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“Hold on for the ride everyone … Brisbane really is on fire. It is a very exciting time for our city!”
3-8-2021
Brisbane’s snap lockdown is giving agents, investors and prospective homebuyers time to take a breath, but pent-up demand is likely to drive a fast market rebound once the city is reopened.
With the excitement of winning the right to host the 2032 Olympics still reverberating around the city, Brisbane’s lockdown is doing little to dampen buyer enthusiasm and is likely to have little impact on price growth.
Plans can finally be set in concrete for Brisbane’s Olympic transformation, 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 has bucked the national trend in terms of house price growth in recent months.
Brisbane 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 three 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, attributed the loss of steam in the Sydney and Melbourne markets since March to several factors, one of which was 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 Hobart 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.
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 per cent of all housing finance commitments in Queensland going to investors.
While this is still a small proportion as compared to owner-occupiers, 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.
Looking at the mismatch between demand and advertised supply, we can still see why Brisbane markets are strong.
Sales volumes have increased 44 per cent in Brisbane over the 12 month period leading up to Jun 2021, whereas total listing volumes had declined by 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 deeper look into the performance of the Brisbane market over the last month.
Brisbane Property Market Prices
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 per cent suggesting a slight pick up again since last month, and annual growth for the last 12 months is now 15.9 per cent.
Brisbane House Prices
The 12 month change in Brisbane house prices has been 17.7 per cent.
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 Rental Market Movements
Vacancy rates in Brisbane remained unchanged between May and June, staying at 1.3 per cent city-wide.
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, with rental incomes in the unit market during July having seen an annual increase of 4.6 per cent, up 0.8 per cent compared to last month.
Housing rents are still climbing faster, with the annual increase in rents for Brisbane Houses now at 9.4 per cent according to Corelogic Data, which is 1 per cent higher than a month ago.
At a city wide level, gross rents have dropped slightly to 4.0 per cent in July, down 0.1 per cent from last month. This is still very attractive compared to Sydney at 2.5 per cent and Melbourne at 2.8 per cent.