The latest REIQ figures show that in the 12 months to the end of December 2007, most areas of the State experienced strong median house price increases.
But while 2007 is likely to be remembered as a stellar year in future editions of Queensland property history books, the economic conditions that underpinned last year’s market are now somewhat changed.
"Last year’s very strong results were driven by consumer confidence, population growth and a robust economy," REIQ chairman Peter McGrath said.
"While Queensland’s economy is still in great shape, and there doesn’t seem to be any downturn in the number of people migrating to the Sunshine State from overseas and interstate, the series of interest rate rises since November last year has started to have an impact on the market."
REIQ figures show that the number of house sales was down by about 20 per cent in the December quarter.
"Sales numbers did decline in the month of December. This was partly driven by the interest rate rise in November, the Federal Election and Christmas which is a historically slower period for many markets across the State," Mr McGrath said.
The market also continues to be characterised by an undersupply of stock – particularly in the affordable range – with buyers also being more selective.
Stock market volatility is likely to impact the prestige market this year and council amalgamations will possibly cause a few headaches over the short-term.
The Reserve Bank of Australia has warned that a tighter monetary policy will be required this year as it tries to keep inflation in check, however, the four interest rises since November are starting to ease demand in the market.
According to the REIQ, the fundamentals of the Queensland property market remain the same, however, with population growth and a strong economy likely to continue to underpin moderate house price growth into the future.
The resources boom shows no sign of abating, and State and Federal Government plans for substantial infrastructure projects – especially in the southeast – are good news for the economic future of this State.
Queensland has historically recorded annual house price growth of between five to 10 per cent, which is a more sustainable level.
"There is no doubt that last year’s results were spectacular but a return to more sustainable levels of growth is not only likely this year, it is the preferable outcome," Mr McGrath said.
Housing affordability continues to decline with the current economic conditions leaving many would-be first home buyers locked out of the market.
Successive interest rate rises and increasing house prices has dampened demand from this segment of the market. However, agents have been reporting that when affordable properties do become available they do not last long.