Brisbane home values fall 2% in October as rents hold up

How far Brisbane values have dropped

Cotality's figures show the fall was broad. Brisbane house values slipped 2.0% in the month to a median of $1,111,530, and unit values fell 1.7% to $811,084. The typical Brisbane dwelling is now valued at $1,018,401. Over 12 months, values are only 0.4% higher, and Cotality puts the change since the start of the year at −3.0%.

Key numbers

Units have held up better than houses over the year. Cotality says Brisbane unit values are still 3.4% higher than a year ago, while house values are 0.2% lower. Gross rental yields, which compare a year's rent with the value of the home, stand at 3.7% for all Brisbane dwellings. Elsewhere in the state, Cotality says regional Queensland values fell 0.9% in October.

Why it's happening

Five rate rises this year, taking the cash rate to 4.85% according to ABC News, have cut how much buyers can borrow, and that is now showing up in prices. Speaking to ABC News, Cotality's research director Tim Lawless said values were falling faster in South East Queensland than in other regional areas, with the Gold Coast about 6% below its peak and the Sunshine Coast and Toowoomba not far behind.

Rents follow a different logic. They depend on how many people need a place and how many homes are free to rent, and in Brisbane both measures still favour landlords. Cotality says Brisbane rents rose 1.3% in the September quarter. That gap between falling values and rising rents is why yields have been climbing, a trend we covered in home values falling for a seventh month.

Practical tips

• Saving to buy? Lower prices help, but check what higher rates do to your borrowing power before you change plans.
• Renters: falling values do not mean lower rents, so budget for your current rent, or more, at renewal.
• Owners with a spare room: if you would rather not sell into a falling market, a room can bring in steady income while you wait. Check your lender, insurer and any body corporate rules first.
• Know the rules. Queensland tenancy law applies differently depending on how many rooms you rent out. Our guide to renting out a room in Queensland explains the basics.