Units lead the way as Brisbane clocks up 13 months of record capital growth

Property prices in Brisbane increased again in March, showing renewed growth in both houses and units. Buyer interest remained strong, intensifying competition for desirable properties including houses, units, and townhouses over recent months.

Brisbane has seen a consistent upward trend in dwelling prices for 13 consecutive months, surpassing the national average in terms of price acceleration.

While the house market in Brisbane is performing better than the national average, it’s the unit market that truly stands out, with unit values in Brisbane showing three to four times better performance compared to the national average.

The data from last month indicated that although there was still positive month-on-month growth in Brisbane property, the pace of price increase was slowing down. However, the latest data for March shows a renewed acceleration in the growth rate compared to the previous month.

Buyers have experienced some relief in the past four weeks as new listings entering the market increased by 9.5 per cent in March, as reported by SQM Research, compared to the previous month. This has offered buyers a slightly wider range of options to consider.

In March 2024 new listings in Brisbane were 12.7 per cent higher compared to March 2023, offering some respite for the pent-up demand that has been growing across various market segments in Brisbane.

When examining the total listing volumes in Brisbane, there remains a scarcity of available properties, marked by an 11.1 per cent reduction compared to the previous year.

According to CoreLogic auction data, the average auction clearance rate across Brisbane in March stood at 64.7 per cent. Apollo Auctions reported an average of 3.7 registered bidders per auction in March, down from 4 registered bidders per auction in February. Moreover, the percentage of registered bidders actively participating in each auction rose to 60.8 per cent in March, up from 56 per cent in February.

This indicates ongoing strong buyer activity in the market, characterised by a significant mismatch between supply and demand, favouring sellers. As long as these conditions persist, buyer competition will remain high, and prices will continue to rise.

Brisbane dwelling values

Dwelling values increased 1.1 per cent in Brisbane throughout March, up from 0.9 per cent in February. The quarterly change escalated slightly to 3.0 per cent, up from 2.9 per cent in the three months to February. 

The median value for a dwelling in Greater Brisbane is now $817,564, which is a new record high for Brisbane. This is also $11,971 more than last month. It is currently $805,593, which is $8,775 more than last month and $30,347 more than three months ago.

The median value of dwellings in Brisbane continues to rise above the median value in Melbourne and is now nearing Canberra’s median dwelling value.

It is important to note, however, that Brisbane’s median values for both houses and units remain lower than those in Melbourne. While Brisbane’s median house values are still considerably lower than Canberra’s, median unit values in Brisbane have now surpassed those in the nation’s capital for the first time. It’s crucial to consider the compositional bias of dwelling types within each city when interpreting the data to determine which city is genuinely more affordable.

The breakdown of dwelling value growth in Brisbane reveals that the high-end market has experienced a greater slowdown compared to the middle and lower segments in the three months leading up to the end of February 2024, as opposed to previous months.

Properties constituting the lowest 25 per cent of dwelling values have increased by 3.8 per cent over the three months ending 28 February, a decrease from 4.0 per cent over the three months ending in January.

The middle 50 per cent of property values are currently showing a quarterly change of 3.2 per cent, down from 3.4 per cent the previous month. Meanwhile, the top 25 per cent of property values have grown by 2.3 per cent over the last quarter, compared to 2.8 per cent one month earlier. This data confirms that the deceleration in prices is occurring more rapidly among the higher-priced properties in Brisbane.

Given that the unit market has been consistently surpassing the housing market in both monthly and quarterly price growth recently, it’s important not to overlook the significant contribution that units make to the growth of the lowest 25 per cent of dwelling values across the city.

House prices in Brisbane

The median house price in Brisbane increased 1.0 per cent in March, up slightly from 0.9 per cent in February.

Over the last three months house prices have grown 2.8 per cent, which is the same quarterly growth rate as last month. This indicates that the growth trajectory has been fairly consistent in Brisbane’s housing market for the last four months.

The median house price in Brisbane has, for the first time in history, surpassed the $900,000 mark with CoreLogic confirming it as $909,988 at the end of March.

This value is $10,514 more than last month and $33,997 more than three months ago. Brisbane remains the fourth most expensive capital city market based on house values behind Sydney, Canberra and Melbourne.

Unit prices in Brisbane

Median unit values in Brisbane jumped again in March, increasing 1.5 per cent throughout the month. Quarterly growth for units in Brisbane continues to accelerate with a 4.1 per cent increase over the last three months, compared to 3.6 per cent quarterly growth last month and 3.2 per cent the month prior.

The median value of a unit in Greater Brisbane is now $587,793, which is $11,434 more than last month and $26,777 more than three months ago.

The unit segment of the market in Brisbane is now outperforming the house market in Brisbane based on the CoreLogic data for the last month, quarter and 12 month period.

With Brisbane’s median unit values having moved ahead of Canberra’s this month, Brisbane is now the third most expensive capital city markets for buying a unit in Australia, ranking behind Sydney and Melbourne in median unit values.

Brisbane’s rental market

Rental market conditions in Brisbane tightened further last month with vacancy rates contracting from 1. per cent in January, to 0.9 per cent in February, according to SQM Research. 

House rents have increased 7.6 per cent in Brisbane over the last 12 months. This annual rate of growth has been slowly increasing again since January this year, indicating that tenants are continuing to experience difficultly securing a property due to supply shortage, which is continuing to cause rents to rise. 

Unit rents are up 11.2 per cent over the 12 months up until the end of March. The rate of growth in unit rents has eased slightly over the last three months, although growth in unit rents is still well ahead of growth in house rents throughout Brisbane.

Gross yields in Brisbane are currently 3.6 per cent for houses, and 5.0 per cent for units.

Despite the brisk pace at which many properties are selling, buyers still encounter a highly competitive market.

Fall in construction activity

Multiple-offer sales have become customary for high-quality properties, with agents often receiving more than 10 offers on a single property. This is particularly common for well-positioned, affordable units and townhouses but there is also evidence of this within the house market as well.

There has been a significant decrease in construction activity across the city, resulting in a higher demand for existing properties rather than newly built homes or higher-density dwellings.

This trend is expected to persist in the foreseeable future, as many developers contend with narrower profit margins due to increased site costs, rising construction expenses and higher interest rates.

The migration influx into Brisbane has placed strain on all segments of the market, as newcomers also seek housing. This surge has heightened demand in both the rental and sales markets. Looking ahead, little change is anticipated in the coming months. It is projected that supply limitations will persist, keeping demand pressure high.

Certainly, within any city, there are diverse market dynamics at play. Brisbane is no exception, as different areas within the city exhibit varying levels of desirability.

Understanding these nuances at a local level is crucial in comprehending why some properties sell swiftly while others may linger on the market.

Brisbane is anticipated to sustain positive price growth in the coming months, however, variations in performance across different regions and property types are expected to persist.