The Urban Developer’s latest Brisbane housing market insights, looking at the month for July, reveals that it’s been a stellar year for the city’s residential market despite on-going snap lockdowns.
This resource, to be updated monthly, will collate and examine the economic levers pushing and pulling Brisbane’s housing market.
Combining market research, rolling indices and expert market opinion, this evolving hub will act as a pulse check for those wanting to take a closer look at the movements across the market.
Brisbane median house and unit price values
| Type | Month | Quarter | Annual | Median |
|---|---|---|---|---|
| All | 2.0%▲ | 6.0%▲ | 15.9%▲ | $598,615▲ |
| Houses | 2.2% |
6.7%▲ | 17.7%▲ | $674,738▲ |
| Units | 0.8%▲ | 2.7%▲ | 7.0%▲ | $419,143▲ |
^Source: Corelogic Hedonic Home Value Index – July
Brisbane’s typically slow-moving property market has continued to rise as part of a post-pandemic boom that experts say could fuel a further 15 per cent rise in house prices in the coming year and more than double by the time the 2032 Olympic Games commence.
The latest Corelogic home value index shows Brisbane dwelling prices have risen by 2 per cent on a rolling four-week basis.
Brisbane house prices advanced a further 2.2 per cent during July, pushing it up 6 per cent for the recent quarter and 15.9 per cent for the year to date.
The current median value for dwellings is $589,000 which is $3000 higher than just a month ago.
The median house price of $675,000 continues to attract interstate migrants from the larger markets of Sydney, where the median is now $1.25 million, and Melbourne at $945,000.
The current median unit price in Brisbane is $419,000, which is $4000 more than one month ago.
With a population of roughly 3.7 million, Queensland’s southeast is Australia’s fastest-growing zone.
Forecasts suggest it will top five million by the middle of the next decade.
Corelogic research director Tim Lawless said if the Sydney 2000 Olympics were any indication, Brisbane could be tracking a similarly strong performance.
Between when the Olympics were announced in September 1993 and when they were held in September 2000, Sydney dwelling values jumped by 60 per cent, almost twice the growth recorded across the broader combined capital cities benchmark region.
Brisbane’s housing market: policy updates
Olympics to Push Brisbane Market’s Limits
Brisbane house prices will hit the $1-million median well before the 2032 Olympics with suburbs near venues tipped to move up to $3.9 million.
Property projections from PRD Research indicate the median price would reach $1.7 million by 2033 and would be “immensely” boosted on the Gold and Sunshine coasts.
PRD chief economist Diaswati Mardiasmo said it was clear that hosting major events had served the property market well.
Federal Budget 2021: Property Hits and Misses
The federal government has rolled out its latest budget in May, a single-year plan centring on aged care, childcare, infrastructure, investment tax breaks and more help for home buyers as it tapers off the record spending from last year’s budget.
The budget will use superannuation incentives to help younger Australians enter the property market and older Australians vacate the family home.
While there have been some significant aids to the property industry and construction sector, experts have also noted some missed opportunities.
Queensland Budget Announcement
Queensland faces a “hard road” during the next four years as the state recovers from the coronavirus pandemic, Treasurer Cameron Dick says.
Property tax concessions are notably absent from the Queensland budget as the state details its plans for the year to come.
Instead 86,000 interstate migrants, health and education investments as well as infrastructure spending are expected to boost the state economy.
What the experts are saying about Brisbane’s housing market
Louis Christopher
Managing Director
SQM Research
“Regardless of the Olympics, Brisbane is likely to outperform the market as it’s due for a surge after years of sluggish growth,” he said.
“So the probability is that outperformance could go on for longer than one or two years post-Games.
“Developers are likely to position themselves early, looking to secure development sites with the intention of capitalising on increased investor demand in key areas.
“I think developers will be aiming to position themselves in key precincts early.
“We are likely to see increased competition among developers for prime development sites, especially around the inner south where so much of the infrastructure activity is taking place.”
Nicola Powell
Chief of Research
Domain
“What’s interesting around hosting the Olympics is that the impact on housing values isn’t going to be during the games; it’s going to be far more stretched than that because it’s such a significant event for Australia and Brisbane.
“It will grow the infrastructure and the associated job creation, and with that, it will bring economic prosperity and what we could see is a bit of a turnaround in unit growth as well.
“I think this is something that sets Brisbane apart from our other capital cities because, until 2032, there’s a long period of time, which means there’s lots of time for purchases on big-ticket items in terms of infrastructure.”
Matthew Hassan
Senior Economist
Westpac
“Coronavirus disruptions are likely to take some heat out of markets in coming months.
“Price growth may stall altogether, however, any slowing is very likely to be transitory, with easing restrictions and a national economic rebound driving a subsequent re-acceleration.”
Gareth Aird
Head of Economics
CBA
“Momentum remains buoyant as evidenced by elevated auction clearance rates.
“And there appears to be a clear sense amongst households that whilst the economic shock will be severe, it will be short lived and activity and employment will bounce once the lockdown is over.
“As such, there is unlikely to be any material shift in the household perception of the property market over coming months.”
Brisbane housing market forecasts
NAB is forecasting Brisbane house prices to rise by 19.5 per cent over the next 18 months with a 4.4 per cent rise across 2022.
ANZ economists predict Brisbane house prices will rise by 9.5 per cent next year, as low interest rates and government stimulus flow through the economy.
CBA now expects Brisbane house prices to increase by 16.6 per cent to December 2022 compared to 13.7 per cent in Sydney and 12.4 per cent in Melbourne.
Westpac has also updated its property forecasts, with Brisbane real estate prices tipped to surge 20 per cent between 2022 and 2023.
Brisbane auction clearance rates
| Week | Clearance rate | Total Auctions |
|---|---|---|
| Week ending 4 July 2021 | 64.4% | 133 |
| Week ending 11 July 2021 | 75.8% | 162 |
| Week ending 18 July 2021 | 66.7% | 169 |
| Week ending 25 July 2021 | 75.2% | 169 |
^Source: Corelogic Auction Clearance Rates – July
According to CoreLogic, more than 30 suburbs across the state hit double digit increases in the past quarter.
The median house price in New Farm gained 7.6 per cent during the June quarter and has grown nearly 17 per cent in the past 12 months to $2.1 million.
According to REA, Fortitude Valley is the hottest sales market in the city and recorded the third most sales in Queensland so far this year, as well as the most units.
Nundah is the sixth most popular suburb in the state and number two for units at 259 sales, followed by Bracken Ridge with 252 house sales.
Virginia, on the city’s northside, is currently the most popular suburb for rental investment properties with rental yields now at 4 per cent.
Northgate, at 3.9 per cent, was close behind, followed by Hawthorne, 3.7 per cent and Grange at 3.6 per cent.
Brisbane residential rental vacancy rate
| City | July 2021 vacancy rate | Monthly % change |
|---|---|---|
| Brisbane | 1.3% |
0.0% |
Rental stock on market
| City | July 2021 vacancies | Vacancy net loss |
|---|---|---|
| Brisbane | 4780▼ | 627▼ |
Brisbane rent prices
| Type | Rent | Monthly % change | Annual % change |
|---|---|---|---|
| Houses | $515.00▲ | 3.2%▲ | 10.4%▲ |
| Units | $393.00▲ | 0.8%▲ | 2.4%▲ |
^Source: SQM Research – July
Rent in south-east Queensland rose 15.4 per cent over the 2020-21 financial year, placing the region in the top dozen Australian markets for rent increases.
Corelogic’s quarterly rental review for June showed an increase in rent of 6.6 per cent across the country.
The growth ranged from 0.2 per cent in the North East and North West Melbourne markets to 23.7 per cent across the South East of Tasmania.
Corelogic head of research Australia Eliza Owen said annual rent increases were observed across 79 of the 88 markets analysed.
“This follows a decade of relatively subdued annual rent growth, averaging 1.8 per cent since June 2011,” Owen said.
“The annual growth rate of 6.6 per cent marked the strongest annual uplift in over a decade.”
All cities have climbed more than 7 per cent apart from Sydney, up 3.2 per cent, and Melbourne, where rents have dropped 1.4 per cent because of last year’s long lockdown.
“As with house prices, rent prices are seeing a deceleration in growth at the national level and across each of the capital cities, which may reflect affordability constraints, but there could also be higher levels of rental supply as investor activity in the market increases,” Owen said.
“Very high rental growth is unsustainable while income growth remains subdued.
“The result will likely be more subdued growth rates in the coming quarters, especially as investor participation trends higher, delivering more rental supply.”
Queensland building approvals
^Australian Bureau of Statistics, (Suspension of trend series between May 2020 and Jul 2020 due to Covid-19)
| Dwelling | Approved | Monthly % change |
|---|---|---|
| Houses | 2015▼ | -25.2▼ |
| Units | 2996▼ | -18.4▼ |
^Source: Australian Bureau of Statistics; Reference period June
A significant dip in housing approvals has added fuel to the already hot property market, despite a lockdown softening.
Australian Bureau of Statistics data shows the number of private-sector houses approved dropped 11.8 per cent in June, following the downward trajectory since the end of the Federal government’s HomeBuilder stimulus package.
Across both houses and units the number of dwellings approved fell 6.7 per cent, compared to a 7.6 per cent decrease in May.
Queensland and Western Australia experienced the biggest decline in both house and unit approvals.
In Western Australia overall dwellings approvals dropped by 30.5 per cent, followed by Queensland at 18.4 per cent and Tasmania at 14.9 per cent.
In the 2020-21 financial year total dwelling approvals nationally were 27.3 per cent higher than in 2019-20 financial year, driven by a 42.8 per cent surge in private sector house approvals.
Dwelling approvals increased more than 88 per cent in Western Australia over the financial year, while in Queensland it was up 36.7 per cent and Tasmania experienced a 33.9 per cent increase.
Queensland home loan lending indicators
| First home buyer loan commitments | First home buyer ratio – dwellings | First home buyer ratio – housing | |
|---|---|---|---|
| Queensland | 2835▼ | 35.8%▼ | 31.4%▼ |
^Source: Australian Bureau of Statistics – June
Owner-occupier home buyers propelled a surge in housing credit in June.
Housing credit lifted 0.7 per cent—the most in 11 years—to be up 5.3 per cent when compared to a year ago—the strongest annual pace in two years.
Owner-occupier housing credit jumped 0.9 per cent—the biggest gain in five years – to be up 7.2 per cent on a year ago—the strongest annual growth rate in two years.
Investor housing credit rose by 0.3 per cent to be 2.0 per cent higher on a year ago—the strongest annual rate in three years.
“Deteriorating affordability is likely to weigh on owner-occupier demand, and a tightening in macro–prudential policy settings will restrain the supply of credit,” Westpac chief economist Bill Evans said.
“We expect housing credit growth to exceed 7 per cent by the first half of 2022, triggering a likely policy intervention. The precise response will depend on the composition of lending over the next year.”
Most economists now expect the RBA to begin raising rates over 2023 and 2024 to a natural rate of about 1.25 per cent.
Queensland interstate migration
| March (quarter) 2021 arrivals | March (quarter) 2021 departures | December (quarter) 2020 net | |
|---|---|---|---|
| Queensland | 28,500▼ | 21,465▲ | 7035▼ |
^Source: Australian Bureau of Statistics – March quarter 2021
Interstate migration into Queensland, growing at its fastest rate since late 2003, has remained a tailwind for housing demand.
Brisbane’s population grew by 1.9 per cent during 2019-20, recording the highest growth rate of all capital cities, according to Australian Bureau of Statistics data.
Queensland experienced a net gain of 28,500 people from interstate in the March quarter and 21,465 departures.
Queensland’s population is expected to surge by more than a quarter of a million people in the next four years according to forecasts in the federal budget, as people flood in from other states.
Treasury boffins have predicted Queensland is set to gain around 20,000 people from interstate each year for the next four years—amounting to almost 85,000 new residents by mid-2025.
Next year alone, federal treasury estimates see Queensland gaining 23,800 new interstate residents, while Victoria is set to lose 1200 and New South Wales is tipped to shed as many as 15,500.
Queensland’s population is predicted to hit 5.44 million by mid-2025, up from 5.17 million in June 2020
Article Source: www.theurbandeveloper.com
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