Despite speculation that growth in the Sydney market would spill north to Brisbane, devastating weather conditions and the deterioration of commodity prices mean that the greater Brisbane region has seen subdued growth so far in 2015.

Our latest data shows that the median house value in Brisbane contracted by 1.33% for the March quarter. Units did not do much better, with growth of 0% in the same period.

Queensland Treasurer Curtis Pitt described the Federal Budget as a “let down for Queensland”.

The State Government was chasing funding for a cross river rail, the second stage of the Gold Coast light rail and the Sunshine Coast rail duplication.

However, the Federal Government has announced its infrastructure loans are conditional, and Queensland will not receive full federal support unless it agrees to sell its assets.

Unless the State Government can negotiate further infrastructure funding, Queensland may see subdued economic and employment growth.

This is further reinforced by the abolishment of the tax free threshold for those on a working holiday in Australia.

The reform could reduce tourism, which has provided a crutch for the Queensland economy following the tapering off of the mining boom.

Any fiscal policy impacting tourism is also important for those with holiday rentals to consider, as rental returns could go down and vacancy periods have the potential to go up.

Eliza Owen is the Market Analyst for Onthehouse.com.au.