- Dwelling values are up by 10.6% over the past year, according to CoreLogic
- SQM Research shows that Brisbane's vacancy rate is 0.7%
- Real estate practitioners expect Brisbane to continue
While most media attention surrounding property prices is drawn towards Melbourne and Sydney, one market that has experienced astonishing growth is Brisbane.
As of June, Brisbane dwelling values are up by 10.6% over the past year and are at new highs, according to CoreLogic.
A factor influencing this is strong interstate migration towards Queensland. Along with increased property prices, this has triggered a significant tightening of rental vacancies in Brisbane.
SQM Research shows that as of May 2022, the vacancy rate in Brisbane is 0.7% – almost half of what it was just a year. Combined rents in Brisbane are also up by 18.6%.
“Reductions in household size, short term stay listings eating into longer term lease availability and now the likely rise in immigration levels, are all factors contributing to this crisis,” said Louis Christopher, managing director of SQM Research.
So, what’s in store for Brisbane 2022?
Antonia Mercorella, Real Estate Institute of Queensland (REIQ) CEO, noted that Queensland’s resilient property market is defying the downturn experienced in the southern states.
The REIQ’s own data showed median house prices rose by 3.23% during the first quarter of 2022, and median unit prices rose by 2.17%.
“Over the past two years, the story of Queensland’s property market has been an extraordinarily positive one from a seller’s perspective, and the latest quarterly data tells us the Sunshine State market is still a rising star,” Ms Mercorella said.
“The first quarter of 2022 has been fraught with disruptions such as COVID-19 outbreaks, the flooding disaster, the string of long weekends including the standstill of Easter, the looming Federal election, and signs pointing to an interest rate rise, with some banks adjusting early in anticipation.
Antonia Mercorella, Real Estate Institute of Queensland (REIQ) CEO
“Despite all of these disruptive events which may have caused some buyers to hit pause on their search, the market has continued to deliver healthy growth, and I’m sure the median prices reached this quarter will take some of us by surprise.”
Ms Mercorella noted that Brisbane’s local government area has reached the million dollar median house price mark.
“While this may be sombre news for some, this still represents relative affordability compared to southern states, and arguably our capital city has been long overdue for its time in the sun after years of steady, but modest, growth.”
On the ground
Brisbane Upside Realty agent Col Kelaart told The Property Tribune that typically Brisbane property prices don’t traditionally move as with much volatility compared to the Sydney and Melbourne market, and the market appears to be buoyant.
“A big drawcard for Brisbane is the 2032 Olympic Games which is seeing a huge investment in infrastructure and will put the city on the world stage,” Mr Kelaart noted.
“New transport links, arenas and green bridges will all be a drawcard for buyers. I think we’ll continue to see growth in Queensland even in regional areas as more southerners continue to move north and investors see value here – especially if we see prices go up in Melbourne and Sydney.”
Col Kelaart, Brisbane Upside Realty agent
Justin Nickerson, director of Apollo Auctions, said he expects house prices across Brisbane to remain stable following the aggressive growth over the past 19 months.
“Although buyer numbers have dropped from the previous frenzy, the lack of supply of properties to the market will ensure that the market remains stable in the coming 12 months,” he said.
In terms of outlook, he admits it is hard to forecast prices over the next five years.
“If COVID19 has taught us anything it is that long-term forecasts are fraught with danger,” he empshaisied.
“The impact of things such as interest rate rises to the market, in collision with the continued appetite to purchase with the Olympics on the horizon makes it difficult to ascertain a long-term read.”
Justin Nickerson, Apollo Auctions
He added that indications show that supply will continuie to tighten as tenants have witnessed in recent times.
“Brisbane is undergoing a push to convert short-term stays such as Airbnb’s to long-term rentals to try and mitigate this – but the outlook suggests more of what we have seen in recent history,” he said.
Ms Mercorrella said ‘crystal ball’ predictions of the Queensland property market are heated, and historically haven’t always proven come to fruition.
However, she argued the state has the fundamentals – a booming population, very low supply, strong pent-up demand and relative affordability.
“So even as we face more interest rate rises, we expect this will take time to noticeably impact buyer’s pockets and sales prices, and in the meantime, the clear supply shortage will continue to tip the scales in favour of sellers, as buyers compete to secure a property.
“We expect there will also be buyers who have been waiting in the wings, who may decide that now is the right time to swoop while they can still secure low fixed rates.
“Certainly, with how incredibly tight the rental market is, transitioning to ownership would be increasingly appealing to renters.
“We recognise that at some stage the rate of growth we see in Queensland will start to level and stabilise, simply because it would be difficult to sustain this level of accelerated growth – but for now, there’s still plenty of wind in the sails of Queensland’s property market.”
Andrew Graham, CEO of Rental Management Australia, told The Property Tribune he expects rental demand to remain low due to the chronic shortage of housing.
“With reduced stock due to the recent floods and Australia been seen as a safe haven since the onset of Covid 19 in my opinion rental prices will continue to rise over the next year and then stabilise accordingly,” he said.
To read commentary from the other cities, check out the following articles: