Brisbane is at a cross-roads.
At the start of last year I predicted that 2024 would be a two-horse race between Brisbane and Perth.
In the end, Perth had more staying power, and dominated the house price league table quite handsomely (although Brisbane still had a blinder of a year.)
Coming into 2025, Perth is still leading the way, but Brisbane and Adelaide are still in touch… for now.
It’s why some people were a bit surprised to see that KPMG had a pretty ordinary forecast for Brisbane in their latest analysis.
(Adelaide is pencilled to do worse, but Adelaide has been a wild card these last few years. 2023 and 2024 were phenomenal… could it pull another rabbit out the hat?)
But is true that the general consensus among property forecasters is that Brisbane is losing momentum.
House values are dropping in one in seven suburbs across Brisbane, the highest level in almost two years as the number of owners trying to sell rises but prospective buyers fall away.
“The Brisbane housing market is clearly losing momentum across both houses and units, so there’s a potential for values to drift lower based on the growth trend,” said Tim Lawless, research director at property data company CoreLogic.
“Listings have increased compared to a year ago, while lower interstate migration and worsening affordability had also reduced demand.”
“The market is likely to continue to ease, and we could see prices moving into a subtle decline before interest rates come down,” he said.
You can see this loss of momentum in the rolling three-month growth numbers. Growth rates have been falling since the middle of last year, and for houses are only a notch above zero now.
On current trends, prices in Brisbane could start falling in the next couple of months.
This sets up a crucial race for Brisbane.
Because momentum matters. And once property values start falling, buyers start to hold off, wanting to see if prices will fall further.
It creates a bit of a vicious cycle, where price falls put buyers off, and the absence of buyers has prices fall even further.
So… what could save the day?
Rate cuts.
Rate cuts are expected in the very near future, and the sense that the rate cycle has finally turned should pull more buyers into the market.
So that’s the crucial juncture that Brisbane faces right now.
Will rate cuts head price falls off at the pass, and turn momentum around?
My guess is that if we get cuts at the next RBA meeting in a few weeks, that should be enough to do it.
But if the RBA sits on its hands and waits for say, April or May, that might leave prices vulnerable.
Watch this space.
DB