I am quoted extensively in John McCarthy’s Courier-Mail article this morning Brisbane house prices showing strong growth while regions are suffering (pay-walled), expressing similar views to those in my post from yesterday. In the Courier-Mail article, I sound more alarmist than I actually am, but nonetheless John has fairly reported my views. I am also quoted regarding the Real Estate Institute Queensland’s proposal to extend the First Home Owners’ Grant to existing dwellings in regional areas, which would be bad policy in my view:
Regional mayors have also petitioned the State Government to back a call from the Real Estate Institute to extend the First Home Owners Grant to all housing rather than new homes only.
But Mr Tunny said the grant was initiated to offset increased costs from the goods and services tax, “so this doesn’t make sense in terms of the original rationale for the grant’’.
We need to be concerned about the budgetary cost, noting Queensland is still running a fiscal deficit and accumulating debt.
“If the Government wants to stimulate regional areas, there may be better ways to do it,” Mr Tunny said.
Incidentally, yesterday CoreLogic published its latest Hedonic Home Value Index estimates, so below I have included an updated version of a chart using these data that I presented in yesterday morning’s post. The chart still shows a decline in Brisbane unit values over 2016 (-0.2%) compared with moderate house price growth of 4%, while the housing price bubble continues to expand in Sydney and Melbourne. Unit values are obviously growing strongly on the Gold Coast, as CoreLogic has estimated unit values in the Brisbane-Gold Coast region grew 2.3% over 2016, compared with a fall of 0.2% in Brisbane itself.