Brisbane house, unit prices surge as listings plunge

Brisbane continues to outperform the national real estate market, as property prices in house and unit markets surged in July.

Low housing stock and increased buyer activity are driving the upward pressure on prices across many parts of the city.

Interest rates remained steady in June and July, and inflation was lower than expected for the June quarter, suggesting the interest rate cycle may be peaking. This could boost consumer confidence in the future.

Despite consumer sentiment levels resembling those during the Global Financial Crisis, buyer demand in Brisbane has been unexpectedly rising in recent months.

While other capital cities have seen the pace of growth slow, in particular Sydney, Brisbane’s price growth is accelerating as total listings become scarcer.

SQM Research reveals that while new listings in Brisbane rose by 2.6 per cent between June and July, total listings declined by 6.15 per cent. This indicates that buyers are also considering properties that have been on the market for more than 30 days, possibly due to sellers’ unrealistic price expectations rather than a lack of buyer interest.

Compared to the previous year, Brisbane’s housing stock remains very low, with 25 per cent fewer new listings and 21.3 per cent fewer total listings, as reported by CoreLogic. This contrast with Sydney highlights the importance of evaluating each market’s supply and demand metrics independently.

Demand is higher in suburbs closer to the CBD compared to those further out. Inner city locations like West End, East Brisbane, and Grange show the highest demand for three- and four-bedroom houses based on views per listing on realestate.com.au, while suburbs like Shorncliffe, Inala, Sunnybank, and Logan Reserve, which are further out, have lower demand.

For two- and three-bedroom units, lower density inner-city areas like Graceville, Petrie Terrace, and Gordon Park exhibit the highest demand, while areas further out like Darra, Wynnum West, and Moggill have lower demand.

This demand disparity leads to price pressure, and data from CoreLogic indicates that the highest 25 per cent of property values in Brisbane are growing faster than the lowest 25 per cent in recent months.

It is a trend being observed on the ground also, with more buyers competing for quality inner and middle ring homes, compared to properties located within the outer ring.

Auction clearance rates in Brisbane remained consistent at 66.6 per cent in July, with a gradual decline in the average number of registered bidders per auction over the last three months. The number of registered bidders actively participating in auctions has remained steady.

Brisbane’s dwelling growth accelerated in July, increasing by 1.4 per cent according to CoreLogic data, bringing the current median to $735,394, which is $9,997 higher than the previous month.

Other data showed that dwelling prices in Brisbane rose by 0.37 per cent in July, reaching a new peak, and regaining all of 2022's price falls. This was reported by PropTrack and showed that Brisbane’s dwelling prices are now 1.98 per cent higher than a year ago.

Source: PropTrack

The housing market gained momentum in July, with a 1.4 per cent increase in the median value, reaching $819,832, as per CoreLogic data. Quarterly growth in the housing market ranks second behind Sydney among all capital cities in Australia.

Unit values hit record high

Unit values in Brisbane reached a new record high in July, surging by 1.7 per cent and bringing the current median value to $520,346, which is $8,084 more than the previous month, as per CoreLogic data.

PropTrack data also confirms positive price growth in the unit market, with a 0.46 per cent increase in median values recorded in July.

Over the last 12 months, Brisbane’s unit market has outperformed its housing market in terms of price growth.

Over the last three months, however, the latest CoreLogic data reveals the housing market displaying indications of accelerated growth, with houses rising by 4.2 per cent and units by 3.8 per cent. Nevertheless, both segments have consistently been in positive growth territory for the past five months, showcasing the robustness of the Brisbane property market in recent times.

Units in Brisbane, along with Perth and Melbourne, experienced the fastest rate of rental price growth over the last three months, with unit rent prices rising by 3.8 per cent.

The annual increase in Brisbane’s unit rents is 15.8 per cent, while for houses it is 7.7 per cent, indicating higher demand for units in the rental market.

With vacancy rates holding firm at 1 per cent from May to June, the rental crisis is not expected to ease in the near future.

Brisbane’s real estate market remains resilient, with strong buyer demand and limited supply putting upward pressure on prices, especially in inner and middle ring locations.

Despite the broader Australian property market showing signs of easing growth with rising new listings, Brisbane continues to defy this trend.

Buyers seem confident that the interest rate cycle is nearing its peak and forced selling remains unlikely at this time.

Brisbane’s popularity is also pushing house prices higher. As with Perth, the Queensland capital has continued to attract strong net migration inflows from other Australian capital cities and regions, in the vicinity of 15 and 13 per cent, up from the 10 per cent share they both held in the 12 months to June 2022.

Based on the fundamentals, Brisbane’s property prices are not expected to slide any time soon.