According to RPData, since the end of 2007 Brisbane property values are down -9.7%, Gold Coast house values are down -19.9% and Sunshine Coast values are down-13.2%.

While some of the fall can be attributed to the January floods weighing down the south-east Queensland market, the market was weakening before then and has continued to do so after the floods. So what else is affecting the market?

Increases and decreases in tourism numbers greatly effect business in the Gold and Sunshine Coasts. The high Australian dollar and the Global Financial Crisis (GFC) have dampened tourism numbers and this is impacting South East Queensland and most coastal markets of the state. International investors are also sitting on the sidelines as the stronger currency has made Australian property more expensive.

Following the GFC, people from New South Wales and Victoria are increasingly cautious about selling their home and making the move to a Queensland coastal location. Also the growth in Queensland’s property prices has reduced the gap between property prices in Sydney and Melbourne also making it less attractive.

Over the last 10 years, Brisbane property values have increased at an average annual rate of 9.8 per cent. In 2007, Brisbane values increased by almost 25 per cent compared to growth of about 14 per cent across the combined capitals. That magnitude of growth cannot continue forever and will at some stage lead to a correction.

Having a look at the statistics, compared to the same time last year, the total number of properties available for sale at the moment is 27.9 per cent higher. However, the introduction of new stock is slowing with new listings currently just 0.3 per cent higher than they were at the same time last year.

In March 2011, throughout Brisbane, it was taking an average of 66 days to sell a house and 63 days to sell a unit. At the same time in 2010 it was taking 50 days to sell a house and 41 days to sell a unit.

Finally, Brisbane vendors in March were discounting the asking price on houses by an average of 7.7 per cent and units by 7.9 per cent. Thus a house being advertised for $1,000,000 would, on average, sell for $923,000, a discount of $77,000. At the same time last year (when the market was still not particularly strong) discounts were recorded at 6.0 per cent for houses and 4.7 per cent for units.

Looking forward, international investors and tourists will become accustomed to the value of the Australian dollar and start reinvesting and travelling back to Australia. Also, with the gap between Sydney and Victoria prices starting to increase again it will not be too long before we see interstate investment in Queensland provided the employment rate remains low and wages growth is larger than inflation.

In the short-term we don’t expect much in the way of property value growth in QLD but we also do not expect the values to fall too much further. However, any large moves in the Australian dollar could greatly impact the market.