Brisbane Property Market Update September 2021

Brisbane Property Market Update September 2021

This article will highlight the Brisbane Property Market Update September 2021.

Throughout September, the residential property market in Brisbane remained robust with growth still very strong, especially in the housing sector. This growth is being fuelled by a number of factors contributing to low supply and high demand. We will run through a few of these things in this market update.

Firstly, the availability of properties to buy (supply) is down. According to CoreLogic data, the total advertised stock in Brisbane is still -28.7% lower up to 29 August 2021, compared to the equivalent period last year. Although new listings over the same period are +8.3% higher in Brisbane, the rapid rate of absorption means there is not a lot that is available to buy in the current market throughout our city.

Secondly, demand is very high. This continues to be supported by the expectation that mortgage rates will remain at record lows for an extended period of time. Brisbane has avoided lockdowns over recent weeks so our local economy continues to thrive. We remain a much more affordable market and now we are seeing investor activity rise with 29.7% of all housing finance commitments throughout July 2021 going to Investors, most likely driven by the higher yields and also strong capital growth prospects.

A recent Annual Investor Sentiment Survey by Property Investment Professionals of Australia (PIPA) confirmed that a staggering 58% of respondents believed that Queensland offers the best property investment prospects over the next 12 months. This is a huge increase off the back of last years’ results where a smaller 36% of investors thought Queensland offered the best investment prospects.

According to data released by realestate.com, year-on-year investor enquiry has increased the most in Brisbane, up 186% compared to the previous 12-month period.

Brisbane property market update September 2021

According to their report, the regions within Greater Brisbane which experienced the highest spike in investor enquiry include Logan, Moreton Bay, Ipswich, and North Brisbane. It was suggested that relative affordability and tight rental markets appear to be piquing investor interest in these areas. This is especially true when comparing Brisbane to other East Coast capital city markets.

Brisbane Property Market Update September 2021

 

Net migration into Queensland throughout 2020 was almost double the decade average, meaning more people needing somewhere to live. Initially, this puts pressure on the rental market, but through our own enquiry we are also seeing a lot of people who want to relocate, buying now before they make the move in the future.

According to ABS data, we had more than 58,000 people move to Queensland during the 6 months to March 2021. The data also showed that there was a shift to regional NSW and regional QLD, but apart from this, Greater Brisbane actually recorded the largest net flow of people into the capital city from March 2020 to March 2021. Perhaps the drivers include people wanting more sun, less traffic, and a more affordable lifestyle.

Brisbane Property Market Update September 2021

With Household Wealth across Australia rising 5.8% in the June 2021 Quarter, to a record high of $13.4 trillion, there seems to be a lot of money available to spend once the national economy opens up. As the vaccinations continue to roll out, and pathways out of lockdowns are being planned, it seems that the future remains bright for Australia on the other side of Covid-19. That said, the Queensland borders are still shut and at some stage, we will need our own pathway forward so that we can operate as one national economy again in the future.

Let’s take a deeper look into the performance of the Brisbane market throughout September 2021.

 

Brisbane Property Market Prices

The latest Hedonic Home Value Index data by Corelogic released on 30 September 2021, has confirmed that the median dwelling value in Brisbane increased a further +1.8% over the month of September. This is slightly lower than the dwelling growth that was experienced in Brisbane throughout July and August, which suggests a slight slow down in the momentum of price growth across the city. The current median value for dwellings across Greater Brisbane is $625,291 which is $12,914 higher than just one month ago.

The quarterly growth in dwelling values across Greater Brisbane is 5.9%, indicating a slight slowdown since last month, and annual growth for the last 12 months is now 19.9%.

Brisbane Property Advocate

 

The top end of the Brisbane Market is still driving the growth as you can see in the CoreLogic Data below. This shows that the strongest growth in dwelling values occurred in the top 25% of values in the three months to August 2021, with 6.9% growth in that market segment (no change in this growth compared with the three months to the end of July) compared to 4.3% growth in the lowest 25% of values across the city (again no change in this growth since the end of July). Whilst both the highest value and lowest value segments of the market continue to show growth over the last 3 months, the rate of growth at the top end continues to outperform when comparing the month-on-month trends.

Brisbane Property Market Update September 2021

 

Brisbane House Prices

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 2.0% across the month of September 2021 which is slightly below the 2.1% growth in August. Prior to that monthly growth was trending at 2.2% throughout May, June, and July, so there has been a slight reduction over August and again during September. The 12 month change in Brisbane house prices has been 22.2%. The current median value for a house in Greater Brisbane has now broken the $700,000 threshold. It is currently $709,136, the highest it has ever been. This is $17,922 MORE than one month ago!

Buyers Agent Brisbane

 

Brisbane Unit Prices

The Unit Market in Brisbane saw a reversal in the momentum of price growth this month, after a pick up in the momentum of growth throughout August. September saw an increase of +0.6% growth for units in Greater Brisbane, compared to +1.4% last month. The 12-month growth for units across Brisbane is now +8.8%. The current median unit price in Brisbane is $430,000, which is $4,223 more than one month ago.

Brisbane property Market Update September 2021

 

Summary of Price Growth in Brisbane for the Year to Date

The graph below charts the % change in property values for Houses and Units since January 2020 for both houses and units in Greater Brisbane.

Buyers Agent Brisbane

 

The trendlines here continue to show that the housing sector is outperforming the unit sector on a month-to-month basis. This has been the case every month since October 2020. Whilst the housing sector has experienced fairly consistent growth of between 2% and 2.2% over the last 5 months, the unit sector has experienced more erratic price growth on a month-to-month basis.

Below we have charted the actual median values for Houses and Units across Greater Brisbane since January 2021. You can see Houses have clearly outperformed Units when breaking the growth down into different asset types in Brisbane.

Brisbane Property Market Update September 2021

 

Brisbane Rental Market Movements

Vacancy Rates at a city-wide level in Brisbane remained unchanged between July and August, staying at 1.3%. They have tracked sideways remaining unchanged since May this year. The table below highlights where vacancy rates across Brisbane sit at the end of August 2021.

Region Vacancy Rate August 2021
(change from July 2021)
Beenleigh Corridor 0.5% (-0.1%)
Brisbane CBD 4.6% (+0.1%)
East Brisbane 1.3% (-)
Inner Brisbane 2.3% (+0.1%)
Ipswich 0.8% (-0.1%)
Northern Brisbane 0.7% (-)
South East Brisbane 0.8% (+0.1%)
Southern Brisbane 1.4% (-)
West Brisbane 1.2% (-)

Source: SQM Research

 

The Brisbane CBD remains slightly elevated, which was a trend that emerged last month. This contrasts with the trends we have been witnessing in the months prior. Otherwise, vacancy remains tight across the city. There is still not enough stock to provide rental accommodation to tenants who need a home, especially in the middle and outer ring locations of Greater Brisbane. This continues to put upward pressure on rent prices throughout the city, more so for houses than units.

Housing rents have experienced annual growth in Brisbane of 10.8% according to CoreLogic Data, which is a further +0.7% more than a month ago.

Rental incomes in the unit market throughout Brisbane have seen an annual increase of 6.2% up +0.6% compared to last month.

Gross rental yields for dwellings across all of Greater Brisbane according to CoreLogic remained at 3.9% throughout September. This is the same as last month, so there was no further record low this month.

Best Buyers Agent Brisbane

 

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

One thing we are noticing on the ground is the level of competition at auctions at various locations around the city. Most of the properties that are selling by auction are achieving a very good price as buyers compete in a transparent environment to secure properties throughout Brisbane. It seems buyers are becoming a bit more comfortable with the auction bidding process, which traditionally has not ever been the most common way to buy properties here in Brisbane.

We are hoping to see a few new listings coming to the market now that school holidays are over and the Spring selling season is in full swing. Many Agents are a bit more optimistic about what is coming soon, so perhaps there might be more to choose from in the near future?

Buyer demand is still very strong and the depth of buyers in some areas remains extremely high. When you put forward an offer on a property, and you are one offer amongst 20-30 other offers, you know you are targeting a high-demand home! It looks like the multiple offer situation is here to stay for some time yet for properties that are listed for sale on the major real estate portals.

The speed of the market remains fast also, with most quality properties still selling after the first weekend of open homes. The only instance where this does not appear to be the case is where vendor expectations are ahead of the market – which sometimes starts to happen when prices are escalating so rapidly. When a vendor receives multiple offers but does not accept any of them, it is a sign that they may need to adjust their expectations.

 

The months ahead …

Based on our current level of buyer enquiry, as well as the number of active buyers still out on weekends inspecting, bidding, and making offers on properties available for sale, we do not see any slow down in sight for Brisbane at this stage.

For price growth to really slow down, we need to see a huge increase in the number of properties available for sale, or a huge decline in the number of active buyers in the market. We can not see either of these scenarios playing out in the near future and therefore we expect the trend in property price growth to remain positive and strong for the foreseeable future.

For some, this rapid price growth seems unsustainable. But for others who have been waiting patiently for this growth since the last strong price growth cycle in Brisbane, we remain more optimistic. With such a bright future for Brisbane with its pipeline of infrastructure projects and an Olympic Games to look forward to, the property market looks set to benefit into the future.

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Brisbane Property Market Update August 2021

Brisbane Property Market Update August 2021

This article will update on the Brisbane Property Market during August 2021.

This month started with the short sharp lockdown throughout Brisbane, so buyer and seller activity stalled until the second week of the month.  Brisbane Property Market Update August 2021 saw a lot of Agents held back their new listings until the lockdown was over, but buyers were back out and active from the first weekend after lockdown was lifted and the backlog of new listings came through in the remaining weeks throughout August. The month has remained strong in terms of price growth in both the housing and unit sectors of the Brisbane market, despite nationwide headlines suggesting that property markets are losing steam.  This is simply not the case here in Brisbane.

Transaction activity across Brisbane is strong. According to CoreLogic, sales volumes in Brisbane rose 47.5% in the year to July 2021, an annual change that reflects the heightened demand from buyers across the city.

Whist new listings have increased 5.3% in Brisbane compared with the equivalent period last year, total listings are down -29.1% according to CoreLogic.  What this means is that more buyers are making compromises and buying properties that may have been on the market for longer.

CoreLogic also tracks the number of sales that have taken place over a given period by the number of new listings added to the market over the same time. For the past decade, the ratio has averaged 0.9, suggesting that for each listing added to the market, there was just under one transaction that took place. Now, this ratio is tracking at 1.4 nationally over the three months to July 2021, and 1.3 in Brisbane.

Even auction clearance rates in Brisbane are tracking at record highs.  At the same time last year our clearance rates tracked between 35% and 58% throughout August, but this year the clearance rates during August according to Domain are tracking between 73% and 80% in Brisbane, which really is astonishing for our city.

Investors are making up 26.6% of all housing finance commitments in Queensland, which is slightly less than last month. This is indicative of a further lift in lending to owner occupiers, but not first home buyers whose lending commitments are also falling, comprising only 26.3% of all owner occupier housing commitments across the State.

It really is not a surprise that demand continues to grow given mortgage rates are so low. They have fallen by about 110 basis points since July 2019.  This means that housing interest payments as a percentage of household incomes have declined from a peak of 10.6% in 2008 to now just 4.7% across Australia. Mortgage stress is not something that a lot of households have to worry about at the moment.

Despite concerns that mortgage rates were tipped to increase due to the better-than-expected economic recovery at the beginning of 2021, this now looks less likely given the extended lockdowns throughout New South Wales, Victoria, and the Australian Capital Territory. Mortgage rates are one of the most important determinants of housing demand, so with the RBA likely to facilitate a low-rate environment for some time yet, buyer demand is unlikely to taper off in the near future.  This is especially true for Brisbane, and South-East Queensland as a whole, where we continue to see an influx of interstate migrants which is putting even more upward pressure on the demand for housing to rent and to buy.

Let’s take a deeper look into the performance of the Brisbane market throughout August 2021.

Brisbane Property Market Update August 2021 –  Prices

The latest Hedonic Home Value Index data by CoreLogic released on 31 August 2021, has confirmed that the median dwelling value in Brisbane increased a further +2.0% over the month of August.  This is equivalent to the dwelling growth that was experienced in Brisbane throughout July, so there is no change in the momentum of price growth across the city.  The current median value for dwellings across Greater Brisbane is $612,377 which is $13,672 higher than just one month ago.

The quarterly growth in dwelling values across Greater Brisbane is now 6.1%, suggesting a slight pick up again since last month, and annual growth for the last 12 months is now 18.3%.

Brisbane Property Market Update August 2020

The top end of the Brisbane Market is still driving the growth as you can see in the CoreLogic Data below.  This shows that the strongest growth in dwelling values occurred in the top 25% of values in the three months to July 2021, with 6.9% growth in that market segment (up from 6.4% since the end of June) compared to 4.3% growth in the lowest 25% of values across the city (up from 3.8% last month).  Whilst both the highest value and lowest value segments of the market continue to show growth over the last 3 months, the rate of growth at the top end continues to outperform when comparing the month-on-month trends.

Brisbane Property market Update August 2021

Brisbane Property Market Update August 2021 – House Prices

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 2.1% across the month of August 2021 which is just below the growth that we have been experiencing in the housing sector throughout Greater Brisbane for the last 3 months.  Monthly growth has been trending at 2.2%, so there has been a slight reduction in August compared to the preceding 3 months. The 12 month change in Brisbane house prices has been 20.2%.  The current median value for a house in Greater Brisbane is $691,214, the highest it has ever been. This is $16,476 MORE than one month ago!

Brisbane Property Market Update August 2021

Brisbane Property Market Update August 2021 – Unit Prices

The Unit Market in Brisbane saw further positive growth in the median value this month, and a further pick up in the momentum of that growth also.  July saw an increase of +1.4% growth for units in Greater Brisbane, compared to +0.8% last month. The 12 month growth for units across Brisbane is now +8.9%. The current median unit price in Brisbane is $425,777, which is $6,635 more than one month ago.

Brisbane Property Market Update August 2021

Summary of Price Growth in Brisbane for the Year to Date

The graph below charts the % change in property values for Houses and Units since January 2020 for both houses and units in Greater Brisbane.

Brisbane Property Market Update August 2021

The trendlines here show clearly that the housing sector has outperformed the unit sector every month since October 2020.  Whilst the unit sector saw a loss of price growth momentum between May and June, this seems to have recovered throughout July and August. 

Below we have charted the actual median values for Houses and Units across Greater Brisbane since January 2021.  You can see Houses have outperformed Units when breaking the growth down into different asset types in Brisbane.

Property Buyers Brisbane

Brisbane Property Market Update August 2021 – Rental Property and Movements

Vacancy Rates at a city-wide level in Brisbane remained unchanged between June and July, staying at 1.3%.  The table below highlights where vacancy rates across Brisbane sit at the end of July 2021.

Region Vacancy Rate June 2021
(change from May 2021)
Beenleigh Corridor 0.6% (-)
Brisbane CBD 4.5% (+0.6%)
East Brisbane 1.3% (+0.1%)
Inner Brisbane 2.2% (+0.1%)
Ipswich 0.9% (+0.1%)
Northern Brisbane 0.7% (-)
South East Brisbane 0.7% (+0.1%)
Southern Brisbane
1.4% (-0.1%)
West Brisbane 1.2% (-)

Source: SQM Research

There was a small spike in vacancy this month in the Brisbane CBD, which contrasts with the trends we have been witnessing in previous months.  This is something we will be monitoring over the coming months.  Otherwise, vacancy remains tight across the city.  There simply are not enough investment properties in Brisbane at the moment for the number of tenants looking for somewhere to live.  This continues to put upward pressure on rent prices throughout the city.

Rental incomes in the unit market throughout Brisbane have seen an annual increase of 5.6%, up a full +1.0% compared to last month. 

Housing rents are still climbing too, with the annual increase in rents for Brisbane Houses now at 10.1% according to CoreLogic Data, which is +0.7% higher than a month ago.

The table below shows the changes in rents for All Houses in each region as well as the change in rents for 2 bedroom units. 

Region All Housing Rent Changes  Last 12 months 2 Bedroom Units Rent Changes Last 12 months
Beenleigh Corridor +12.6% +6.2%
Brisbane CBD +9.7% +5.9%
East Brisbane +15.1% +4.5%
Inner Brisbane +11.9% +4.5%
Ipswich +8.3% +7.3%
Northern Brisbane +12.2% +2.9%
South East Brisbane +6.4% +1.7%
Southern Brisbane
+10.7% +7.5%
West Brisbane +10.9% +9.4%

Source: SQM Research

Gross rental yields for dwellings across all of Greater Brisbane are compressing even further with escalating dwelling prices outpacing rent price growth.  According to CoreLogic, at a city-wide level, gross rents have dropped again this month to 3.9%, down a further -0.1% from last month.  This is a new record LOW for Brisbane. 

Property Advocate Brisbane

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

During the lockdown at the beginning of the month, the Brisbane real estate market went quiet which is typical of what we have experienced in other lockdowns.  Whilst private inspections were still possible, these were not encouraged given the risks associated with the transmission of the Delta variant of Covid-19.

Once lockdown ended however, it was business and usual. Open homes on the weekends since that our team have attended have been popular. As expected, the demand returned to pre-lockdown levels almost immediately after Brisbane opened back up.
Everything we have purchased for clients that has been listed for sale has gone under contract with multiple buyers submitting offers.  In almost all instances this is also still after the first open home unless the Agent specifically sets a timeframe for when offers are closing which is sometimes a few days after.  Auctions have remained partly online, and others have been conducted in person once again.  But clearance rates remain high and prices achieved remain strong based on what we have been experiencing throughout the month. 

Buyers are becoming increasingly stressed and frustrated.  Many don’t understand the pace of the market and what they need to pay to secure a quality home or investment.  That sense of missing out becomes disheartening, especially when there is such a small number of options available for buyers to choose from.

 

Brisbane Property Market Update August 2021 – The months ahead …

Heading into Spring we expect conditions to remain unchanged throughout Brisbane.  Normally at this time of the year, we see new listing numbers starting to ramp up.  Whilst new listings are starting to show some more positive signs, there does not seem to be enough properties available for the number of buyers in the market right now.

We still see Brisbane property values climbing substantially in the immediate future based on the real-time indicators we are assessing each week. 

Time will tell how long this boom lasts. But we have waited a long time for this in Brisbane and it is finally here!

 

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Brisbane Property Market Update July 2021

Brisbane Property Market Update July 2021

In this Brisbane Property Market Update July 2021, we have some amazing news! Brisbane is now officially going to be an Olympic City and how exciting is that! The plans can finally be set in concrete for the transformation of our city, which will include the fast-tracking of important infrastructure which will benefit the residents for many years to come. This is an extremely exciting time for Brisbane and the city that it will now become in the years ahead.

From a property price movement perspective, Brisbane is bucking the national trend in terms of house price growth in recent months. Our city is one of few capital city markets in Australia that has maintained growth momentum in housing values. Whereas the larger markets of Sydney and Melbourne have seen price growth slowing in the last 3 months, this is not the case in Brisbane in the housing sector. Even though the rate of growth has eased in other markets, housing values are continuing to rise substantially faster than average so market conditions nationwide are still very good.

Research director of CoreLogic, Tim Lawless, has attributed the loss of steam in the Sydney and Melbourne markets since March to several factors, one of which is declining affordability. With Brisbane’s median dwelling values at $598,615, we remain a much more affordable market compared with Sydney’s median dwelling value of $1,017,692 and Melbourne’s median dwelling value of $762.068. Even Hobert and Canberra are more expensive markets than Brisbane with their respective median dwelling values being $621,102 and $793,872 according to the latest Corelogic data released on 2 August 2021.

Of course, there are also some negative impacts on consumer sentiment due to the extended lockdowns in Sydney, and this is something we all must consider in the months ahead as we deal with the Delta variant of COVID-19 within our communities. Even so, from our experience from past lockdowns throughout the country, we are seeing a trend whereby buyer and seller activity reduces during the event but recovers quickly to pre-lockdown levels once restrictions are lifted.

Any potential for interest rates to rise in the near future looks less likely now that the recent lockdowns have seen Australia’s economy slow down, and this is now likely to keep rates on hold for a longer period of time. Any lift in the cash rate seems extremely unlikely for at least the next 18 months, and according to the RBA the forecast is not to see any movement until 2024 at the earliest. This is going to ensure ongoing demand for housing given the low cost of money in the current economic environment.

We are still seeing more investors enter the market with lending data now showing 26.8% of all housing finance commitments in Queensland going to investors. Whilst this is still a smaller proportion, there is definitely a trend that is shifting higher.

Employment growth in Queensland is leading the nation with an additional 235,000 employment opportunities by June 2021 throughout the state according to ABS data. This may also be due to the lockdowns in both Sydney and Melbourne recently. With Brisbane also entering a new lockdown due to the Delta COVID-19 variant, we will be watching to see if this has any impact on these employment trends in the future.

Looking at the mismatch between demand and advertised supply, we can still see why Brisbane markets are strong. Sales volumes have increased 44% in Brisbane over the 12 month period leading up to June 2021, whereas total listing volumes had declined -25.9% across the same period according to CoreLogic. This provides some clarity as to why the pace of price growth has been so strong in recent months through the city.

Let’s take a closer look into the performance of the Brisbane Property Market Update July 2021.

 

Brisbane Property Market Update July 2021 – Price Growth

The latest Hedonic Home Value Index data by Corelogic released on 31 July 2021, has confirmed that the median dwelling value in Brisbane increased a further +2% over the month of July. This is back to the dwelling growth that was experienced in Brisbane throughout May, after only a very slight dip to +1.9% growth throughout June.  The current median value for dwellings across Greater Brisbane is $598,615 which is $12,473 higher than just one month ago, and $95,991 higher since the same Corelogic results were published 12 months ago.

The quarterly growth in dwelling values across Greater Brisbane is now 6.0%, suggesting a slight pick up again since last month, and annual growth for the last 12 months is now 15.9%.

Brisbane Property Market Update July 2021

The top end of the Brisbane Market is still driving the growth as you can see in the CoreLogic Data below.  This shows that the strongest growth in dwelling values occurred in the top 25% of values in the three months to June 2021, with 6.2% growth, compared to just 3.8% growth in the lowest 25% of values across the city.  

Brisbane Property Market Update july 2021

Interestingly, the number of people who are highly engaged with unit listings has been higher across Queensland compared with house listings. This is in contrast to what we have observed by being on the ground at inspections where anecdotally we are seeing more buyers attending open homes for houses than units – especially in Brisbane.

 

Brisbane Property Market Update July 2021 – House Prices

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 2.2% across the month of July 2021 which is CONSISTENT with the growth that we experienced in the housing sector throughout Greater Brisbane for the last 2 months.  The 12 month change in Brisbane house prices has been 17.7%.   The current median value for a house in Greater Brisbane is $674,738, the highest it has ever been.  This is $17,187 MORE than one month ago and $98,400 more than at the beginning of 2021.

Brisbane Property Market Update July 2021

 

Brisbane Property Market Update July 2021 – Unit Prices

The Unit Market in Brisbane saw further positive growth in the median value this month, as well as a slight pick up in the momentum of that growth as well.  July saw an increase of +0.8% growth for units in Greater Brisbane, compared to +0.7% last month.  The 12 month growth for units across Brisbane is now +7%.   The current median unit price in Brisbane is $419,142, which is $3,607 more than one month ago and $28,357 more than at the beginning of 2021.

Brisbane Property Market Update July 2021

 

Summary of Price Growth in Brisbane for the Year to Date

The graph below charts the % change in property values for Houses and Units since January 2021 for both houses and units in Greater Brisbane.

The trendlines here show clearly that the housing sector has not yet seen any slow down in price growth over the past 4 months. The unit sector saw a loss of price growth momentum between May and June, which seems to have recovered in July.

Brisbane Property Market Update July 2021

Both sectors are still appreciating in value, but houses have shown more superior growth since the beginning of the year, compared to units.

Brisbane Property Market Update July 2021

 

Brisbane Property Market Update July 2021 – Rental Property and Movements

Vacancy Rates in Brisbane remained unchanged between May and June, staying at 1.3% city-wide. The table below highlights where vacancy rates across Brisbane sit at the end of June 2021.

Region Vacancy Rate June 2021
(change from May 2021)
Beenleigh Corridor 0.6% (-)
Brisbane CBD 3.9% (-)
East Brisbane 1.2% (+0.1%)
Inner Brisbane 2.1% (-0.1%)
Ipswich 0.8% (-)
Northern Brisbane 0.7% (-)
South East Brisbane 0.6% (-)
Southern Brisbane
1.5% (+0.1%)
West Brisbane 1.2% (-)

Source: SQM Research

The current vacancy rates in each region are extremely tight across the city.  Even the Brisbane CBD is seeing current vacancy rates back at levels seen in March 2020 before the pandemic.  Tight vacancy rates like this are putting upward pressure on rents as evidenced in the rental data below. 

Rental incomes in the unit market throughout Brisbane during July have seen an annual increase of 4.6%, up 0.8% compared to last month. 

Housing rents, are still climbing faster, with the annual increase in rents for Brisbane Houses now at 9.4% according to CoreLogic Data, which is 1% higher than a month ago.

Gross rental yields for dwellings across all of Greater Brisbane are compressing with escalating dwelling prices outpacing rent price growth.  At a city wide level, gross rents have dropped slightly to 4.0%in July, down -0.1% from last month.  This is still very attractive compared to Sydney at 2.5% and Melbourne at 2.8%.

Brisbane Property Market Update July 2021

 

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

Not much has changed on the ground throughout July, compared to June. The excitement of the Olympics announcement is evident for many residents, although this may take some time to filter through in terms of how it may shape our city in the years ahead.

Buyers have still been very active throughout July and open homes have been well attended, both on Saturdays and also mid-week.  With the most recent lockdown, we expect the momentum to pause, but we do not expect at this stage that the buyers will disappear. Like previous lockdowns, we expect the demand to match the pre-lockdown levels as soon as everything opens back up.

There is still not much selling without multiple buyers submitting offers, and most properties are still selling after the very first open home. The only exception is when there is an auction campaign in place, which usually involves a 3-4 week campaign, but recently we have seen auction campaigns reduce to as little as 7 days.

For buyers, it is a stressful and frustrating time. As prices escalate, buyers are having to either adjust their expectations or increase their budget every month if they intend to stay in the same areas. 

On the ground, it really is a frenzy in many locations across the city. There are simply too many buyers for the available stock that is coming to the market.  Buyers are paying a premium just to secure a decent property at the moment, but with the depth of buyers, this is not something we expect to see slowing down any time soon.

 

Brisbane Property Market Update July 2021 – The months ahead …

Our position remains the same as last month in that we do not expect any slow down in the momentum of Brisbane housing price growth in the foreseeable future.  Even with the temporary lockdown, we expect that the pent-up demand will continue as soon as things open back up throughout South East Queensland.  The current Delta outbreak in the city will not impact the fundamental imbalance that we have between supply and demand that is putting such strong upward pressure on prices.

Hold on for the ride everyone … Brisbane really is on fire.  It is a very exciting time for our City!

 

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Brisbane Property Market Update June 2021

Brisbane Property Market Update June 2021

Activity throughout Brisbane in June remained high in the residential property market, which is not a surprise. Brisbane is now amongst the top ten most liveable cities in the world according to the Economist Intelligence Unit (EIU), and rightly so. Our city offers an amazing sub-tropical lifestyle where even in winter the sun shines and our outdoor lifestyles bustle. Keep reading to understand the Brisbane Property Market Update for June 2021.

It is no wonder that the demand for property across the city is still strong. At a national level, the headlines suggest that the momentum for property price growth is starting to slow, but in the Brisbane housing sector, this is not the case.

With net interstate migration into Queensland exceeding 30,000 in 2020 (the first time since 2005), this was by far the fastest population growth rate of all capital cities around Australia. Employment also surged to a record high in Queensland with the unemployment rate for the State now sitting at 5.4%. There are still some further improvements that we hope to see here in the coming months. With an increase in total job advertisements in Queensland of +154% over the year, there may be further uptake in the months ahead.

After seeing a spike in demand throughout February and March, the REA Insights Weekly Demand index has been fairly steady since April 2021 across Queensland. This Index measures the number of people who are highly engaged with buy listings on realestate.com.au compared to a baseline which is calculated as being the 52-week static average for the 2019 year.

Brisbane Property Market Update June 2021

Interestingly, the number of people who are highly engaged with unit listings has been higher across Queensland compared with house listings. This is in contrast to what we have observed by being on the ground at inspections where anecdotally we are seeing more buyers attending open homes for houses than units – especially in Brisbane.

In terms of apartment supply forecasts for Brisbane, the table below shows where we are in the pipeline of new developments.

Brisbane Property Market Update June 2021

With long time frames for planning, marketing, and construction for large apartment projects, the next wave of supply is still some time away for Brisbane. In the meantime, the market will tighten further, particularly after borders re-open and international migration resumes.

For property investors, the latest tax office figures have confirmed that there are fewer landlords who are negatively gearing their properties. This is because with interest rates so low, in many cases the rental income from the investment is sufficient to pay down the investment debt. This builds up the equity position in a property and provides a good buffer for any future potential increase in interest rates.

And with the Australian economy rebounding so quickly, there are now some economists who believe that interest rates could rise before 2024. Whilst there is no suggestion this is likely from the RBA, it is always a possibility. It does look like interest rates might have reached their lowest point.

So the outlook is definitely still bright for Brisbane. Let’s see how our local market performed over the last month.

 

Brisbane Property Market Prices

The latest Hedonic Home Value Index data by CoreLogic released on 30 June 2021, has confirmed that the median dwelling value in Brisbane increased 1.9% across June. This is just slightly lower than the dwelling growth in Brisbane throughout May (+2.0%) which some might assume means that the price growth is losing some momentum throughout Greater Brisbane. The current median value for dwellings across Greater Brisbane is $586,142 which is $11,570 higher than just one month ago, and $64,456 higher since the CoreLogic results were published at the beginning of the year on 4 January 2021. 

The quarterly growth in dwelling values across Greater Brisbane is now 5.7%, suggesting a slight slow down since last month, and annual growth for the last 12 months is now 13.2%.

However, it is important to always break down the dwelling data into the housing and unit sectors as each of these types of dwellings has performed differently over recent months.

Brisbane Property Market Update June 2021

 

Brisbane House Prices

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 2.2% across June 2021 which is CONSISTENT with the growth that we experienced in the housing sector throughout Greater Brisbane last month. The twelve month change in Brisbane house prices has been 14.8%. The current median value for a house in Greater Brisbane is $657,551, the highest it has ever been. This is $15,824 MORE than one month ago and $154,403 more than 12 months ago.

Brisbane Property Market Update June 2021

The breakdown of the median data into the price segments of the market in Brisbane provides further insights into the price spread of houses around our City. The graph below shows house values for the 25th and 75th percentile prices in Brisbane, compared to other locations around Australia.  This shows a graphic representation of how affordable the Brisbane market still is compared to Sydney, Melbourne and ACT, with our 75th percentile value (ie: the top 25% of house prices) sitting BELOW the 50th percentile value (ie: overall median value) of Melbourne, and ACT and below the 25th percentile value of Sydney.

 

Brisbane Unit Prices

The Unit Market in Brisbane saw further positive growth in the median value this month, although a slow down in the momentum of that growth is evident within this sector. June saw an increase of 0.7% growth for units in Greater Brisbane. The twelve month growth for units across Brisbane is now 5.7%.  The current median unit price in Brisbane is $415,536, which is $3,782 more than one month ago and $28,116 more than 12 months ago.

Brisbane Unit Prices

When we compare the Unit prices in Brisbane with other capital cities we find that our median Unit price is equivalent to the lowest 25th percentile of unit values in ACT and Hobart, and much lower than the 25th percentile for Melbourne and Sydney. Again, this demonstrates how affordable Brisbane units are compared to units throughout other capital cities around Australia.

Unit Affordability in Brisbane

 

Summary of Price Growth in Brisbane for the Year to Date

The graph below charts the % change in property values for Houses and Units since January 2021 for both houses and units in Greater Brisbane.

The trendlines here show clearly that the housing sector has not yet seen any slow down in price growth over the past 3 months, however, the unit sector has started to see a loss of price growth momentum over the last month.

Both sectors are still appreciating, but houses have shown a more superior growth since the beginning of the year.

 

Brisbane Rental Property Market Update and Movements

Vacancy Rates in Brisbane tightened further throughout June moving from a city-wide vacancy rate of 1.4% in April to 1.3% in May. The table below highlights where vacancy rates across Brisbane sit at the end of May 2021.

Region Vacancy Rate May 2021
(change from April 2021)
Beenleigh Corridor 0.6% (+0.1%)
Brisbane CBD 3.9% (-0.5%)
East Brisbane 1.1% (-)
Inner Brisbane 2.2% (-0.2%)
Ipswich 0.8% (-)
Northern Brisbane 0.7% (-0.1%)
South East Brisbane 0.6% (+0.1%)
Southern Brisbane
1.4% (-0.1%)
West Brisbane 1.2% (-0.1%)

Source: SQM Research

The current vacancy rates in each region are extremely tight across the city. Even the Brisbane CBD is seeing current vacancy rates back at levels seen in March 2020 before the pandemic. Tight vacancy rates like this are putting upward pressure on rents as evidenced in the rental data below.

Rental incomes in the unit market throughout Brisbane have seen an annual increase of 3.8%, up 1.2% compared to last month.

Housing rents are still climbing faster, with the annual increase in rents for Brisbane Houses now at 8.4% according to CoreLogic Data, which is 1.1% higher than a month ago.

Gross rental yields for dwellings across all of Greater Brisbane have now started to fall with escalating dwelling prices outpacing rent price growth. At a city-wide level, gross rents have dropped slightly to 4.1%, down -0.1% from last month. This is still very attractive compared to Sydney at 2.6% and Melbourne at 2.8%.

Brisbane Property Market Update June 2021

 

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

The Brisbane Property Market Update June 2021, like previous months, has seen the number of buyers continued to exceed the number of sellers, causing most properties to sell with multiple offers throughout the month. The depth of buyers in some pockets of the city is greater than in other pockets, and we are starting to see slightly decreased buyer depth at the lower end of the market.

Towards the top end of the market, however, the buyer depth is still very strong and houses within that top 25th percentile are moving very quickly. Auctions we attended were mostly sold, except for a small number of cases where the vendor’s expectations have now moved ahead of the market. This often happens when prices are escalating rapidly. Clearance rates, according to Domain, moved between 57% and 88% across the month in Brisbane, but every auction we attended had multiple registered bidders – even if it ended up passing in.

It is possible that some buyers are starting to get buyer fatigue and this is causing them to make some very strong offers that are well ahead of the market. We have been seeing this – especially in the middle and top price points. For those that continuously miss out, it is not uncommon to reach a point where getting into the market is more important than trying to buy well. This causes prices to rise as well because, with every new recorded sale, this becomes the new baseline that other buyers make an assessment from.

 

The months ahead …

Our position has not yet changed on the market outlook and we are still optimistic that Brisbane has a lot of steam left which will keep prices escalating into the near future. We have not yet seen a slow down in the number of buyers in the middle and top segments of the market, so demand still outweighs supply in these sectors. We are watching closely for signs that demand is slowing or supply is increasing – but right now neither of these things are happening. For this reason, we expect this price growth momentum to continue, more so for houses than units in Brisbane. We hope you have found our Brisbane Property Market Update June 2021 helpful. 

 

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Brisbane Property Market Update May 2021

Brisbane Property Market Update May 2021

The Brisbane Property Market remains firmly entrenched in a housing boom. The growth is being driven by the most expensive end of the market, growing more than double the rate of the least expensive segment of the market. This is most likely due to the high level of activity in the owner-occupier non-first home buyer segment.

With interest rates still at record lows, buyers are taking advantage of “cheaper than ever” finance and we are seeing huge demand for large family homes in premium locations around the inner-city suburbs.  Investors are also stepping up their activity across Brisbane, motivated by the prospects for continued strong capital growth and also attractive investment yields compared to other large capital city markets around the country.

First home buyer activity is starting to pull back based on lending data, perhaps due to the rapid price growth to date likely impacting on affordability in some locations through the city.

With the local economy continuing to show signs of improvement, interstate migration stronger than ever, consumer confidence remaining high and even business confidence remains strong, we are seeing persistently strong demand for housing across Brisbane.  Auction clearance rates have even been consistently strong every week in Brisbane, yet another sign of a strong housing market throughout the city.  The demand for housing is stronger than we have ever seen in our city.

In fact, Corelogic estimates that sales volumes have increased 25.6% in the Brisbane property market over the 12 months to April 2021. This is a sign that people are buying, and they are buying at a rapid pace.

From the supply side, total listing volumes are still approximately 30% down in Brisbane compared to the same period last year. So, we have a huge number of buyers, competing for less stock.  There is a very large imbalance.

This imbalance between supply and demand is continuing to create urgency for those in the market.  Fear of Missing Out (FOMO) is something we are seeing a lot amongst buyers. Every time a buyer misses out, they get a little less fearful next time and they tend to get a little more desperate as well, often paying top dollar just to get into the market and out of the rat race.

This article will explore what we are seeing throughout Brisbane and also what the most recent data is telling us.

 

Brisbane Property Market Prices

The latest Hedonic Home Value Index data by Corelogic released on 31st May has confirmed that the median dwelling value in Brisbane increased 2.0% over the month of May 2021.  This is a stronger result compared with April (+1.7%) so property price growth is again accelerating throughout Greater Brisbane.  The current median value for dwellings across Greater Brisbane is $574,572 which is $16,277 higher than just one month ago, and $52,886 higher since the Corelogic results were published at the beginning of the year on 4th January 2021.

The quarterly growth in dwelling values across Greater Brisbane is now 6.2% and annual growth for the last 12 months is now 10.6%. 

Index Results May 31, 2021

 

Brisbane Property Market – House Prices

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 2.2% across the month of May 2021.  The 12 month change in Brisbane house prices has been 11.9%. The current median value for a house in Greater Brisbane is $641,727, the highest it has ever been and $19,921 MORE than one month ago.

House prices May 2021

 

Brisbane Property Market – Unit Prices

The Unit Market in Brisbane saw further positive growth in the median value this month with another increase of 1.2% growth in May 2021.  The 12 month growth for units across Brisbane is now 4.2%, definitely a sign that the unit market has bottomed out and is beginning to recover. The current median unit price in Brisbane is $411,664, which is $5,762 more than one month ago.

Unit Prices May 2021

 

Brisbane Property Market – Rental Market Movements

Vacancy Rates in Brisbane tightened further throughout May moving from a city-wide vacancy rate of 1.5% in March to 1.4% in April. The table below highlights where vacancy rates across Brisbane sit at the end of April 2021.

Region Vacancy Rate March 2021
(change from February 2021)
Beenleigh Corridor 0.5% (-0.2%)
Brisbane CBD 4.4% (-0.8%)
East Brisbane 1.1% (-0.1%)
Inner Brisbane 2.4% (-0.5%)
Ipswich 0.8% (-0.2%)
Northern Brisbane 0.8% (-)

South East Brisbane

0.5% (-0.1%)
Southern Brisbane 1.5% (-0.2%)
West Brisbane 1.3% (-0.1%)
West Brisbane 1.4% (+0.1%)

Source: SQM Research

You will see above that every region tightened further between March and April which indicates a rental crisis is looming throughout Greater Brisbane.  This is something that is going to put upward pressure on rents as supply tightens in an environment whereby the demand for rental properties continues to increase.

Already, rents in the unit market in Brisbane have seen an annual increase of 2.6%, up 0.5% compared to last month.

Housing rents, however, are climbing faster, with the annual increase in rents for Brisbane Houses now at 7.3% according to Corelogic Data, which is 0.9% higher than a month ago.

Gross rental yields for dwellings across all of Greater Brisbane remain at 4.2%, which is still well above Sydney at 2.6% and Melbourne at 2.9%.

 

Annual Change in Rents for houses and units May 2021

 

What did we see on the ground across Brisbane Property Market during May 2021?

Not a lot has changed on the ground throughout May 2021. Buyers are still very active at open homes on Saturdays and if you arrive on time to a property, you can expect to line up before you can move inside.  It can be quite tight in some properties, especially when buyers are all attempting to comply with social distancing requirements.

At auctions attended by members of our team, we are seeing a good volume of people registering to bid.  Fewer buyers actually place a bid, possibly because the price escalates too fast and the property becomes out of reach for some early in the bidding process.  Most properties are achieving a good price at auction, especially when only 2 bidders are left and both parties seem to have that “never-give-up” attitude.  When this happens, the price achieved can often be quite inflated.

There has still not been a property that we have considered for our clients where multiple other buyers are also interested.  This is usually the case both on and off-market.  The multiple offer process is becoming mainstream and most buyers who are active in the market are getting better prepared as they know properties are selling after the very first inspection.

 

The months ahead …

We often get asked “is now a good time to be buying in Brisbane?”  The answer to this question requires an understanding of which direction the market is moving and what the likelihood of a market correction in Brisbane is, in the near future.

Based on our observations, the Brisbane property market will continue to grow in the coming months. This is because the demand for property from Buyers still exceeds the number of properties available for sale. When demand exceeds supply, prices rise.

We need to see either buyer numbers significantly drop, or listing volumes significantly increase for the market to slow down. When this happens, we will only see prices fall if the supply of properties exceeds the demand for those properties. This is NOT a situation we envisage any time in the short-term future for Brisbane.

So, if you want to avoid the competition, and sit on the sidelines until the market slows down, you may need a higher budget to buy into the same area that you can afford today.  Alternatively, you may need to look at alternative locations in the future, given you will most likely be priced out of your preferred suburbs due to market growth that will continue to happen between now and when the market starts to slow.

The time to buy – is when you can afford to do so. Don’t let the market conditions dictate the timing, or you may be disappointed in the future.

 

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Brisbane Property Market Update April 2021

Brisbane Property Market Update April 2021

Brisbane Property Market Update April 2021

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

Brisbane property values have continued to climb throughout April in both the housing and unit markets. We are seeing a divergence between the rate of price growth at the upper end of the market, which is growing at a much faster pace, compared to the lower end of the market in Brisbane. This article explores the details in relation to what is really going on in the residential property market throughout our City.

The national economy continues to improve as 2021 rolls through and Queensland itself is showing very robust job opportunities for those seeking employment. There has been a 15.6% increase in the total number of job advertisements throughout our State just in the last month alone. For those concerned about the winding back of JobKeeper, there certainly seem to be other job opportunities emerging.

The V-shaped recovery in labour markets around Australia, is also helping to keep consumer sentiment high. In April, the ANZ-Roy Morgan Consumer Confidence Rating jumped and remained strong. Business confidence also jumped in March to levels we have not seen since 2013-2014. With an economy expanding at a faster than average pace, this is all great
news for continued housing demand for some time yet.

Demand will also be supported by the expectation that interest rates will remain at their record lows for an extended period of time. The RBA are still not expecting to see and change in interest rates until 2024 at the earliest.

Brisbane has seen strong internal migration throughout the 2020 financial year with an additional 13,779 people moving to our great city. With the exception of Perth, who also saw a much smaller 735 new residents in the same period, every other Capital City experienced a loss of interstate migrants. These population movements are contributing to what makes the Brisbane property market quite different, with the extra demand from a
growing population not typical of all areas around the country.

Also the proportion of home loans that remained on deferral at the end of March was just 0.7%. This is now so low that we are not expecting any sign of distressed selling. With the nationwide lift in dwelling values over the last few months, it is less likely that anyone who may still have to sell, will have to sell for a loss, so this also provides a level of reassurance.

With so much positive sentiment, good economic news and the nationwide property recovery, let’s now explore what is happening in Brisbane at a local level.

 

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 1.7% over the month of April 2021.  This is slightly less price growth than we saw in March, which might suggest a deceleration in the rate of price growth, but it also might reflect a greater volume of sales at a lower price point throughout Greater Brisbane across the month (due to the way a median is calculated).  The current median value for dwellings across Greater Brisbane is $558,295 which is $10,035 higher than just one month ago and $36,609 since the start of 2021.

The quarterly growth in dwelling values across Greater Brisbane is now 5.6% and annual growth for the last 12 months is now 8.3%.

Brisbane property market update April 2021

Brisbane House Prices

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 1.8% across the month of April 2021.  The 12 month change in Brisbane house prices has been 9.6%.   The current median value for a house in Greater Brisbane is $621,806, the highest it has ever been and $13,837 MORE than one month ago.

Brisbane Property Market Update April 2021

 

Brisbane Unit Prices

The Unit Market in Brisbane saw further positive growth in the median value this month with another increase of 1% in April 2021.  The 12 month growth for units across Brisbane is now 3%, which supports what we said last month that this market is now in the recovery stage.   The current median unit price in Brisbane is $405,902, which is $5,036 more than one month ago.

Brisbane Property Market Update April 2021

 

Brisbane Rental Market Movements

Vacancies in Brisbane are still very tight with many areas still trending lower at a suburb level.  Between February and March 2021, the city-wide vacancy rate remained unchanged at 1.5%.    The table below highlights where vacancy rates across Brisbane sit at the end of March 2021.

Region Vacancy Rate March 2021

(change from February 2021)

Beenleigh Corridor 0.7% (+0.1%)
Brisbane CBD 5.2% (-)
East Brisbane 1.2% (-)
Inner Brisbane 2.9% (-0.2%)
Ipswich 1 % (+0.1%)
Northern Brisbane 0.8% (+0.1%)
South East Brisbane 0.6% (-)
Southern Brisbane 1.7 (+0.1%)
West Brisbane 1.4% (+0.1%)
West Brisbane 1.4% (+0.1%)

Source: SQM Research

We are seeing many tenants struggle to secure a property with multiple applications being received for most properties that become available for rent.  Prospective tenants are offering landlords over the asking price, or offering to pay 6 months in advance, just to secure a property.  It really is getting desperate in some areas.

Rents in the unit market in Brisbane are continuing to creep up.  The annual change in unit rents now at 2.1% across the city, up a further 1% from last month.

Housing rents continue to see strong growth, with the annual increase in rents for Brisbane Houses now at 6.4% according to Corelogic Data, which is 1.2% higher than a month ago.

With property price growth in Brisbane now outpacing rental price growth, we are starting to see some yields fall.  Gross rental yields for dwellings across all of Greater Brisbane are now at 4.2%, which is still well above Sydney at 2.7% and Melbourne at 2.9%.

Brisbane Property Market Update April 2021

 

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

At the start of April Brisbane was coming out of a short sharp lockdown, and also heading into Easter.  Despite this, on Easter Saturday we were still lining up to get through properties for our clients.

Since then, we have started to observe a small decline in the number of buyers who have been turning up at open homes, but this does not seem to be translating to fewer offers. We are seeing a higher ratio of offers being made for the number of buyers who are attending the open homes, indicating that qualified buyers are still active in the market, but perhaps those who were not ready to buy immediately have fallen away.

We are also seeing a lot of people register at auctions, although many who register do not get a chance to get a bid in.  Perhaps this is because those who don’t understand the current market do not realise the value of a property, so the price escalates beyond their budget very quickly.

But overall, buyer activity in the inner and middle ring suburbs of Brisbane remains very strong and as a result prices continue to rise – every week.

 

The months ahead …

We consistently say that all housing markets are not uniform because individuals have strong preferences for where and how they want to live.  Changes caused by Covid-19 have brought about a change in perspective for a lot of individuals and the influx of new residents to Brisbane has been evident.

Whilst we can continue to build new homes in areas at the outer fringes of Greater Brisbane where there continues to be a reasonable supply of new land subdivisions, there appears to be a very real trend for families and individuals to live in some highly desirable areas in Brisbane that are effectively built out.  These areas are much closer to the CBD.

There is also a very real trend whereby people are choosing detached houses over units in Brisbane.  The release of more land on the outskirts of our city does very little to dampen the demand for the inner and middle ring suburbs.  This is one reason why we are seeing the higher priced locations grow at a faster rate than the lower priced locations throughout Greater Brisbane.  It is a trend we expect will continue for some time yet.

Brisbane is starting to shine and those who have been waiting for this boom are finally starting to celebrate

 

 

 

 

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Brisbane Property Market Update March 2021

Brisbane Property Market Update March 2021

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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Brisbane Property Market Update February 2021

Brisbane Property Market Update February 2021

Brisbane Property Market Update February 2021

 

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

 

Like most locations around Australia the Buyer activity in Brisbane has escalated rapidly as the weeks of 2021 continue to roll around.  Each week we are seeing line ups get longer at open homes around the city.  More Buyers are active in the market and this is also reflected through the fact that most quality properties sell after the first open home with multiple offers and high prices.  This month we will explore why this is happening throughout Brisbane and what this might mean for the future.

 

With the roll out of the Covid-19 Vaccine in Australia it seems the worst of the pandemic might be behinds us.  Our economic environment seems to be a lot better right now than what governments predicted and consumer confidence has returned.

 

The level of unemployment peaked at 7.5%, far better than what was expected.  The unemployment rate is now falling with 93% of the job that were lost, now recovered.  It is expected that unemployment will return to the 4-5% range a lot sooner that what was predicted. 

 

Even the loan deferrals data up to 31 January 2021 is positive with 91% of deferred loans now resuming their repayments leaving only 0.5% of all loan facilities in deferral.

 

Domestic migration has been accelerating into south-east Queensland out of the southern states further increasing the demand for housing throughout Brisbane.  It seems this trend is set to continue, at least for the foreseeable future.  REA Insights shows that demand for housing is at record highs in Queensland, and compared to the same time last year is up 45.1%.

 

Brisbane Property Market Update February 2021

 

ABS figures this month showed that building approvals and construction volumes in the higher-density unit market in Queensland seems to have bottomed out.  Attached dwellings data has shown a slight increase in activity, whereas the data for detached house approvals is surging.  This, in part, has been driven by the HomeBuilder grant stimulus.  The figures suggest that the current supply shortage off the back of peak oversupply in 2016, may start to slowly recover in the years ahead, but time will tell. 

 

Stock levels are still very low in Brisbane, with total listing volumes down nearly 30% year on year.  No wonder it is a frenzy out there with more buyers and fewer properties to purchase.

 

 

Brisbane Property Market Update Listing Volumes

 

 

And of course, interest rates are low.  There are plenty of cashed up buyers in the market.  With the RBA not expected to increase rates “until 2024 at the earliest” there is a lot of confidence and people ready to spend.

 

With these positive news stories, more positive outlooks for the Housing Market are being published.  Westpac have now forecast 20% price growth for Brisbane across 2021 and 2022, a big change from their dire predictions less than 12 months ago.

 

And let’s not forget the big news this month.  Brisbane is officially the top choice for the 2032 Olympic Games!  This is game changing – it is the best opportunity Brisbane has had in generations.  It will turbocharge investment into the city and boost our economic activity.  We will see the fast tracking of major infrastructure projects, which will have a knock-on effect for the property market.  It really an exciting time for our 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 1.5% over the month of February 2021.  The current median value for dwellings across Greater Brisbane is $535,618 which is once again, the highest it has ever been. 

 

The quarterly growth in dwelling values across Greater Brisbane is now 3.5% and annual growth for the last 12 months is now 5%. 

 

 

Brisbane Dwelling Values

 

Of particular interest is the fact that the upper-quartile properties are leading the growth in Brisbane.  These properties represent the most expensive quarter of the market.

 

Brisbane Property Price Growth

 

Brisbane House Prices

 

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 1.6% across the month of February 2021.  The 12 month change in Brisbane house prices has been 5.9%.   The current median value for a house in Greater Brisbane is $593,232, the highest it has ever been.

 

Brisbane House Price Growth

 

Brisbane Unit Prices

 

The Unit Market in Brisbane saw some more positive growth in the median value this month with an increase of 1% in February 2021.  The 12 month growth for units across Brisbane is now 1.1%, so it seems this market has bottomed out and is starting to recover.   The current median unit price in Brisbane is $396,183.

 

Brisbane Unit Price Growth

 

Brisbane Rental Market Movements

 

The Vacancy Rate in Brisbane as a whole, tightened further between December 2020 and January 2021, and now sits at 1.7%.    The table below highlights where vacancy rates across Brisbane sit at the end of January 2021.

 

Region

Vacancy Rate January 2021

(change from December 2020)

Beenleigh Corridor 0.7% (-0.1%)
Brisbane CBD 5.6% (-0.4%)
East Brisbane 1.4% (-0.1%)
Inner Brisbane 3.5% (-)
Ipswich 1.1% (-)
Northern Brisbane 0.9% (-)
South East Brisbane 0.6% (-0.2%)
Southern Brisbane 1.7 (-0.2%)
West Brisbane 1.5% (-0.1%)

Source: SQM Research

 

Vacancy risk continues to recover rapidly within the Brisbane CBD this month with currently vacancies now similar to the peaks between 2016 and 2018.  This is a remarkable recovery given the extremely high vacancy risk in this area during the peak of Covid-19.  Vacancy Rates across most other parts of Greater Brisbane remain tight, and in fact are tightening even further as the demand for rental properties increases.

 

Rents in the unit market in Brisbane have now recovered and we are seeing some upward pressure on rents with an annual change in unit rents of 0.5% across the city. 

 

Housing rents continue to see growth, due to the tightening vacancy.  The annual increase in rents for Brisbane Houses is 4.2% according to Corelogic Data.

 

Brisbane Rent Growth

 

 

Anecdotally we are seeing strong rent increases in the inner-city locations, especially in the premium housing sector.  Large shifts in the rents achieved when properties are advertised, are being demonstrated.  Property Management firms that we work with are also confirming this trend

  

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

 

The Saturday inspection run in Brisbane is becoming chaotic.  Line ups at open homes are to be expected.  We are seeing some Agents extend the inspection timeframe from 30 minutes to 1 hour – purely to get the volume of people through the door.  We can’t ever remember a time when we experienced this level of demand in our City.

 

Quality properties are continuing to sell after the first inspection, when listed for sale by private treaty.  Buyers need to be prepared to submit offers on the same day as they inspect in most cases.  Thankfully, some Sales Agents are providing slightly longer timeframes for buyers to submit offers, but this usually means more buyers have time to get an offer in before the closing timeframe.

 

We have been in the running for properties alongside more than 20 other buyers under multiple offer several times this month.  This level of demand is madness!  At auctions we have attended there have been several registered bidders and properties are selling well above our appraisal range based on settled sales data.

 

Of course, in a rapidly appreciating market, relying on settled sales data is a mistake.  We are coaching our buyers through the process, so they understand how much “stretch factor” needs to be applied to the settled sales data.  Depending on the location right now, this is between 3-10%.  Whilst the median data for Greater Brisbane shows price growth over the quarter of 3.5% across the region as a whole, we know for a fact that many locations have grown significantly faster than this.  So as a buyer it is important to understand the “real-time” information for an area or you may simply keep missing out.

 

The months ahead …

 

We have no doubt that the future for Brisbane property prices looks positive.  For once we actually agree with the predictions that the economists have made.  In fact, there are some areas in Brisbane where I’d argue we could see growth exceed the forecasts over the next 2 years.

 

Property prices are driven by the balance between supply and demand.  We break down these two elements to understand, at a local level, what this dynamic looks like.  Right now the demand in Brisbane is being fuelled by so many things.  Demand for housing comes from both Owner Occupiers and Investors and right now there are different motivations from these two groups.  Our own enquiry tells us that investors are rapidly coming back into the market, but they are competing fiercely with Owner Occupiers who are still the main drivers of the current demand in Brisbane.  We expect this demand to continue to increase in the coming months.  For how long it lasts, no-one knows.   But for now, we do know that for those who own Brisbane property, the future looks bright!

 

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Brisbane Property Market Update January 2021

Brisbane Property Market Update January 2021

Brisbane Property Market Update January 2021

 

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

 

The New Year has seen very strong buyer activity throughout Brisbane.  After a small Covid-19 scare causing Greater Brisbane to go into lockdown on the weekend of January 9-10, buyers have since been out in force inspecting and buying properties around the City.  This article will explore in more detail what we are seeing on the ground and also what the market indicators are telling us.

 

The latest Australian Bureau of Statistics (ABS) figures show that new loan commitments for housing and the value of owner occupier home loan commitments each reached records highs in December 2020.  Figures show an increase of 31.2% in new loan commitments compared to December 2019.  This type of data is usually a leading indicator for what is happening in relation to housing demand in the market.

 

According to APRA’s latest figures the number of deferred loans across Australia continued to decline to 1.9% in December, with Queensland’s portion of housing deferrals currently at a lower level than both Victoria and New South Wales.

 

Brisbane Property Market Update January 2021

 

Additionally, ABS data showed Queensland saw a monthly increase of 1.4% in the number of employed people in December, a sign of a strengthening local economy and a stand out performance at a national level.  Also, the number of total job advertisements jumped in Queensland by 2.5% over December, representing an increase of 20.8% over the last 12 months.  Encouragingly, the reduction in JobKeeper wage subsidies has not resulted in a negative shock to employment in Queensland as many had predicted.  The unemployment rate is still 7.5% across Queensland so there is still more work to do in this area, however the indicators are extremely positive for the future.

 

In terms of population movements, Queensland seems to be benefiting from strong interstate migration and the rate of growth has not been this high in annual terms since 2006.  Corelogic calculated that approximately 25,350 residents relocated from other Australian States to settle in Queensland over the last financial year.  Estimates from Corelogic suggest that Queensland’s interstate migration rate is 90% above the decade average.  Although the lifestyle drivers are causing some buyers to show interest in Queensland’s tourism centres, the majority of interstate buyers are looking for properties in the metropolitan areas.

 

Of course, as more people migrate to a given location, the demand for properties will increase and in the absence of rapidly increasing new supply, sale prices will rise.  Looking at the total number of listings in Brisbane according to Corelogic Data, compared to 12 months ago we are down -28.4%.  This provides an indication of the current market conditions.  It is a strong Seller’s Market right now in Queensland’s State Capital.

 

Brisbane Property Market Update January 2021

Let’s explore this further by looking at what the data is now showing us.

 

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 0.9% over the month of December 2020.  The current median value for dwellings across Greater Brisbane is $527,826 which is once again, the highest it has ever been.

The quarterly growth in dwelling values across Greater Brisbane is now 2.5% and annual growth for the last 12 months is now 4%.  Brisbane continues to outperform the national combined capital city average for annual growth over the last 12 months, which is currently 1.7%.

 

Brisbane Property Market Update January 2021

 

Regional markets have performed well recently, however according to Corelogic’s research director, Tim Lawless, “the divergence between metro and regional housing demand in New South Wales and Victoria is more substantial than in other states.”

 

Brisbane House Prices

 

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 1% across the month of January 2021.  The 12 month change in Brisbane house prices has been 4.9%.  Based on the median price growth, a house in Brisbane that was purchased in January 2020 for $750,000 would now be worth $786,750.   The current median value for a house in Greater Brisbane is $583,902, the highest it has ever been.

 

Brisbane Property Market Update January 2021

 

Brisbane Unit Prices

 

The Unit Market in Brisbane saw some more positive growth in the median value this month with an increase of 0.4% in January 2021.  The 12 month growth for units across Brisbane is now slightly positive again at 0.4%.   The current median unit price in Brisbane is $393,177.

 

Brisbane Property Market Update January 2021

 

Brisbane Rental Market Movements

 

The Vacancy Rate in Brisbane as a whole remained consistent between November and December 2020, at 1.8%.    The table below highlights where vacancy rates across Brisbane sit at the end of December 2020.

 

Region Vacancy Rate December 2020

(change from November 2020)

Beenleigh Corridor 0.8% (-)
Brisbane CBD 6% (-0.9%)
East Brisbane 1.5% (-0.1%)
Inner Brisbane 3.5% (-)
Ipswich 1.1% (+0.2%)
Northern Brisbane 0.9% (-)
South East Brisbane 0.8% (-)
Southern Brisbane 1.9 (-0.1%)
West Brisbane 1.6% (+0.1%)

Source: SQM Research

 

Vacancy risk is recovering rapidly within the Brisbane CBD with a further reduction from 6.9% in November to 6% in December.  Whilst this is still relatively elevated, it is far better than the vacancy rates experienced at the peak of the pandemic.  Vacancy Rates across most other parts of Greater Brisbane remain tight.

 

Rents in the unit market in Brisbane have seen price falls -0.3% from February 2020 through to January 2021, whereas housing rents increased 3.4% across the same period.

See below the change in rents for Brisbane Units and Houses across the last 12 months according to Corelogic Data.

 

Brisbane Property Market Update January 2021

 

 

Tenants are finding stock levels tight for finding a rental property in many locations around Brisbane.  There are strong crowds at open homes for rent and multiple applications being submitted on properties that become available – often well above the asking weekly rent price advertised.  The current imbalance between supply and demand in the rental market, especially in detached housing, is causing rents to rise and this is likely to show in the data in the coming months.

  

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

 

The buyer activity across Brisbane has been stronger throughout January that what we observed in the latter part of 2020.  It is now common to line up before entering a property at a Saturday Open Home.  Buyers must therefore factor this time delay into their inspection schedule on a weekend.

 

We have seen properties with more than 100 groups through in the first week of listing for highly sought-after properties.  This is unusually high demand, but not uncommon in the current market.  We are seeing very competitive offers being made and many buyers taking on high risk by submitting offers that are unconditional, even despite no building and pest inspections taking place.  This is not something we recommend, however with such short timeframes between properties being listed and then going under contract, buyers are doing what ever they can to be more competitive.  Multiple offers on properties listed for sale by private treaty is a given in the current market.  It is an extremely competitive property market across the city.

 

The months ahead …

 

2021 has started strongly as we predicted, but there is a lot of opportunity for the months ahead in the Brisbane Property Market.  The housing headwinds that were reported throughout the worst of the pandemic have dissipated.  The local economy is outperforming forecasts and the labour market is continuing to improve.

The low interest rate environment has been a catalyst for higher housing demand from buyers, and the record low rates are likely to remain low for the foreseeable future.  Interstate migration is also very strong.  We haven’t seen conditions like this in Brisbane for a long time.  Is now the time for Brisbane to really shine?  It all looks perfectly aligned for some solid price growth – that is for sure.

 

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Brisbane Property Market Update December 2020

Brisbane Property Market Update December 2020

This article will highlight what has been happening in the Brisbane Property Market Update during December 2020.

 

The last month of 2020 delivered a strong wrap up for the year for Brisbane.  There was little slow down in the weeks leading up to Christmas. Buyers were still very active throughout the city up until around mid-December.  This article will provide a summary of what the data has now confirmed and also some of the observations we have made from our on-the-ground assessment.

At a macro level, the Australian Economy is performing miraculously given the context of the global pandemic.  According to ABS data, approximately 84% of jobs have already been recovered. Job ads area also up nearly 50% of their lows all pointing to a recovery in the right direction for us all, nationwide.

Last month we reported, consumer confidence was the strongest it has been in 7 years.  During December that climbed to 10 year highs according to Westpac Economics.

 

Brisbane Property Market update

 

 

Brisbane property prices have continued to show positive growth, a trend that has been continuing for several months now.  Let’s explore this in further detail in the summary below.

 

Brisbane Property Market Update – 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 1.1% over the month of December 2020.  The current median value for dwellings across Greater Brisbane is $521,686 which is the highest it has ever been. 

The quarterly growth in dwelling values across Greater Brisbane was 2.1% and annual growth for the year was 3.6%.  Brisbane has outperformed the national combined capital city average for annual growth in 2020, which was recorded as being a more modest 2% over the past 12 months.

In terms of which market segments within Brisbane are performing the strongest, Corelogic Data confirms that dwelling values in the upper quartile rose 1.25% in December.  This is compared with a 0.94% rise seen in the lower quartile values according to Corelogic Data.

 

Property Values Brisbane

 

Melbourne is now the only capital city location that still reporting negative annual price growth, and its dwelling values are still -4.1% off their previous March 2020 peak.  Sydney, whilst reporting annual price growth up to the end of 2020, is also still down -3.9% from its previous peak in July 2017.  Additionally, Perth and Darwin are down -19.9% and -25.7% respectively from their 2014 peaks, despite showing positive annual price growth across the last 12 months.

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 1.2% across the month of December 2020. The current median value for a Brisbane house is now $576,338, the highest it has ever been.

 

Brisbane House prices

 

The Unit Market in Brisbane saw some positive growth in the median value once again with an increase of 0.4% for the month of December 2020. The current median unit price in Brisbane is now $390,785, which is still 0.6% lower than 12 months ago.

 

Brisbane Unit Prices

Brisbane Property Market Update – Rental Market Movements

 

The Vacancy Rate in Brisbane as a whole fell again between October and November 2020, and now sits at 1.8% city wide. There are many areas in Greater Brisbane where vacancy rates are even tighter.  The table below highlights where vacancy rates across Brisbane sit at the end of November 2020.

 

Region Vacancy Rate November 2020
Beenleigh Corridor 0.8%
Brisbane CBD 6.9%
East Brisbane 1.6%
Inner Brisbane 3.5%
Ipswich 0.9%
Northern Brisbane 0.9%
South East Brisbane 0.8%
Southern Brisbane
2.0%
West Brisbane 1.5%

Source: SQM Research

 

Vacancy risk is still highest within the Brisbane CBD, although there has been a rapid recovery over the past few months when vacancy rates peaked at around 14% in this location.   The CBD and inner city areas are also the locations in Brisbane where there is a large number of higher density units that have been impacted by the pandemic, compared to other areas and alternative building types. 

Rents in the unit market in Brisbane saw price falls -1.1% from January to December 2020, whereas housing rents increased 2.7% across the same period.

See below the change in rents for Brisbane Units and Houses across the last 12 months according to Corelogic Data.

 

 

Rent changes Brisbane

What did we see on the ground across Brisbane during December 2020?

 

Typically in the lead up to Christmas, many buyers prefer to spend their time Christmas shopping rather than property shopping.  This did not seem to be the case in Brisbane throughout December.

We observed strong auction attendance right up to the last weekend before Christmas.  We also observed strong bidding from those who were in a position to buy under auction conditions.  Of particular interest, was the higher than normal interest in properties in prime locations that were ripe for renovation.  In several examples, we saw higher than normal bidder registrations for these types of properties across our City.

Brisbane Property values are definitely in an upswing phase and buyers must consider this when considering making an offer on a property.  As I reportes last month, if buyers are relying on sales that occurred 3-4 months ago to come to a price to pay for a property in the current market, they will in most cases simply miss out.  The market is strong in Brisbane and buyer activity is continuing to increase.  There are definitely more active buyers entering the market than there are new listings being added so a sense of urgency is continuing to grow in Brisbane.

 

The months ahead …

 

Looking forward into 2021, Brisbane looks to be very well placed for some strong price growth.

The risks associated with less fiscal support and the expiry of mortgage repayment deferrals have diminished as the economy has outperformed all forecasts.  We have also seen a rapid improvement in labour markets nationwide, and especially here in Queensland.  In Brisbane, the COVID-19 outbreak has had minimal impact in terms of restrictions and lockdowns since the first wave back in March 2020.

Of course we cannot underestimate the risk that further outbreaks of the virus in the months ahead may impact the recovery of our local economy.  We have done so well to date.  With increasing positivism around the distribution of a vaccine and the management of small clusters, it is looking more likely that the trajectory for our local housing market will remain positive in the months ahead.

 

 

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Brisbane Property Market Update November 2020

Brisbane Property Market Update November 2020

This article will highlight what has been happening in the Brisbane Property Market throughout November 2020.

 

It feels like rocket fuel has been added to the Brisbane Property Market in the last month.  Sentiment has accelerated rapidly and so too are prices in some locations around the city.  The buyer depth has been increasing throughout November and plenty of buyers are complaining that properties are selling too fast, often before they have time to fully consider if the property is right for them.  Let’s explore what has been happening on the ground, and unpack what the monthly data tells us.

The latest lending figures show that owner-occupier lending has risen to historical highs, excluding refinancing.  In Queensland, first home buyer numbers are up 70% year-on-year.  The value of housing finance commitments (excluding refinancing) increased 40.2% in Queensland over the September quarter, accounting for around 31% of the uplift in finance nationally. 

 

lending commitments

 

 

Investor lending remains relatively modest overall looking at nation-wide data, although based on our own level of inquiry there is definitely a lot of investor interest in Brisbane at the moment.

Over the month we also saw mortgage lending get a little easier once again, with assessment rates from many banks being reduced.  This alongside the interest rate cut on Melbourne Cup Day has resulted in an increased borrowing capacity for many property buyers.

Also, consumer confidence is the strongest it has been in 7 years.

 

Consumer confidence and brisbane property market

 

Housing Loan Deferrals are also falling, down from more than 900,000 loans at the peak of the pandemic to under 300,000 now, a decline of almost 70%.  This is also providing reassurance for property markets, with the risk of forced selling due to mortgage holders unable to make their repayments, rapidly diminishing.

Finally Queensland had some good news on the employment front, adding back 206,000 jobs in only 5 months to see total employment higher now than a year ago.  And of course, vaccine tests are proving to be increasingly effective and there is talk of a nationwide roll out early in 2021.

Last month, we reported that Brisbane property prices were showing signs of growth and we are pleased to confirm that this positive growth trend is continuing.  Let’s explore what is happening in our local property market.

 

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 0.6% over the month of November 2020.  The quarterly growth in dwelling values across Greater Brisbane is now 1.5% and annual growth is sitting at 3.2%.  

Of particular interest, is that all segments of the Brisbane market appear to have had similar growth over the last quarter with upper quartile values 1.5% higher compared with a 1.6% lift seen in the lower quartile values according to Corelogic Data.

 

Brisbane price growth

 

This month is the first since the onset of the pandemic where all capital cities demonstrated positive price growth, with Melbourne the only capital city location still reporting negative growth for the quarter. 

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 0.7% across the month of November 2020. The current median value for a Brisbane house is now $568,629, the highest it has ever been.

 

Brisbane house prices

 

The Unit Market in Brisbane saw some positive growth in the median value once again with an increase of 0.2% for the month of September 2020. The current median unit price in Brisbane is now $388,661, which is still 1% lower than 12 months ago.

 

Brisbane unit proces

Brisbane Rental Market Movements

 

The Vacancy Rate in Brisbane as a whole remained consistent at 2% between the end of September and the end of October 2020.   There are many areas in Greater Brisbane where vacancy rates are extremely low.  The table below highlights where vacancy rates across Brisbane sit at the end of October 2020.

 

Region Vacancy Rate October 2020
Beenleigh Corridor 0.9%
Brisbane CBD 7.9%
East Brisbane 1.8%
Inner Brisbane 3.8%
Ipswich 1.0%
Northern Brisbane 0.9%
South East Brisbane 0.9%
Southern Brisbane
2.1%
West Brisbane 1.6%

Source: SQM Research

 

You can see from the table above, that vacancy risk is still high in the inner city region where there is a large number of higher density units.  Rents in the unit market in Brisbane have now seen price falls -1.9% from March 31 to November 31, a remaining consequence of supply and demand side factors. 

See below the change in rents for Brisbane Units and Houses from March 31 to November 31 2020.

 

Brisbane rent prices

 

What are we seeing on the ground across Brisbane?

 

Every Saturday throughout November appeared to be busier than the last with buyer numbers continuously increasing.  Most properties that we viewed that were listed for sale by private treaty went to multiple offer after the first open home.  Buyers could not believe just how fast quality properties were selling and a lot of buyers have become increasingly frustrated that they keep missing out.

At auctions, we have seen strong prices being achieved.  If properties have passed in, in many instances there is a contract in place with a conditional buyer soon after.

Most properties are now selling outside of our appraisal range.  Appraisals are based on historical recorded sales and this data is lagging based on the current contract values.  If buyers are relying on sales that occurred 3-4 months ago to come to a price to pay for a property, they will in most cases simply miss out.  The market is on the move and buyers must be prepared to pay more than was required just a few short months ago.

 

The months ahead …

 

The outlook for the Brisbane housing market appears to be strong looking forward into 2021.

The demand is rising due to interstate migration, the broad range of stimulus measures and positive changes to market sentiment.  Economic conditions are improving with the virus containment and it has never been cheaper to borrow money.

Whilst we are seeing buyer numbers rise, we are also seeing stock remain low.  Listing volumes decreased again in November in Brisbane according to SQM Research, down a further 3.8% which demonstrates a decline of -12.5% annually.  Tight levels of inventory combined with rising buyer numbers creates urgency amongst buyers, which in turn adds to the upward pressure on property prices.

The recovery trend is well and truly in full swing in Brisbane and we expect 2021 will deliver some strong capital growth returns for Brisbane property.

 

 

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Brisbane Property Market Update October 2020

Brisbane Property Market Update October 2020

This article will summarize what has been happening in the Brisbane Property Market throughout October 2020.

 

October has seen a huge turn around in Buyer sentiment in Brisbane.  It seems that even more buyers have entered the market in the last month and this is contributing to the very high demand that is evident around our City.  Here we will summarize the monthly data and share our experiences of what we have seen on the ground by being out and about every Saturday, mixing with other buyers at open homes in several pockets around Brisbane.

 

Last month we reported that Westpac Bank updated its property forecasts with Brisbane prices tipped to surge 20% between 2022 and 2023.  Since then consumer confidence has surged, returning to an 8-month high.  It is well known that consumer confidence is a key driver for housing markets across Australia.  With the announcement of further rates cuts, we may now see a further surge in housing market activity.

 

Consumer Confidence Rating

 

There has still been a lot of talk about the mortgage payment deferrals that are expiring, and will that have an impact on property values in the coming months.  We have now seen a decline from 11% ($195 billion) in June to 7.4% ($133 billion) in September 2020 according to APRA’s figures a trend which is reassuring.

 

Repayment Deferrals

 

We have also seen the latest Domain House Price Report published, which confirmed that Brisbane house prices have increased over the September quarter.  The same report also showed how fragmented the Brisbane market actually is with annual house price growth up 3.7% across Greater Brisbane, whilst annual unit prices were down 6.1% in the same region.  As we always say … there are markets within markets.  

 

The table below shows the breakdown of house prices by local Government area.

Domain House Price Report September 2020

 

The unit sector in Brisbane has not performed as well as evidenced by the breakdown below.

Domain House Price Report September 2020

 

The Domain Buyer Demand Indicator has shown that houses remain a firm favourite for prospective homehunters, with demand rising post-lockdown in Brisbane, and it remains significantly elevated compared to last year.  Unit demand has been sliding since late May although it also remains slightly higher than last year, with investment grade stock likely to be impacted most.  

 

At the moment the Brisbane real estate market is moving at different speeds.  We have the housing market, and the high end unit market (as a small segment of the unit market as a whole) that are incredibly strong, but the inner city 1 and 2 bedroom standard apartment markets are suffering.  It is unlikey that we will see a recovery until borders open and international students return.

 

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 0.5% over the month of October 2020.    

 

Brisbane Property Prices

 

The data now confirms that property prices across Australia have moved into recovery mode with a broad based lift in dwelling values, with the exception of Melbourne.  

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 0.6% across the month of September 2020. The current median value for a Brisbane house is now $564,531.  Combined with last month’s house price results for Brisbane, this is a 1% increase across the last 2 months.  On a $500,000 property, this means it will cost a buyer $5,000 more to buy, and on a $1,000,000 property it is now $10,000 more to buy in the same area than it was 2 months ago.

 

Brisbane House Prices

 

The Unit Market in Brisbane saw a decline in median values during October with a small slide of -0.1%. The current median unit price in Brisbane according to Corelogic is now $389,583.

 

Brisbane Unit Prices

 

Brisbane Rental Market Movements

 

The Vacancy Rate in Brisbane as a whole fell again from 2.1% at the end of August to 2.0% at the end of September.   There are still many areas in Greater Brisbane where vacancy rates are extremely low.  The table below highlights where vacancy rates across Brisbane sit at the end of September 2020.

 

Region Vacancy Rate September 2020
Beenleigh Corridor 0.9%
Brisbane CBD 8.1%
East Brisbane 1.9%
Inner Brisbane 3.9%
Ipswich 0.9%
Northern Brisbane 0.9%
South East Brisbane 0.8%
Southern Brisbane
2.1%
West Brisbane 1.7%

Source: SQM Research

 

The main changes over the last month in vacancy are a further tightening in the Beenleigh Corridor, East Brisbane, Inner Brisbane, Northern Brisbane and Southern Brisbane, a small increase in the Brisbane CBD and no change in the other regions.  Again the main area of risk seems to be the higher density unit markets confined to the inner city and CBD areas as previously reported.

Rents in the unit market in Brisbane saw price falls -1.7% from March 31 to October 30, a consequence of too many investment apartments in a small geographical location around the city with a recent change in demand for these types of accommodation due to the impacts of Covid-19 as we reported last month.

See below the change in rents for Brisbane Units and Houses from March 31 to October 30 2020.

 

Brisbane Property Market

 

 

What are we seeing on the ground across Brisbane?

 

The number of people out at open homes every Saturday has continued to grow throughout October.  With listing volumes still lower than 12 months ago, there is fierce competition for quality properties throughout Brisbane.

Demand is very strong.  I would argue the strongest that we have seen in more than a decade.  There are many reasons for this.

The most recent Herron Todd White Residential Month in Review, it states:

” Money has never been cheaper and for those with the ability to
access it, the opportunity is obvious.

 

Here is an example of a recent auction in Brisbane.  This was vacant land in Kedron, which is 11km to the north of the Brisbane CBD.  There were 39 registered bidders and the vacant 607m2 block sold for $1,155,000.

From our own “on-the-ground” experience, we can say that there is not a single property that we have been able to buy that has been listed on the market, that has not been a multiple offer situation after the first open home.  Every property we have considered for our Client has has high competition.

 

We are now also seeing properties sell outside of our appraisal range based on previous comparable sales in the area.  This shows how strong the current market is, with properties selling between 5 and 10% over the highest end of our appraisal range.  This is critical for buyers to understand, otherwise they will simply keep missing out.

 

There is still off-market activity and this is generally less competitive.  Obviously this is one advantage of working with professional buyer’s agents who have an extensive agent network.

 

There is less fear in Brisbane now about property prices falling, so purchasers are eager to act.  Interstate migration is also boosting sales with property buyers looking to secure a home before relocating to Brisbane.  There is a sense of anticipation building in Brisbane what we will see high volumes of interstate arrivals once the borders re-open for everyone.  Given the changes that Covid-19 has had on all of us, many people are seeking a great lifestyle, which Brisbane provides, whilst having the ability to work more remotely. 

 

The dominant buyer group is still the owner occupier in Brisbane, although we have definitely seen investor activity start to rapidly pick up again.  Lending has spiked and owner-occupier lending is now at historical highs, excluding refinancing.  First home buyer numbers are up 70% year on year in Queensland according to the most recent ABS lending data.  Investor lending also rose 5% in September, but it remains low overall.

 

The months ahead …

 

The future for the Brisbane housing market looks very bright.  We expect the current price growth to continue given the sheer number of buyers currently in the market ready to buy.  With tight vacancy rates throughout most areas in Greater Brisbane we also see great investment opportunities for those who have been sitting on the sidelines waiting for the worst of the pandemic to pass.

The high density unit market is still subject to further headwinds – especially in the inner city.  With elevated vacancy rates, investors without a tenant in place will certainly feel the impact on their returns.  Also with downward pressure on prices, the immediate future looks bleak.

Queensland now has a re-elected Labor government, so there is more certainty than this time last month when we were still in the lead up to our State election.  With the promise of jobs, and more jobs, let’s hope they get it right!  With an improving economy, together with the creation of more jobs in the months ahead, this will have further positive effects on the Brisbane Market.

 

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