Brisbane’s median house price has increased to $668,000, showing positive property growth amid a declining national market, new figures show.

As house prices in Australia’s two biggest cities fall deeper into a downturn, the Brisbane local government area is bucking the trend, having recorded 1.2 per cent house price growth over the past 12 months.

Nationally, house prices are down nearly 3 per cent, while in Sydney and Melbourne houses are down 6.5 per cent and 3.2 per cent respectively, the latest Domain House Price Report shows.

The figures for Greater Brisbane showed the annual median house price was up 2.2 per cent across the five LGAs, which include Brisbane, Ipswich, Redland, Moreton Bay and Logan, although it recorded a 0.4 per cent drop over the quarter.

Median house price YoY growth Median unit price YoY growth Brisbane LGA $668,000 1.2% $435,000 -3.3% Greater Brisbane $567,376 2.2% $376,972 -6.8% Ipswich $386,250 5.8% $308,500 -3.6% Logan $432,500 4.2% $282,500 -8.0% Moreton Bay $470,000 3.3% $335,000 -6.9% Redland $550,000 3.2% $440,000 -0.5%

Brisbane’s steady but positive performance was encouraging in the context of what was happening elsewhere in Australia, said Domain senior research analyst Nicola Powell.

“Nationally, [the] downturn has been aided by the tightening of credit by the banks following regulatory intervention and a bruising royal commission,” she said.

“Rising mortgage rates, tighter credit conditions and reduced borrowing power have impacted all capital cities to a varied degree.

Capital city median house prices – September quarter

Sep-18 price QoQ change YoY change Sydney $1,101,532 -3.1% -6.5% Melbourne $852,980 -3.9% -3.2% Brisbane $567,376 -0.4% 2.2% Adelaide $535,527 -0.3% 3.8% Canberra $740,215 0.0% 4.0% Perth $544,609 -2.4% -2.2% Hobart $478,491 3.7% 19.3% Darwin $519,260 -2.2% -12.0% National $781,787 -2.6% -2.9%

“Comparatively, Brisbane is performing well,” she said. “Interstate migration has hit a decade high, helping to propel Brisbane to one of Australia’s fastest growing cities. This will support demand for housing.”

McGrath Paddington agent Reuben Packer-Hill said while tighter lending criteria had affected some buyers, Brisbane’s western suburbs had performed exceptionally well in the past 12 months.

“Chapel Hill has shown 8.9 per cent growth year on year. As a micro market, we are bucking the trend and that’s because there’s a shortage of stock and a lot of competition,” he said.

“But I think it’s important to understand that in the outer fringe, in suburbs like Kenmore, Chapel Hill and into the Centenary suburbs, they’re probably not as exposed to the ups and downs and changes in the market because it’s such a strong family demographic. Families still need houses to live.”

Mr Packer-Hill recently sold 32 Burdekin Drive, Sinnamon Park, in only three weeks for $2.5 million, setting a residential record price for the suburb. He said it was indicative of the demand for property, particularly at the prestige level, in the area.

“Tightened lending criteria is certainly affecting some buyers and I’m seeing an extension of finance clauses but the fundamentals are that quality stock is always in demand — and in this part of Brisbane, there’s not enough supply,” he said.

“The wonderful thing about the Brisbane market is because we don’t go through the huge growth, we’re not exposed to the same downturns. That’s why people take confidence investing here.”

However, economists said it was important to recognise Brisbane’s growth for what it was — positive, but minimal — and not the beginnings of a boom.

“There was a case to be made for Brisbane when Sydney was booming — that we would see Brisbane house prices also move up — but the time for it seems to have dated,” said AMP chief economist Shane Oliver.

“The main reason I’ve become less optimistic is the credit. The problem of the tightening in credit standards will impact buyers in Queensland as much as NSW and Victoria.

“On the one hand you could say Brisbane’s strengthening population is a positive and affordability is always a positive, but the main dampener is the credit cycle. It has got us less optimistic. I would see the one per cent growth continuing.”

NAB group chief economist Alan Oster said while Brisbane was performing well relative to Sydney and Melbourne, the bank’s forecast for Brisbane was very conservative.

“Our forecast for Brisbane is pretty much flat,” he said. “Next year, our forecast for Brisbane is 0.0 per cent.

“Performance can vary [from] postcode to postcode … but broadly Brisbane is going sideways.”

Space Property agent Judi O’Dea said lending conditions had had a small impact in Brisbane’s inner city suburbs but not enough to take the shine off the city’s prospects.

“There is so much going for Brisbane at the moment, so much new infrastructure and so much happening, it would take more than that for Brisbane to falter,” she said.

“Brisbane has a stability to it…it just kicks over beautifully. The banks have caused a bit of angst but nothing drastic.

“Our auction clearance rates are steady and I see that continuing. The banks and their lending restrictions will likely ease as they don’t want to cut off their nose to spite their face.

“I’m very confident in the continued stability of our inner city marketplace…there’s a lot of excitement around Brisbane at the moment.”

Brisbane’s unit market remained a concern for economists. The latest Domain figures showed units in the Brisbane LGA fell 3.3 per cent over the September quarter, while in Greater Brisbane they fell by 3.2 per cent over the quarter and 6.2 per cent over the past 12 months.

“I don’t think it’s time for Brisbane units to shine,” said Mr Oster.

“We think they are incredibly overbuilt in the CBD. [Prices] are only slightly down but we don’t think the falls are finished.

“You might like buying there but you wouldn’t be expecting any capital gain anytime soon.”

Dr Powell said while units in Greater Brisbane had dropped in median price significantly, anecdotal evidence suggested that well-built, owner-occupier apartments had fared much better.

“Those type of units will certainly be holding firmer than those solely targeted at the investor,” she said.

“That’s a broad thing that will happen anywhere; it’s always those investor-led markets that are more exposed.”