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Brisbane Property Market Update March 2021

 

This article will highlight what has been happening in the Brisbane Property Market during March 2021.

 

Housing market values across Australia continued to surge throughout March 2021, and Brisbane was no exception.  With the fastest rate of monthly growth recorded in Brisbane for several years, perhaps it is finally time for Brisbane to shine?  There are a broad range of positive factors that continue to drive this rapid price escalation within Brisbane.  This update will unpack what is happening right now and why.

 

With record low interest rates as well as improving economic conditions that continue to beat forecasts, it certainly is looking a lot brighter in the housing markets throughout the country than what was predicted 12 months ago.  But what has happened in the last month that continues to support this rapid price growth in Brisbane?

 

Firstly, the Reserve Bank of Australia have clearly stated that interest rates will not be rising again until we have inflation back within the target range of 2 to 3%.  Interest Rates are at record low levels and for many property buyers, it has never been cheaper than now to borrow funds to buy.  During March we saw more big banks cut their fixed rates.  First home buyers are getting into the market because it is often cheaper to buy then rent.  Home buyers are upgrading due to cheap money, and investors are returning to the market – driven by cashflows not previously seen due to lower overall holding costs. 

 

We have now seen the end of the fiscal support provided by the Federal Government through Job Keeper arrangements.  Many predicted that this would mark the time when property values would plummet.  However, loans on deferral fell to just $14 billion (or 0.5% of total loans) in February, according to APRA’s latest figures.  It is fairly safe to assume that the systemic risk may have now passed.

 

Lending standards remain relatively tight also.  If you have tried to seek funding you would know how rigorous the process seems to be.  Whilst there has been a modest increase in the market share of higher LVR loans due to the success of the First Home Loan Deposit Scheme (FHLDS), lending is still much tighter than it used to be.

 

Also, job ads have surged to the highest level since 2008 according to ANZ.  ABS Data has confirmed that Queensland has outperformed many other states on the jobs front, with a record high 53,500 job vacancies, so it is a very opportunistic time for job seekers to be looking for work in our State.

 

Off the back on the Homebuilder stimulus provided by the Federal Government, which has now ended, we saw a high increase in dwelling approvals in Queensland in February, up by 40.5%.  This helps us to understand that more future supply is on its way, and it is important to understand where this is going to be built throughout Greater Brisbane so that we can understand the local impact on supply and demand in certain pockets around our city.

 

So overall, the economic outlook looks bright.  It is not surprising that this is translating into high buyer demand and strong property price growth in Brisbane.  Let’s take a closer look at what is happening through the city.

 

 

Brisbane Property Market Prices

 

According to the latest Hedonic Home Value Index data by Corelogic, dwelling values in Brisbane saw an overall median monthly price rise of a 2.4% over the month of March 2021.  The current median value for dwellings across Greater Brisbane is $548,260 which is $12,642 higher than just one month ago. 

 

The quarterly growth in dwelling values across Greater Brisbane is now 4.8% and annual growth for the last 12 months is now 6.8%. 

 

Brisbane Property Market Update March 2021

 

 

The premium end of the housing market is still leading the acceleration in capital gains throughout Brisbane.  Upper-quartile property values rose at nearly triple the rate (+3.1%) of lower quartile property values (+1.1%) throughout March, according to Corelogic data. 

 

Brisbane House Prices

 

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 2.6% across the month of March 2021.  The 12 month change in Brisbane house prices has been 7.9%.   The current median value for a house in Greater Brisbane is $607,969, the highest it has ever been and $14,737 MORE than one month ago.

 

Brisbane House Prices

 

Brisbane Unit Prices

 

The Unit Market in Brisbane saw some more positive growth in the median value this month with another increase of 1% in March 2021.  The 12 month growth for units across Brisbane is now 1.9%, which seems to confirm that this market is not in recovery stage.   The current median unit price in Brisbane is $400,866, which is $4,683 more than one month ago.

 

Brisbane Unit Prices

 

Brisbane Rental Market Movements

 

The Vacancy Rate in Brisbane as a whole, tightened yet again between January and February 2021, and now sits at 1.5%.    The table below highlights where vacancy rates across Brisbane sit at the end of February 2021.

 

Region Vacancy Rate February 2021

(change from January 2021)

Beenleigh Corridor 0.6% (-0.1%)
Brisbane CBD 5.2% (-0.4%)
East Brisbane 1.2% (-0.2%)
Inner Brisbane 3.1% (-0.4%)
Ipswich 0.9 % (-0.2%)
Northern Brisbane 0.7% (-0.2%)
South East Brisbane 0.6% (-)
Southern Brisbane 1.6 (-0.1%)
West Brisbane 1.3% (-0.2%)

Source: SQM Research

 

Vacancy rates are generally very tight through Greater Brisbane.  At a suburb level there are still some higher risk areas and the breakdown of regions shows where some of these locations might lie.  Vacancy risk within the Brisbane CBD continues to show a rapid recovery.  With every region showing a further reduction in vacancy rates between January and February 2021, except for South East Brisbane, it is clear that a rental crisis is pending.

 

Rents in the unit market in Brisbane are now on the way up, stimulated by tight supply.  We are seeing upward pressure on rents with the annual change in unit rents now at 1.1% across the city. 

 

Housing rents continue to see strong growth, due to the tightening vacancy and also due to higher levels of interstate migration.  Everyone needs a place to call home and we are seeing high competition for quality rental properties throughout the City.  The annual increase in rents for Brisbane Houses is now 5.2% according to Corelogic Data.

 

Brisbane Rent Prices

 

 

What did we see on the ground across Brisbane during January 2021?

 

Open homes were still heavily populated with strong attendance observed throughout the month of March.  Line ups were still evident at most properties at the first open for inspection.  Most properties listed by private treaty only required one inspection before it became a multiple offer situation with so many properties selling fast with more than 10-12 offers for vendors to consider.

 

It really is crazy out on the ground!  Competition is fierce and many buyers are taking big risks just to secure a property.  We have seen buyers putting forward unconditional offers in an attempt to beat the competition.  Being I a position to move fast and with good conditions is a huge advantage in the current market.

 

We are also seeing the timeframe for Auction campaigns reduce.  Traditionally we would see 4-week auction campaigns in Brisbane.  Now we are seeing some Agents run 2-week campaigns.   There seems to be enough buyers to justify this without waiting for all buyers to obtain finance approval to be in a position to bid under auction conditions. 

 

It certainly is interesting times.

 

The months ahead …

We believe it is Brisbane’s time to shine.  There are simply too many buyers in the market to see any slow down in price growth any time soon.  We would need to see a huge increase in the number of listings to see a slow-down in price growth.  This is because there is a lot of buyer demand that needs to be absorbed before there is a better balance between supply and demand in our city.

 

Brisbane buyers are feeling optimistic and confident.  They are making huge property buying decisions very quickly.  Brisbane is currently a strong seller’s market and prices are on the rise.  In fact prices are rising, but they are also accelerating with more rapid price growth every month since the start of 2021. 

 

Will this slow down?  It has to slow down eventually because this rate of price growth is unsustainable.  But we are seeing no signs of slow down on the ground yet so only time will tell.

 

 

 

 

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