Brisbane Property Market Update April 2022

Brisbane Property Market Update April 2022

Brisbane Property Market Update April 2022

The Brisbane property market has again recorded strong price growth throughout the month of April 2022 according to the CoreLogic Hedonic Home Value Index with dwelling price growth of 1.7%. This is at the same time as the markets in Sydney and Melbourne are on the way down.

Brisbane Buyers Advocate
Source: CoreLogic

The growth across Brisbane was still slightly stronger in the housing sector (+1.7%) compared to the unit sector (+1.4%) but the gap in month-on-month growth between these two product types appears to be decreasing.

 

Brisbane Property Market Update April 2022

This most recent data, being settled sales data, represents the property transactions where contracts were entered into throughout March. At that time Brisbane had just experienced another city-wide flood event and there was a lot of uncertainty in the market. Therefore, this result is reassuring.

The top end of the market has lost more momentum in terms of price growth, compared to the middle segment and the bottom end of the market throughout Brisbane. This is a trend that is not set in place, given we have observed this pattern for the last 3 consecutive months. The data below from CoreLogic also confirms that all 3 segments of the market have passed their peak rate of growth over a 3 month period.

 

Brisbane Buyers Advocate
Source: CoreLogic

Brisbane has now experienced month-on-month price growth since August 2020.  The peak rate of growth, on a monthly basis, in the housing sector was achieved in November 2021 when the depth of buyers across the city was peaking.  The median value for a House in Brisbane is currently at a record high being $880,332, which is $23,601 HIGHER than it was just one month ago.   

Brisbane Property Market Update April 2022

In the Unit market the median value reached a new high again this month. The median Unit price in Brisbane is now $487 967 which is $8,405 HIGHER than last month.

Brisbane property Market Update April 2022

Despite the floods in late February, there have been no pull back in property prices throughout the city. After the 2011 floods, the trend was very different. At that time the macroeconomic conditions were also very different, and it confirms that property values are driven by a variety of interrelated factors that underpin supply and demand.

With the announcement of interest rates on the rise, it will be interesting to see if the demand for Brisbane properties dampens in the future. Over the last 12 months, every suburb in Brisbane has experienced positive house price growth. In the unit sector prices have dropped by less than -1% in some places, but the majority of suburbs have experienced positive price growth in the unit sector as well. The historically low-interest rate environment, together with many other local factors contributing to low supply and high demand, has caused all locations across the city to boom.

The commentary around rising interest rates will cause some fear to penetrate the market. When we put some perspective on what the effect will be, the reality is that not everyone who currently holds a mortgage will be impacted in the same way. The same is true for property buyers.

It is important to remember that unemployment is at the lowest level since the 1970s – currently sitting at 3.95% nationwide. Queensland has added close to 100,000 new jobs over the last 12 months according to the ABS data released in March, so our State has recovered extremely well in this time. It is not unreasonable to assume with unemployment rates so low that we will start to see some upward pressure on wage growth. This will also partially offset interest rate rises in the future.

Investor finance commitments have increased in Queensland to 35% of all lending and nationally this figure sits at 33.3%. This shows a commitment from individuals and institutions to invest in property in a market where rents are on the rise.

With vacancy rates at historical lows in Brisbane, we expect the rents to further increase in the coming months – another sign that any impact from rising interest rates may be cushioned by other things at play in the current market.

Vacancy Rates across the city are now at 0.7% – the lowest level on record since 2005. The table below highlights where vacancy rates across Brisbane sit at the end of March 2022.

Region Vacancy Rate March 2022
(change from February 2022)
Beenleigh Corridor 0.4% (-)
Brisbane CBD 1.7% (-0.9%)
East Brisbane 0.7% (-0.4%)
Inner Brisbane 1.1% (-0.5%)
Ipswich 0.5% (-0.2%)
Northern Brisbane 0.4% (-0.2%)
South East Brisbane 0.5% (-0.1%)
Southern Brisbane 0.7% (-0.3%)
West Brisbane 0.7% (-0.1%)

Source: SQM Research

In the last 12 months, Brisbane house rents have increased 12.2% and Brisbane unit rents have increased 7.2%. The annual change in Brisbane house rents has been recorded as the strongest rental market growth, compared to every other capital city throughout the country.

 

Brisbane Property Market Update April 2022

Since the floods at the end of February, and also with international borders now open, even the inner-city rental market is tight. There is very little available to rent, regardless of where tenants are looking throughout the city. It is a tough market for tenants to find a home, a problem that will remain for some time yet.

Over the last month, the average auction clearance rates recovered. During the 4 weekends of March, according to Domain, Clearance Rates across Brisbane averaged just 57%, but throughout April they increased to an average of 69%. In general, we are starting to see fewer registered bidders at auctions throughout the city, a sign that the buyer demand has softened. Although the demand has softened, there are still more buyers than sellers which is why prices are still on the rise. We are also seeing Agents and Auctioneers working harder to close the gap between buyers and sellers – a sign that sellers’ expectations have not yet slowed down to align with the buyer activity.

There is no evidence that we have seen of prices softening. Whilst the volume of buyers is a little lower, the quality of those buyers is still evident. This means that we are still seeing strong prices being achieved, especially for quality real estate across the city.

We expect Brisbane to remain a fairly resilient market in many areas amid higher interest rates due to our relative affordability, low levels of supply, and the continuing strong interstate migration flows. A higher volume of people relocating is supporting the demand for residential property and this is not a trend that we expect rising interest rates will change. Total listings remain 21% lower than 12 months ago in Brisbane and more than 40% below the 5-year average according to CoreLogic. Unless we see a huge increase in the number of properties that become available for sale, prices will remain strong in the months ahead.

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Brisbane Property Market Update March 2022

Brisbane Property Market Update March 2022

This article will highlight what has happened in the Brisbane Property Market Update in March 2022.

The Brisbane property market has performed strongly again throughout March 2022, maintaining its position as the fastest-growing capital city property market in the country. House price growth continues to outpace unit price growth, however, the gap is closing between the different product types. This article will explore what has been happening in the Brisbane Property Market throughout March 2022.

Supply in Brisbane remains tight, and off the back of the floods, it is possible that this trend will continue in the months ahead. Total advertised stock levels are -25.9% lower than they were 12 months ago. This is also more than 40% below the previous five-year average level. Even new listings are lower compared to the equivalent period last year.

Property Buyers Agent Brisbane
Source: CoreLogic

When we compare listing volumes in Brisbane with those in Sydney and Melbourne, it is apparent that higher stock levels in the other major capital city markets have normalised. This can be explained by a larger volume of properties coming on the market in Sydney and Melbourne, in combination with a drop in buyer demand. This is very different to what we are experiencing in Brisbane.

Sales volumes in Brisbane are still very high. Compared to 12 months ago, Brisbane has seen an increase in the number of transactions across the city of 62.8%. This is indicative of the high demand that has dominated our market in the period of time.

Melinda Jennison Buyers Agent Brisbane
Change in Sales Volumes, 12 Months to March 2022 (Source: CoreLogic)

When we break down the sales volumes into a shorter period of time, analysing the last quarter instead of the last 12 months, according to CoreLogic, sales activity is 39% lower than a year ago in Sydney and 27% lower in Melbourne, however sales volumes have increased in Brisbane over the same period. This is important to consider because our market is at a different stage in the cycle to these other major capital cities. It is another reason why we should never assume that Australia is “one property market”.

Over the month of March, auction clearance rates in Brisbane plummeted in the two weeks after the floods (42% and 53%) and then recovered. This can be explained by a sudden lack of buyer confidence as the city went into shock in relation to the impact that the heavy rain event had in many parts of the city. However, in the weeks that followed buyer confidence slowly returned and clearance rates according to Domain we back up to 64% on the last weekend of March.

When we look at the trend of interstate migration, it is clear where the housing demand is coming from for Queensland. Throughout the September quarter, net migration into Queensland reached a new record high, equating to about 1,263 new residents every week. The graph below shows where most of those people were coming from.

Brisbane Property Market Update March 2022
Source: CoreLogic

Employment growth in Queensland has also been spectacular over the last 12 months. This is indicative of an improving economy off the back of the lockdowns and impacts relating to Covid-19 over the last 2 years.

The issue in Brisbane is where everyone is going to live if the population keeps growing rapidly? We already have extremely low vacancy rates and listing volumes remain well below the long-term trends. The environment of low supply and high demand is likely to remain unchanged for some time yet, which will continue to support price growth in both dwelling values and rents.

Of course, we have to consider that inflation is rising, interest rates will increase at some stage in the near future and consumer confidence has taken a turn for the worse over recent months. These factors will potentially have an impact on demand for some buyers, but at this stage, we are seeing no impact on the market because of this.

Market Prices – Brisbane Property Market Update March 2022

The latest Hedonic Home Value Index data by Corelogic released on 1st April 2022 for the month of March 2022, has confirmed that the median dwelling value in Brisbane increased by a further +2.0% over the month. This price growth is more than what we experienced in February. Whilst last month we reported that a slowdown in the rate of growth across the city was starting to occur, this data suggests that this is no longer the case, with growth increasing again this month. The current median value for dwellings across Greater Brisbane is now $749,293 which is $26,860 higher than one month ago.

Annual growth for the last 12 months for Brisbane Dwellings is now +29.3%.

Brisbane Property Market Update March 2022
Source: CoreLogic

Brisbane’s middle segment of the market is still the top growth segment, ahead of the top end of the market in terms of quarterly price growth for all dwellings. This is a trend we have now observed for the last 2 months.

Brisbane Property Market Update March 2022
Source: CoreLogic

Each month we are tracking the trend in the change to price growth by market segment and we can now confirm that all segments of the market in Brisbane have passed their peak growth rate according to the data above.  Whilst all segments are still experiencing strong price growth, the rate of growth is starting to slow.

The rate of price growth is decelerating the most at the top end of the market, and the least at the bottom end of the market across the city.

Brisbane House Prices – Brisbane Property Market Update March 2022

The Brisbane Housing Market is still the top performing Housing Market across all capital city locations throughout Australia. Median values for the greater Brisbane region increased a further 2.1% throughout February 2022. The rate of growth increased again compared to February where the growth rate for housing in Brisbane was 1.9%.  With this increase in the momentum of price growth once again we have now seen another new record median value for Brisbane Houses achieved this month. The 12-month change in Brisbane house prices has been 32.1%%, which is still the strongest 12-month house price growth across all capital cities as well as rest of state regions throughout Australia according to Corelogic data.  

The current median value for a house in Greater Brisbane is now $856,731 the highest it has ever been. This is $28,556 MORE than one month ago!  Houses in Brisbane continue to become more expensive every month.

investment properties in Brisbane
Source: CoreLogic

 

Brisbane Unit Prices – Brisbane Property Market Update March 2022

The Unit Market in Brisbane grew strongly again throughout March 2022, reaching another new record high. Unit median values in Brisbane were up 1.6% this month, compared to 1.5% last month, so the momentum is picking up in this segment of the market given we have now seen three months of consecutive price growth increases in the unit sector. The 12-month growth for units across Brisbane is now +15.1%.  The current median unit price in Brisbane is $479,562 which is $11,169 more than one month ago.

Brisbane Property Market Update March 2022
Source: CoreLogic

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 in Greater Brisbane.

Off market properties Brisbane

The housing sector (black line) continues to outperform the unit sector in Brisbane on a month-to-month basis, a trend observed since October 2020. The rate of growth was slowing in the housing sector until this month where it can be observed that it has again picked up. 

In the Unit sector (blue line) we have now seen three months of consecutive price growth increases which indicates that this segment of the market is gaining momentum in Greater Brisbane.

Below we have charted the actual median value changes for Houses and Units across Greater Brisbane since January 2021. You can see the median value for Houses across the last 15 months has increased $272,829.  For units, the median value increased $86,385 throughout the same period of time. 

Brisbane Property Market Update March 2022

 

Rental Market Movements – Brisbane Property Market Update March 2022

Vacancy Rates at a city-wide level in Brisbane fell again between January and February 2022. They are now at 0.9% which is just below the record low of 0.8% experienced in April 2006. The table below highlights where vacancy rates across Brisbane sit at the end of February 2022.

Region Vacancy Rate December 2021
(change from November 2021)
Beenleigh Corridor 0.4% (-)
Brisbane CBD 2.6% (-0.6%)
East Brisbane 1.1% (+0.1%)
Inner Brisbane 1.6% (-0.4%)
Ipswich 0.7% (-)
Northern Brisbane 0.6% (-)
South East Brisbane 0.6% (-0.1%)
Southern Brisbane 1.0% (-0.1%)
West Brisbane 0.8% (-0.1%)

Source: SQM Research

Vacancy rates in the Inner-City market have made a fast recovery, perhaps in part due to interstate and international borders reopening.   We have not seen levels this low in the CBD since 2013, before the influx of new higher density developments being built in this region.  Off the back of the Brisbane floods last month, we expect that vacancy rates will tighten further, creating uncertainty for tenants who are looking to relocate throughout all of the Greater Brisbane region.

Housing rents in Brisbane have shown an annual growth rate of 11.6% at the end of March.  This is the highest rate of growth in rents across all capital cities throughout Australia. 

Rental incomes in the unit market throughout Brisbane have seen an annual increase of 6.8%. 

Gross rental yields for dwellings across Greater Brisbane according to CoreLogic are 3.5%,  down a further 0.1% since last month.  In the Housing sector, gross rental yields in Brisbane are sitting at 3.3% and in the unit sector the gross yields are now at 4.7%.

Brisbane Property Market Update March 2022

Source: CoreLogic

What did we see on the ground across Brisbane during March 2022?

After the floods at the end of February we have definitely observed a reduction in the number of buyers who are in the market. However, we have not yet seen a reduction in the quality of the buyers which means that the buyers who are still looking to secure a home or an investment property in Brisbane are still willing to pay strong prices.  This is further evidenced by the continued growth in property prices.

Whereas previously we may have experienced 10 or 15 offers on a property, we are now seeing 4 or 5 offers. This is a general observation only, because our team have also been involved in multiple offer situations where there have still been 15 buyers submit offers. Obviously, the quality of the property and its location will drive the demand so property selection will have an influence on the level of competition from other buyers.

We have also started to see Agents and Auctioneers working harder at many auctions. Clearance rates have fallen from their February highs which is also indicative of an increasing gap between buyers and sellers. In most cases there are still a number of registered bidders at property auctions, so when a property passes in with multiple bidders it is often a sign of sellers’ expectations starting to get ahead of the market, or buyers starting to pull back slightly.  Again, this is property dependant, because we have also observed a number of properties sell easily at auction over the last month, well above the price at which the property is announced on the market.

These general observations confirm that buyers are starting to become a bit more selective in terms of what they buy.  In the peak of 2021, everything was selling for a premium.  Now buyers are becoming a bit more picky and choosy, and only those properties that are highly desirable are attracting the same level of buyer competition.

The months ahead …

There are definitely some headwinds for Property Markets around the country. We have an up-and-coming Federal Election which creates a level of uncertainty for many. We have inflationary pressures whereby a higher cost of living will possibly weigh on housing demand. We also have the risk of rising interest rates at some stage in the future. That said, in Brisbane we still have relative affordability compared to the larger markets of Sydney and Melbourne and we are also in a very low supply environment which is very different to Sydney and Melbourne.

For further optimism, we also have an improving economy and low unemployment levels which could lead to income growth helping to maintain housing demand. The announcements from the recent budget have also meant more incentives for first home buyers. Additionally, overseas migration will be positive for maintaining housing demand as well.  In Brisbane the rate of interstate migration also remains strong, putting further pressure on the market in the months ahead.

We have been observing a shift in the demand towards attached dwellings throughout the city, mainly townhouses, which is a segment of the market that we believe will perform strongly. This is because buyers are priced out of houses in the inner and middle ring suburbs of Brisbane due to the recent price growth that has been observed, and therefore will compromise on the property type. Demand in this segment of the market is very strong.

Overall, despite the recent floods, international unrest and other downside risks that have been outlined above, we maintain our view that the property market as a whole in Brisbane remains strong. The fundamentals are still in favour of price growth across all market segments in the foreseeable future. 

– –

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Brisbane property Market Update
Brisbane Property Market Update February 2022

Brisbane Property Market Update February 2022

This article will highlight what has happened in the Brisbane Property Market Update in February 2022.

Brisbane residents have become even more resilient over the last month. We have grown to accept the unexpected. No one imagined that we would see another flood event throughout our city, and yet the significant rain event throughout the last few days of February was enough to see this happen. Despite this intense weather event, Brisbane residential property markets remained the fastest-growing capital city market throughout all of Australia throughout the months of February. It has been a whirlwind of a month!

The driving force behind the continued strong growth in Brisbane is low supply and high demand. There has been a lot of discussion around what impact, if any, the recent flood event will have on the market as we look forward to the weeks and months ahead.

With supply already -30.2% below where we were 12 months ago, and more than 40% below the previous five-year average, it is possible that in some areas supply might tighten further. You can see below that total listing volumes in Brisbane are trending lower than any other capital city market in our country. A decline in listings was something that we experienced following the 2011 floods, so we can often draw from experience to determine what we might see again in this instance.

Brisbane Property Market Update February 2022

Source: SQM Research

A tight supply market is not something that is uniform across all markets in Australia right now as can be seen in the graph above. Brisbane and Adelaide are the two capital cities with the lowest total supply right now, whereas Sydney and Melbourne have returned to more normal supply levels. This helps to explain why Brisbane has continued to see price growth in recent months at the same time as Sydney and Melbourne property price growth has stalled.

When there is low supply, there is less choice for buyers. It creates more urgency and there is a real fear of missing out.

There are some things that we now have to consider that might impact buyer demand in Brisbane. Some buyers might be concerned about the most recent flood event. Other buyers might be feeling uncertain by the unfolding world events, where there is a degree of global uncertainty unfolding around us. 

We do not think that there will be any further immediate impact from Covid-19 now that international borders have reopened, and our country’s vaccination status is high. We also do not think there will be any slow down in interstate migration. Now with international borders open, we are also able to see international migration, which means more people will need somewhere to rent or buy. We are still hosting the Olympic Games in 2032 and we are still building all of the infrastructures that will come as a result of that. We are still one of the most affordable cities to live in within Australia, and our climate and lifestyle remain one of the most sought after in the country. There are still a lot of reasons to believe that the demand for Brisbane property, especially flood-free property, will remain strong through the months ahead.

In this month’s update, we outline the performance of the Brisbane property market across all sectors and provide our insights in terms of the months ahead.

Market Prices – Brisbane Property Market Update February 2022

The latest Hedonic Home Value Index data by CoreLogic released on 1st March 2022 for the month of February 2022, has confirmed that the median dwelling value in Brisbane increased by a further +1.8% over the month. This price growth is lower than November, December, and January, which now reflects a slowdown in the rate of growth across the city. The current median value for dwellings across Greater Brisbane is now $722,433 which is $15,893 higher than one month ago.

Annual growth for the last 12 months for Brisbane Dwellings is now +29.7%.

Qualified Buyers agent Brisbane
Source: CoreLogic

Brisbane’s middle segment of the market has now overtaken the top end of the market in terms of quarterly price growth. For the past several months, the price growth was being led by the top end, however, this trend has now changed.

Brisbane Property Market Update February 2022
Source: CoreLogic

Between last month and now, the growth in the top end of the market slowed because the top 25% of property values across Brisbane was at 9% and it has now dropped to 8.3%. The middle 50% of property values previously saw price growth up to the end of last month of 8.5%, but this has increased slightly to 8.6% this month. The lower segment of the market was previously at 7.2% and is now at 7.3%.  These results indicate that the only segment of the market that has started to slow in terms of price growth is the top end in Brisbane.  This will be something to watch again next month.

Brisbane House Prices – Brisbane Property Market Update February 2022

The Brisbane Housing Market is still the top-performing Housing Market across all capital city locations throughout Australia. Median values for the greater Brisbane region increased a further 1.9% throughout February 2022. The rate of growth has slowed down for the third month in a row, down from the November 2021 high of 3.2%, followed by 3.1% price growth across December, and 2.5% in January. Despite the slight slowdown in the momentum, this is another new record median value for Brisbane Houses. The 12-month change in Brisbane house prices has been 32.8%, which is the strongest 12-month house price growth across all capital cities as well as the rest of state regions throughout Australia.  

The current median value for a house in Greater Brisbane is now $828,175 the highest it has ever been. This is $18,362 MORE than one month ago!  Houses in Brisbane are getting more expensive month-on-month.

Brisbane Property Market Update February 2022
Source: CoreLogic

 

Brisbane Unit Prices – Brisbane Property Market Update February 2022

The Unit Market in Brisbane grew strongly throughout February 2022, reaching a new record high.  Unit median values in Brisbane were up 1.5% this month, compared to 1.4% last month.  The 12-month growth for units across Brisbane is now +14.4%.   The current median unit price in Brisbane is $468,393 which is $10,244 more than one month ago.

Brisbane property Flood
Source: CoreLogic

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 in Greater Brisbane.

Brisbane Property Market Update February 2022

The housing sector (black line) continues to outperform the unit sector in Brisbane on a month-to-month basis, a trend observed since October 2020.  The rate of growth is now slowing in the housing sector.  This means House values are still increasing every month, just at a slightly slower rate.

Below we have charted the actual median value changes for Houses and Units across Greater Brisbane since January 2021.  You can see the median value for Houses across this period increased $244,273.  For units, the median value increased $75,216 throughout the same period of time. 

Brisbane Property Market Update February 2022

 

Rental Market Movements – Brisbane Property Market Update January 2022

Vacancy Rates at a city-wide level in Brisbane fell again between December 2021 and January 2022. They are currently at 1.1%. We have not seen vacancy rates this low in Brisbane since 2006. The table below highlights where vacancy rates across Brisbane sit at the end of January 2022.

Region Vacancy Rate December 2021
(change from November 2021)
Beenleigh Corridor 0.4% (+0.1%)
Brisbane CBD 3.2% (-1.0%)
East Brisbane 1.0% (-0.4%)
Inner Brisbane 2.0% (-0.4%)
Ipswich 0.7% (-0.2%)
Northern Brisbane 0.6% (-0.2%)
South East Brisbane 0.7% (-0.1%)
Southern Brisbane 1.1% (-0.3%)
West Brisbane 0.9% (-0.2%)

Source: SQM Research

Vacancy remained tightened in every sub-region of Greater Brisbane this month as can be seen in the table above. There was a huge recovery in the Inner City market, with Vacancy Rates now sitting at 3.2% – a level not seen in this sub-region since 2013 prior to the oversupply of inner-city units being constructed. Now with international borders open, and the impacts from the recent floods, we expect Vacancy Rates to tighten further in the months ahead.

Housing rents in Brisbane have shown an annual growth trend of 11.3% growth at the end of February, which is slightly less than the annual growth of 11.8% recorded at the end of December 2021. 

Rental incomes in the unit market throughout Brisbane have seen an annual increase of 6.5%. In the last two months, we have seen a slight softening in the rate of rent growth for both houses and units in Brisbane.

Gross rental yields for dwellings across Greater Brisbane according to CoreLogic are 3.6%, unchanged from last month.   

Brisbane property investment

Source: CoreLogic

What did we see on the ground across Brisbane during February 2022?

Buyer demand has remained strong throughout Brisbane during February. On the ground, we have started to notice slightly less competition in the middle and lower price points. Competition at the top level remains fierce and the depth of buyers competing for quality family homes in blue-chip locations is high.

At the top end of the market, most properties are selling by auction with multiple registered bidders. Properties in the middle and lower end of the market in Brisbane are still being sold with multiple offers across the areas in Brisbane that we service. Even properties that are not listed on the main real estate portals, and that are transacting off-market, are often selling with more than one offer. The market conditions are still in favour of the seller with more than one buyer for every property that becomes available.

The months ahead …

We will be able to track next month what happens to those properties that are in low-lying areas that have been impacted by floodwaters in the recent flood event. We don’t expect to see any flood-impacted properties listed for sale in the coming weeks unless a property owner is uninsured and is willing to sell on an “as is” basis. 

We expect the number of listings to fall in locations impacted by the recent flood event. This is similar to what occurred after the 2011 floods in Brisbane.  We also predict that the demand for properties in locations impacted by floodwaters in this flood event will also fall. Many buyers were willing to accept the risk after the 2011 floods, not expecting a similar event to unfold again, especially so soon after, but perhaps it will be harder to forget after two floods in 11 years.

In terms of rental demand, we expect this to peak in locations close to the flood-impacted areas of Brisbane as those impacted look to temporarily relocate whilst their homes are repaired. Given the significant strain already on the construction industry, the timeframe for repairs might also be longer than after the 2011 flood event, so we expect this to put upward pressure on rents. Vacancy rates were already so low before this event, so more people looking to rent, even if only temporarily, will put additional price pressure on this segment of the property market.

In terms of demand, it is possible that the buyers who are already in the market will be more focused on non-flood impacted properties and we could possibly see a heightened level of demand for these locations as buyers become more concentrated to higher areas within a suburb. At this stage, it is too early to tell. But we do expect that some buyers might sit out of the market waiting to see what impacts there will be to property values in the months ahead. Events like this can often affect confidence levels in buyers, especially for those who may not know the local areas well or not understand how to conduct all of the necessary due diligence.

We still expect prices to rise in Brisbane in the months ahead- especially for non-flood impacted properties. There is limited inventory, and the demand remains strong enough that the competition is likely to continue to drive prices. 

Our trajectory for continued price growth remains unchanged, although the price growth momentum may soften. Market conditions are strong and very different from what they were prior to the 2011 floods in Brisbane. Understandably with the federal election looming, rising global uncertainty, and potential changes in interest rates, there remain some elements that could slow growth or stall growth in the future. But for the moment, 2022 still looks very promising for Brisbane property, despite the events that unfolded over the last week in February.

– –

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Brisbane Property Market Update January 2022

Brisbane Property Market Update January 2022

This article will highlight what has happened in the Brisbane Property Market Update January 2022.

In the first month of 2022, Brisbane has again cemented its place as the fastest-growing capital city throughout Australia. This is the third month in a row that growth in Brisbane has outpaced the other capital cities around our Country. The Housing sector continues to drive this growth, outperforming the unit market month on month. As we have consistently said, Australia is NOT one property market and it is important to understand the local supply and demand metrics that exist in a local market to gather insights on the direction of prices in the months ahead.

The main differences between Brisbane and the larger capital cities of Sydney and Melbourne relate to affordability, much tighter supply, and different demographic trends. There is no longer a synchronised and broad-based upswing across all markets of Australia and whilst Brisbane is now leading the growth, there appears to be identifiable reasons for this.

In the more expensive markets of Sydney, Canberra, and Melbourne, the higher property prices cause difficulty for buyers to save a deposit towards a purchase. The median value for a house purchase in these three cities is now above $1,000,000, whereas Brisbane’s median House value has only just exceeded $800,000 this month. Whilst growth has been substantial over the last 12 months in Brisbane, our property prices are still comparatively more affordable than the other major capital city markets in Australia.

Supply continues to be an issue in Brisbane with total listing volumes tracking 37.6% lower in January 2022 compared to 12 months ago. Whilst we usually experience a seasonal trend of lower listings over December and January, this is still well below the five-year average. Moving into the early months of 2022, the number of new listings that we see coming through will determine if supply starts to creep up, thus absorbing some of the consistently strong demand that Brisbane has been experiencing. Only time will tell! 

The table below shows the trend for total listings across all capital city markets according to SQM Research:

Brisbane Property Market Update January 2022Source: SQM Research

Whist we have mentioned the demographic trend that we have been seeing through our own enquiry in recent months where-by Sydney and Melbourne residents are relocating to the South-East, this has now been confirmed by others. Domain’s Head of Research and Economics, Dr. Nicola Powell, has revealed that 26% of property inquiries in Brisbane over the last quarter of 2021 came from southern home hunters. This increased demand on a market already battling with very low supply is continuing to put pressure on prices. Local buyers can’t believe the rate of escalation of property prices, whilst interstate buyers still see our property market as affordable, especially compared to what they might otherwise be able to afford in Sydney or Melbourne.

Auction clearance rates from Domain have only just started to be recorded in January during the last weekend, where Brisbane recorded a clearance rate of 75%. This is similar to the trends that we experienced in the lead-up to Christmas throughout December, but a little lower than the auction clearance rates that we observed throughout October and November. Based on many conversations with auctioneers around Brisbane and also Agents themselves, we are confident that sellers’ expectations are starting to move ahead of the market. We will continue to monitor the clearance rates for Brisbane throughout February to see if this is the case.

Despite the rapid onset of Omicron and Covid-19 in Brisbane and Queensland as a whole, and case numbers escalating rapidly throughout our city, this has had little impact, if any, on the Brisbane property market. Agents have reported that some sellers are a little more reluctant to have large numbers of people through their homes and therefore have delayed listing until we pass the peak of cases. Others have said that sellers have had to delay their sale campaigns because they have contracted Covid-19 themselves and therefore have been in isolation. That said, this seems to be a minority of cases, but it does place slightly more pressure on an already low listing volume market.

In this month’s update, we outline the performance of the Brisbane property market across all sectors and provide our insights in terms of the months ahead.

Market Prices – Brisbane Property Market Update January 2022

The latest Hedonic Home Value Index data by Corelogic released on 1st February 2022 for the month of January 2022, has confirmed that the median dwelling value in Brisbane increased by a further +2.3% over the month. This price growth is slightly less than December, which may be a seasonal trend, or may reflect a slight slowdown in the rate of growth across Brisbane. Brisbane is still in a rapid state of growth in the current cycle. The current median value for dwellings across Greater Brisbane has now broken the $700,000 barrier at $706,594 which is $23,042 higher than just one month ago.

Annual growth for the last 12 months for Brisbane Dwellings is now +29.2%.

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Source: CoreLogic

Brisbane’s higher value properties continue to lead the growth as you can see in the CoreLogic Data below. In the three months to December 2021, the top 25% of values experienced 9% growth (up from 8.1% at the end of November) compared to 7.3% growth in the lowest 25% of property values across the city (up from 5.9% last month). The middle 50% of values in Brisbane saw an increase in the three months to December of 8.5%, compared to 7.1% growth in the three months to November. Whilst all segments of the Brisbane market are in a strong growth phase right now, the trend that we have seen emerge over the last 2 months is that the middle and lower value properties have been growing at a slightly faster rate than the top segment of the market, despite the highest value properties continuing to lead growth over a 3 month period. This is an interesting trend and may be reflective of the fact that affordability constraints may be starting to show at the top end of the market, or alternatively, a lot of home buyers (who typically make up the top end of the market in Brisbane) may have been less active in the lead up to Christmas, thereby dampening demand to a small extent. We will follow this trend closely next month. 

Investing in Brisbane Property
Source: CoreLogic

Brisbane House Prices – Brisbane Property Market Update January 2022

The Brisbane Housing Market continues to lead the nation in terms of monthly price growth. Median values for the greater Brisbane region increased a further 2.5% in the first month of 2022. The rate of growth has slowed down for the second month in a row, down from the November 2021 high of 3.2%, followed by 3.1% price growth across December, which may also be the result of a seasonal trend – but something to watch in the next couple of months. This is yet another new record median value for Brisbane Houses. The 12-month change in Brisbane house prices has been 32.3%, which is the strongest 12-month house price growth across all capital cities throughout Australia.  

The current median value for a house in Greater Brisbane is now $809,813 the highest it has ever been.  This is $26,846 MORE than one month ago! Every month the median value for Houses in greater Brisbane just keeps growing! 

Buyers Agent Brisbane
Source: CoreLogic

 

Brisbane Unit Prices – Brisbane Property Market Update January 2022

The Unit Market in Brisbane experienced slightly softer growth throughout January 2022, but still reached a new record high. Unit median values in Brisbane were up 1.4% this month, compared to 1.6% last month. The 12-month growth for units across Brisbane is now +12.7%.  The current median unit price in Brisbane is $458,149 which is $6,893 more than one month ago.

Brisbane Property Market Update January 2022
Source: CoreLogic

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 in Greater Brisbane.

Brisbane Property Market Update January 2022

The housing sector (shown above in the black line) continues to outperform the unit sector (shown above in the blue line) in Brisbane on a month-to-month basis, a trend observed since October 2020.  We can now clearly see the rate of growth starting to slow in the housing sector, a trend that may be seasonal or indicative of a slight slow down in the market growth. This is a trend we are watching. 

Below we have charted the actual median value changes for Houses and Units across Greater Brisbane since January 2021. You can see the median value for Houses across this period increased by $225,911. For units, the median value increased $64,972 throughout the same period of time. 

Brisbane Property Market Update January 2022

 

Rental Market Movements – Brisbane Property Market Update January 2022

Vacancy Rates at a city-wide level in Brisbane remained unchanged between November and December 2021 and are currently at 1.3%. The table below highlights where vacancy rates across Brisbane sit at the end of December 2021.

Region Vacancy Rate December 2021
(change from November 2021)
Beenleigh Corridor 0.5% (+0.1%)
Brisbane CBD 4.2% (-0.5%)
East Brisbane 1.4% (-0.1%)
Inner Brisbane 2.4% (+0.1%)
Ipswich 0.9% (-0.2%)
Northern Brisbane 0.8% (+0.1%)
South East Brisbane 0.8% (-)
Southern Brisbane 1.4% (-)
West Brisbane 1.1% (+0.1%)

Source: SQM Research

Vacancy remained relatively unchanged this month with some slight movements across different sub-regions throughout Greater Brisbane as can be seen in the table above. A reduction in vacancy in the inner city market has been a trend observed for the last 2 months, suggesting that the higher density apartment market might be starting to recover. This is another trend we are following closely month-to-month.

Housing rents in Brisbane have shown an annual growth trend of 11.6% growth at the end of January, which is slightly less than the annual growth of 11.8% recorded at the end of December 2021. January is typically the busiest time to rent out a property so again this might be a seasonal trend, but it does indicate rents achieved this month in Brisbane have pulled back slightly compared to recent months. 

Rental incomes in the unit market throughout Brisbane have seen an annual increase of 6.7%, again slightly down from 6.9% last month.   

Gross rental yields for dwellings across Greater Brisbane according to CoreLogic are lower again this month due to the consistently strong increase in property values. As of the end of January 2022, the gross yield in Brisbane is 3.6%, down a further  -0.1% compared to last month. 

Investment properties in Brisbane

 

What did we see on the ground across Brisbane during January 2022?

The new year started strongly with buyers showing up for the first weekend of open homes in high numbers. We expected with state borders opening that this was going to be the case. Demand is still strong for quality properties throughout the city.

There was a marked increase in buyer activity on the weekend after Australia Day, which is something we also seem to observe every year. Line ups were common early in 2021 but rarely did we experience line ups towards the end of the year. Open homes were still very busy towards the latter part of 2021 – but we could usually enter open homes straight away and not endure long line ups outside.

Properties still have multiple buyers and therefore are still selling with multiple offers. The market remains highly competitive, and buyers need to be thinking about how to make their offer more appealing than others in these circumstances. When sellers get to choose from multiple offers presented, the terms of an offer, as well as price, become very important.

The months ahead …

Based on our early observations, we expect 2022 will remain strong and property price growth will continue in Brisbane. There are simply too many buyers competing for such limited inventory, and therefore the competition will continue to drive prices. 

Unless we see a large volume of new listings come to the market in the early months of 2022, the trajectory for continued price growth remains unchanged. Market conditions are strong and 2022 looks promising for Brisbane property.

Of course, headwinds remain in the future with potential interest rate hikes, a federal election, and tighter credit availability. These things can influence markets as they arise, however at the moment the market is buoyant and strong.

– –

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Brisbane Property Market Update December 2021

Brisbane Property Market Update December 2021

This article will highlight what has happened in the Brisbane Property Market Update December 2021.

Brisbane continues to be the fastest-growing capital city throughout all of Australia according to CoreLogic Data released on 4th January 2022. Our city continues to lead price growth throughout the nation, reaching a new cyclical high in the last quarter of 2021.

The strong price growth is partly driven by continued low supply in Brisbane. The number of properties available for sale in the period up to 5th December 2021 was -27.2% lower than the equivalent period last year according to Corelogic data.  This contrasts with other capitals such as Sydney and Melbourne, where listing numbers are equivalent to or greater than the same time last year.

Brisbane Property Market Update December 2021
Source: CoreLogic

Looking at auction clearance rates from Domain throughout December, we saw Brisbane perform between 72% and 75% across the 3 weeks up until Christmas. This is much higher than previous years but a little lower than the recent trends we observed throughout October and November.  This could be due to fewer buyers in the market throughout December, or sellers’ expectations starting to move ahead of the market. Time will tell as the early auction clearance rates for 2022 become apparent.

In terms of longer-term demand, one contributor (although not the only contributor of course) is population growth and in the 2021 financial year, interstate migration to south-east Queensland surged to the highest level since the early 2000s with overall population growth reaching +45,900 which came at the expense of other states whose population numbers declined – especially Victoria.

With job opportunities still rising according to the Department of Employment, there is also continued positivity insight. The total number of job advertisements in Queensland, seasonally adjusted, is up 57% from pre-Covid levels. This is certainly reassuring for our local economy as we move into the early months of 2022.

Unlike other capital cities around Australia, despite the recent price growth that has been experienced, Brisbane remains one of the more affordable options for property buyers. We are also amongst the highest yielding capital cities as well.

With a pending federal election this year we expect housing affordability to become a hot topic for the major political parties in the months ahead. We also have the threat of Omicron and Covid-19 with case numbers escalating rapidly throughout Brisbane and South-East Queensland now that borders have opened. 

In this month’s update, we outline the performance of the Brisbane property market across all sectors and provide our insights in terms of the months ahead.

 

Brisbane Property Market Update December 2021 – Market Prices

The latest Hedonic Home Value Index data by Corelogic released on 4th January 2022 for the month of December 2021, has confirmed that the median dwelling value in Brisbane increased by a further +2.9% over the month. This price growth is the same rate of price growth when compared to what we observed in Brisbane last month. This confirms that Brisbane is still at its peak rate of growth in the current cycle, with no slow down yet to be observed in dwelling price growth. The current median value for dwellings across Greater Brisbane is $683,552 which is $22.353 higher than just one month ago.

The quarterly growth in dwelling values across Greater Brisbane is now up 8.5%. Annual growth for the last 12 months for Brisbane Dwellings is now +27.4%.

Best Buyers Agent Brisbane
Source: CoreLogic

Brisbane’s higher value properties remain at the forefront for price growth as you can see in the CoreLogic Data below.  In the three months to November 2021, the top 25% of values experienced 8.1% growth (up from 7.3% at the end of October) compared to 5.9% growth in the lowest 25% of property values across the city (up from 5% last month).  The middle 50% of values in Brisbane saw an increase in the three months to November of 7.1%, compared to 6.1% growth in the three months to October.  All segments of the Brisbane market are in a strong growth phase right now, but the top end of the market is still growing at the fastest pace when we look at 3-month trends segregated by price point.  Looking at the data even closer, we can see that when we compare the last two updates for this data, the trend is showing that the top 25% of values demonstrated 3-month growth that was up 0.8% (ie: the 3-month trend between the end of October and the end of November 2021 showed a further increase of 0.8% in this price segment), the middle 50% of values were up 1% and the bottom end of the market was up 0.9%. This is a trend worth watching closely, especially if the Brisbane market moves into a price point where affordability constraints start to have an impact.

Brisbane Property Market Update December 2021
Source: CoreLogic

 

Brisbane Property Market Update December 2021 – House Prices

The Brisbane Housing Market continues to lead the nation in terms of monthly price growth. Median values for the greater Brisbane region increased a further 3.1% in the month of December 2021, down just slightly from the November 2021 high of 3.2% price growth. This is yet another new record median value for Brisbane. The 12-month change in Brisbane house prices has been 30.4%, which is the strongest 12-month house price growth across all capital cities throughout Australia.  

The current median value for a house in Greater Brisbane is now $782,967, the highest it has ever been.  This is $25,773 MORE than one month ago!  Every month the median value for greater Brisbane just keeps growing. 

Brisbane Property Market Update December 2021
Source: CoreLogic

 

Brisbane Property Market Update December 2021 – Unit Prices

The Unit Market in Brisbane picked up again throughout December 2021. Unit median values in Brisbane were up 1.6% this month, compared to 1.1% last month. The 12-month growth for units across Brisbane is now +12.7%.  The current median unit price in Brisbane is $451,256 which is $7,275 more than one month ago.

Brisbane Property Market Update December 2021
Source: CoreLogic

 

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 in Greater Brisbane.

Brisbane Property Market Update December 2021

 

The housing sector (black line) continues to outperform the unit sector in Brisbane on a month-to-month basis.  This has been a trend observed since October 2020.  We can clearly observe a divergence in the rate of growth on a month-by-month basis in the different property types. 

Below we have charted the actual median value changes for Houses and Units across Greater Brisbane for the full year of 2021. You can see the median value for Houses across the year increased by $199,065.  For units, the median value increased by $58,079 throughout the same period of time. In simple terms, the growth in the dollar value of Houses has been 3.43 times the growth in the dollar value of Units throughout Greater Brisbane throughout 2021.

Brisbane Property Market Update December 2021

 

Brisbane Property Market Update December 2021 – Rental Market Movements

Vacancy Rates at a city-wide level in Brisbane tightened slightly between October and November and are currently at 1.3% (down from 1.4% last month). The table below highlights where vacancy rates across Brisbane sit at the end of November 2021.

Region Vacancy Rate November 2021
(change from October 2021)
Beenleigh Corridor 0.4% (-0.2%)
Brisbane CBD 4.7% (-0.2%)
East Brisbane 1.5% (+0.1%)
Inner Brisbane 2.3% (-0.1%)
Ipswich 0.7% (-0.1%)
Northern Brisbane 0.7% (-0.1%)
South East Brisbane 0.8% (+0.1%)
Southern Brisbane 1.4% (-0.1%)
West Brisbane 1.0% (-0.2%)

Source: SQM Research

 

Vacancy changes only very sightly this month across every sub-region throughout Greater Brisbane as can be seen in the table above.  These tight vacancy rates are continuing to put upward pressure on rents throughout the city. 

Housing rents have demonstrated annual growth in Brisbane of 11.8% according to CoreLogic Data, which is up only slightly, a further +0.1%, compared to one month ago.

Rental incomes in the unit market throughout Brisbane have seen an annual increase of 6.9% up only +0.1% compared to last month also. 

Gross rental yields for dwellings across all of Greater Brisbane according to CoreLogic remained have slipped slightly lower again this month due to property values rising faster than rents. As of the end of December, the gross yield in Brisbane is 3.7%, down a further  -0.1% compared to last month. 

Brisbane Property Market Update December 2021

 

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

There was definitely a slow down in buyer activity in the weeks leading up to Christmas in December 2021. This is a seasonal trend that is observed as people tend to focus on the festive season and family events.

Despite the slightly reduced demand, there were still enough buyers who were active in the market to cause multiple offers on most properties.  It was the depth of buyers that was the change we observed throughout the month. So instead of competing with 15-20 buyers when submitting offers on properties, it was more commonly only 4-6 other buyers.  It was a nice reprieve after such a competitive year.

Most listing activity on the main real estate online portals stopped mid-month with the last busy Saturday for inspections and auctions being 18th December in 2021. Whilst some Agents were happy to continue transacting off-market right up until Christmas Eve, the majority of agents were winding up at this time, looking forward to a well-earned break over the Christmas and new year period.

 

The months ahead …

Now that State and International borders are open, we do expect to see a renewed spike in the demand for Brisbane property.  This may place additional pressure on prices in the absence of a corresponding increase in new properties being listed for sale – especially in the short term.

Of course, we also have the rising threat of Covid-19, with the rapid increase in infection numbers occurring daily as it spreads throughout South-East Queensland. With strong rates of vaccination, we are hopeful that this will have little impact on the health of those exposed, but also on our economy that has continued to thrive without extensive lockdowns slowing things down. We expect there to be short-term inconveniences associated with an increase in case numbers, but at this stage, we do not expect that this will impact supply or demand in the local property market here in Brisbane.

The first few months of 2022 are expected to see continued strong price growth, especially in the housing market, here in Brisbane. There will come a time in the near future when the housing growth rates peak, and buyers may turn to the more affordable option of units to stay within their desired suburbs. From an affordability perspective, this also makes sense, with unit values showing much slower rates of growth in Brisbane compared to houses in recent times. 

We expect 2022 to be another exciting year for Brisbane property and price growth should continue based on the supply and demand metrics currently at play. For how long this lasts, not one really knows. But when we see either a fall in demand or an increase in supply on the ground, this will be the first sign of a market shift and we will report on this when it happens. Here’s to 2022 and everything that it will bring!

– –

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Brisbane Property Market Update November 2021

Brisbane Property Market Update November 2021

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

Brisbane Property Market Update November 2021 and Brisbane has now cemented its place as the fastest-growing capital city market throughout Australia. During November, Brisbane led the way in terms of dwelling price growth, ahead of all other capitals, but even more so in the housing market compared to the unit market.

And there are few surprises as to why this has happened. 

Housing affordability is less pressing in Brisbane, and we have had fewer lockdowns due to Covid-19. Additionally, we have continued to see a positive rate of migration, especially from those moving interstate. This continues to fuel the housing demand throughout the city.

Listing volumes are also a lot lower in Brisbane with -33.9% fewer properties available for sale in the 4 weeks up to 28th November 2021, compared with the five-year average. This is different from Sydney, where listing volumes are more in line with the long-term average, and Melbourne, where listing volumes are actually +7.9% above the long-term average. These differences in supply dynamics are certainly playing a part in the upward price growth momentum in Brisbane.

With the stimulus from the federal government boosting construction, new builds in fresh estates are thriving, but this is having little impact on the low supply levels of established properties in locations where there is a scarcity of land and high demand.   These are the locations where we are seeing maximum price growth.

A number of predictions have been made in relation to the direction of the Brisbane market both next year and into 2023.  According to some of the big banks and also SQM Research, the outlook for 2022 looks positive, regardless of the projected scenario. 

Brisbane Property Market Update November 2021

Source: SQM Research

Looking further ahead towards 2023, the predictions for Brisbane property values range from price falls of -1% (Westpac) to price falls of -8% (Commonwealth Bank). Obviously, as we look further into the future, the assumptions are also less reliable.  Therefore, we prefer to report on the outlook once we have more certainty about when there will be any potential increase in interest rates as well as other impacts that could influence the demand for property such as changes to credit policies and the economic recovery as a whole. 

This month we did see tighter credit conditions come into effect with new applications for finance now being assessed with an interest rate buffer of 3% above the current mortgage rates, which is an increase of 0.5% from where it was prior.  We are yet to see any impact associated with this change throughout Brisbane.

There is definitely no slowdown in the demand for property in Brisbane at this time. In fact, sales volumes have been 51.5% higher in the 12 months up to October 2021 compared to the same period last year. There is a high volume of property transactions occurring, which is evidence of the confidence that buyers have in the Brisbane market.

There has been a shift in the composition of buyers recently with lending data now showing that first home buyers have dropped to 26.9% of all loan commitments.  Instead, we are seeing an uplift in investment buyers with investors now making up 32.8% of all lending commitments across Queensland.

Whilst fixed interest rates have started to climb, the Reserve Bank has been clear in that a number of conditions need to be met before the official cash rate does increase.  Specifically, they have confirmed that the inflation rate needs to be sustained within the 2-3% range before any changes will be made.  The latest inflation figures showed a rebound in the last quarter, although the factors contributing to this result (ie: higher commodity prices and supply chain issued) may be mitigated over time.  Additionally, with international borders reopening, wages growth may be suppressed, another factor that may delay any sustainable change to inflation.  Time will tell, but when the official cash rate does start to rise (and it will at some point) then it is likely that the rate of any increases will be gradual so that any impacts on the economy can be assessed.

With the vaccine roll-out in place, we also now find ourselves in a position where international migration will again be possible.  This will add further ongoing demand to housing markets.

In this month’s update, we outline the performance of the Brisbane property market across all sectors.

 

Brisbane Property Market Update November 2021 – Prices

The latest Hedonic Home Value Index data by CoreLogic released on 1st December 2021, has confirmed that the median dwelling value in Brisbane increased by +2.9% over the month of November.  This price growth is a further +0.5% growth compared to the growth observed in Brisbane last month, which is evidence that in Brisbane, the momentum of price growth continues to accelerate.  The current median value for dwellings across Greater Brisbane is $662,199 which is $20,102 higher than just one month ago.

The quarterly growth in dwelling values across Greater Brisbane is now up 7.4%.  Annual growth for the last 12 months for Brisbane Dwellings is now +25.1%.

Brisbane Property Market Update November 2021

Source: CoreLogic

Brisbane’s higher value properties are still driving the growth as you can see in the CoreLogic Data below.  In the three months to October 2021, the top 25% of values experienced 7.3% growth (up from 6.7% at the end of September) compared to 5% growth in the lowest 25% of property values across the city (up from 4.2% last month).  Even the middle 50% of values in Brisbane saw an increase in the three months to October of 6.1%, compared to 5.7% growth in the three months to September.  All segments of the Brisbane market are in a strong growth phase right now, but the top end of the market is growing at the fastest pace.

Brisbane Property Market Update November 2021

Source: CoreLogic

 

Brisbane Property Market Update November 2021 – House Prices

The Brisbane Housing Market is on fire!  We saw median values for the greater Brisbane region increase 3.2% in just one months throughout November, up from 2.8% growth throughout October.   This is a new record high for monthly growth figures recorded for Brisbane in the current property boom.  The 12-month change in Brisbane house prices has been 27.9%.   The current median value for a house in Greater Brisbane is now $757,194, the highest it has ever been. This is $25,802 MORE than one month ago!  Every month this seems to keep growing and growing.

Brisbane Property Market Update November 2021

Source: CoreLogic

 

Brisbane Property Market Update November 2021 – Unit Prices

The Unit Market in Brisbane retracted slightly again in its rate of growth throughout November 2021. Units were up 1.1% this month, compared to 1.3% last month. The 12-month growth for units across Brisbane is now +11.4%. The current median unit price in Brisbane is $443,981 which is $6,895 more than one month ago.

Brisbane Property Market Update November 2021

Source: CoreLogic

 

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 November 2021

It is obvious that the housing sector is continuing to outperform the unit sector in Brisbane on a month-to-month basis.  This has been a trend observed since October 2020 and has become especially apparent in the last 2 months where we can clearly observe a divergence in the rate of growth in the different property types. 

Below we have charted the actual median value changes for Houses and Units across Greater Brisbane since January 2021.  You can see the median value for Houses has increased $173,292 over the last 11 months, whereas the median value for units has increased $50,804 across the same period of time.  In simple terms, the growth in the dollar value of Houses has been 3.4 times the growth in the dollar value of Units throughout Greater Brisbane during 2021.

Brisbane Property Market Update November 2021\

 

Brisbane Rental Market Movements

Vacancy Rates at a city-wide level in Brisbane remained stable between September and October, at 1.4%.  The table below highlights where vacancy rates across Brisbane sit at the end of October 2021.

Region Vacancy Rate September 2021
(change from August 2021)
Beenleigh Corridor 0.6% (-)
Brisbane CBD 4.9% (-)
East Brisbane 1.4% (-)
Inner Brisbane 2.4% (-0.1%)
Ipswich 0.8% (-)
Northern Brisbane 0.8% (+0.1)
South East Brisbane 0.7% (-0.1%)
Southern Brisbane 1.5% (-)
West Brisbane 1.2% (-)

Source: SQM Research

Vacancy remained relatively unchanged this month across every sub-region throughout Greater Brisbane.  These tight vacancy rates are continuing to put upward pressure on rents throughout the city. 

Housing rents have demonstrated annual growth in Brisbane of 11.7% according to CoreLogic Data, which is up a further +0.4% compared to one month ago.

Rental incomes in the unit market throughout Brisbane have seen an annual increase of 6.8% up +0.3% compared to last month. 

Gross rental yields for dwellings across all of Greater Brisbane according to CoreLogic remained have slipped slightly lower this month due to property values rising faster than rents.  As at the end of November, the gross yield in Brisbane is 3.8% , down -0.1% compared to last month. 

Brisbane Property Market Update November 2021

 

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

In the first couple of weeks of November, our team noticed a huge jump in the prices that some buyers were prepared to pay for properties. This eased a little towards the latter part of the month.  Perhaps some buyers made a last-ditch effort to throw everything on the table, fatigued from missing out several times throughout the year, in an attempt to move into a new home before Christmas?

Whatever the reason, buyers were stretching to buy.  We often thought that there would be valuation risk with some prices that were being achieved.  But for many buyers who have stronger equity positions or additional cash, a valuation shortfall is less problematic.

Of course, prices achieved are now the new baseline for property values in Brisbane so as the market moves aggressively upwards, we have to readjust our expectations for what a specific budget will buy.

Open homes are still well attended, although the number of groups through has been declining compared to a few months prior.  The actual demand is quite property-specific, with multiple offers still being achieved for most private treaty sales. 

Auctions that we attended throughout the month were also very well attended with a strong number of registered bidders competing for quality properties.

 

The months ahead …

As we head into the festive season we do expect the number of active buyers to reduce as people focus more on Christmas shopping rather than property shopping.  At the same time, we also expect that the number of properties that become available for sale will also drop off sharply as we head into December. This is a seasonal trend that we do not expect will be any different this year.

With the planned State border openings in December, we do expect that the buyer depth will return quickly early in the New Year as those who are relocating become buyers who will compete with the already heightened demand here in Brisbane.  

Of course, not all people who relocate will buy, so we also expect a further tightening in vacancies early in 2022.  With Brisbane already experiencing a tight rental market, it is likely that tenants will find it even more difficult to secure a property as more people compete for limited stock.

At some stage, we do expect that the rate of growth in Brisbane will start to slow, and this is likely to occur at some stage throughout 2022, perhaps once house prices increase to a level where affordability constraints become an issue. Additionally, further tightening of credit policies and increases in fixed interest rates could slow some of the housing activity or even an increase in listings which is a trend already observed in Sydney and Melbourne.

That said, there are no signs of any of the above at this stage, so hold on for the ride everyone.  Brisbane property growth is leading the nation and we expect this may continue in the months ahead.

– –

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Brisbane Property Market Update October 2021

Brisbane Property Market Update October 2021

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

Brisbane Property Market Update October 2021 – Brisbane has experienced a bumper month during October in the residential property market. Prices have really taken off, bucking the national trend, gaining momentum throughout the month. This article will highlight what has been happening and why.

Supply remains very low according to CoreLogic data. The total volume of listed properties available for sale in Brisbane, was -31.3% lower for the 4 weeks ending 3 October 2021, compared to the equivalent period last year. New listings over the same period were +2.3% higher in Brisbane, which really is not enough to satisfy the demand from buyers who are actively looking to purchase in our City.

On the contrary, demand is still extremely high, especially for detached houses throughout the inner and middle ring suburbs.  Auction clearance rates, according to Domain, have remained historically high for Brisbane being recorded at 69% through to 88% every weekend throughout October. This is unusual for Brisbane which traditionally has not had the same appetite for auctions compared to Sydney and Melbourne. It seems this trend is gradually changing as both buyers and sellers become more confident in this way of transacting property.

Westpac released their property price forecasts recently which indicated that the Brisbane Property Market is expected to grow 22% in 2021 (which has actually already been exceeded) and then a further 10% in 2022. Based on the imbalance between supply and demand throughout the city, we also expect prices to continue to escalate.

It is acknowledged that recent moves by regulators to restrict lending to property buyers will decrease the borrowing capacity of new buyers by about 5 percent. This is, however, likely to have a much higher impact in the regions where there is the largest gap between property prices and incomes.

The table below highlights the price to income ratios for dwellings, houses, and units in each of the three largest capital city markets. Incomes were assessed based on the Greater City Regions from the 2016 Census, whereas median values as of 1 November 2021 have been used.

Location Sydney Melbourne Brisbane
Weekly Family Incomes $1,750 $1,542 $1,562
Annualised Family Incomes $91,000 $80,184 $81,224
Median Value – Dwellings $1,071,709 $780,303 $642,097
Median Value – Houses $1,333,767 $972,659 $731,392
Median Value – Units $837,262 $621,898 $437,086
Dwelling Price to Income Ratio 11.8 9.7 7.9
House Price to Income Ratio 14.7 12.1 9.0
Unit Price to Income Ratio 9.2 7.8 5.4

 

Obviously, it is important to also consider the disparity between property prices and incomes at a more local level, however, when we review this information, the majority of areas with the largest gaps between prices and income levels are also in Melbourne and Sydney. A recent report by RiskWise showed that prices in the eastern suburbs of Sydney were more than 22 times the typical income of residents, whilst northern beaches and north shore prices were 15 times income levels.

In Melbourne, the regions most affected were in the inner east and inner south, along with the Mornington Peninsula with prices in these locations more than nine times income levels.

RiskWise founder, Doron Peleg, said buyers were already stretching themselves to get into these markets and a reduction in borrowing capacity would have a “noticeable impact on market dynamics.”  Because Brisbane is a much more affordable market as a whole, there is likely to be less risk that the recent changes will impact the market in the foreseeable future.

Queensland also has recently seen a surge in the number of job advertisements with an 8.5% increase to the end of September 2021. Over the last 12 months, the number of job advertisements has increased 54.1% across the State, which is a strong result. This is reassuring as local businesses appear to be more enthusiastic about the months ahead, perhaps in part due to the borders opening up in the near future.

With the strongest market movements across October, it is important to recognise that not all areas throughout the city are performing the same way. Let’s take a deeper look into the performance of the Brisbane market throughout October 2021.

 

Brisbane Property Market Prices

The latest Hedonic Home Value Index data by CoreLogic released on 1st November 2021, has confirmed that the median dwelling value in Brisbane increased by +2.54% over the month of October, which is 0.75% HIGHER than last month.  This level of growth confirms that in Brisbane, the momentum of price growth across the city is picking up once again.  The current median value for dwellings across Greater Brisbane is $642,097 which is $16,806 higher than just one month ago.

The quarterly growth in dwelling values across Greater Brisbane has now jumped to +6.5%, an apparent pick up since last month, and annual growth for the last 12 months is now +22.3%.

Brisbane Property Market Update October 2021

Source: CoreLogic

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 is still within the top end of the market. In the three months to September 2021, the top 25% of values experienced 6.7% growth in that market segment compared to 4.2% growth in the lowest 25% of values across the city. 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 October 2021

Brisbane Property Market Update October 2021 – House Prices

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 2.8% across the month of October 2021 which is substantially higher than the 2% growth recorded in September.  This is the highest monthly growth recorded for Brisbane in property boom. The 12 month change in Brisbane house prices has been 24.8%.  The current median value for a house in Greater Brisbane is currently $731,392, the highest it has ever been.  This is $22,156 MORE than one month ago!

Brisbane Property Market Update October 2021

Source: CoreLogic

Brisbane Property Market Update October 2021 – Unit Prices

The Unit Market in Brisbane saw a further pick up also.  After a slower month throughout September when greater Brisbane Units grew +0.6%, October experienced an increase of +1.3% growth. The 12-month growth for units across Brisbane is now +10.4%.  The current median unit price in Brisbane is $437,086, which is $7,086 more than one month ago.

Brisbane Property Market Update October 2021

Source: CoreLogic

 

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 October 2021

The trendlines here show that the housing sector is continuing to outperform the unit sector on a month-to-month basis. This has been a trend observed since October 2020. This graph also demonstrates the large spike in price growth throughout the last month in Brisbane, especially in the housing sector of the market.

Below we have charted the actual median value changes for Houses and Units across Greater Brisbane since January 2021. You can see Houses have increased $147,490 over the last 10 months, whereas units have increased $43,909 across the same period of time.

Brisbane Property Market Update October 2021

 

Brisbane Rental Market Movements

Vacancy Rates at a city-wide level in Brisbane increased slightly between August and September, shifting to 1.4%.  In the months prior, Vacancy has remained unchanged at 1.3% since May this year.  The small increase in the City-wide values has come from the inner-city locations. The table below highlights where vacancy rates across Brisbane sit at the end of September 2021.

Region Vacancy Rate September 2021
(change from August 2021)
Beenleigh Corridor 0.6% (+0.1%)
Brisbane CBD 4.9% (+0.3%)
East Brisbane 1.4% (+0.1%)
Inner Brisbane 2.5% (+0.2%)
Ipswich 0.8% (-)
Northern Brisbane 0.7% (-)
South East Brisbane 0.8% (-)
Southern Brisbane 1.5% (+0.1)
West Brisbane 1.2% (-)

Source: SQM Research

The Brisbane CBD saw a further increase in Vacancy this month, so this is a firm trend that we have seen for the last three consecutive months.  Additionally, in the Inner Brisbane location vacancy looks to be trending upwards also. The rest of Great Brisbane remains low with limited stock available for tenants.  This is especially evident in the middle and outer ring locations of Greater Brisbane. 

The tight vacancy rates are contributing to rental price growth throughout Brisbane. 

Housing rents have demonstrated annual growth in Brisbane of 11.4% according to CoreLogic Data, which is up a further +0.6% compared to one month ago.

Rental incomes in the unit market throughout Brisbane have seen an annual increase of 6.5% up +0.3% compared to last month. 

Gross rental yields for dwellings across all of Greater Brisbane according to CoreLogic remained at 3.9% throughout October. This remained unchanged compared to last month.

Brisbane Property Market Update October 2021

 

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

We have noticed the huge stretch factor that some buyers are putting forward to secure quality properties throughout the city. When we consider the prices that have been achieved at auctions over the most recent few weeks, it is hard to look back and see what we were previously paying for similar properties just a few short months ago. The rate of the market movement throughout Brisbane has been truly incredible.

Of course, the buyer depth varies throughout different suburbs around the city. Whilst the market is strong, even C-Grade properties are selling fast as buyers are making compromises just to get into the market. Many have forgotten the significant impact of the floods 10 years ago and paying top dollar for properties in flood zones. Main road properties are also being snapped up by buyers who are just trying to get into the market and are otherwise priced out of those locations.

Of course, we never recommend making these types of compromises when the property is typically held for longer periods of time. At some stage, the market will turn. We always recommend buying the types of properties that will be in high demand despite market conditions. 

But regardless of these types of impacts, there seem to be multiple buyers for every property in Brisbane right now. The further away from the CBD that we look, generally the buyer depth starts to thin out more and more. Obviously, there is a related scarcity factor in that trend, which is something buyers need to be aware of when hoping to achieve both short-term and more sustained long-term capital growth.

 

The months ahead …

We do not expect to see prices stabilise in Brisbane for some time yet. We are confident that prices will continue to grow, especially in the housing sector where the demand is the strongest throughout the city.

Buyer inquiry is still strong, especially from property investors who are priced out of the more expensive southern capital cities. Whilst the demand for more affordable property remains strong, we expect to see property values continue to rise.

There will be a slow down in the weeks leading up to Christmas, where listing volumes will decline and perhaps buyers will focus more on Christmas shopping rather than property shopping. We then expect a resurgence in the new year. Of course, time will tell.

 

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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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