Buyers outnumber listings as Brisbane continues to surge

The last month of 2020 delivered a strong wrap up for the year for Brisbane - there was little slow down in the weeks leading up to Christmas and buyers were still very active throughout the city up until around mid-December.  

At a macro level, the Australian economy is performing miraculously given the context of the global pandemic.  According to ABS data, approximately 84 per cent of jobs have already been recovered.  Job ads are also up nearly 50 per cent from their lows, which points to a recovery in the right direction for us all, nationwide.

In November, consumer confidence was the strongest it has been in 7 years.  During December,  it climbed to 10 year highs according to Westpac Economics.

Brisbane property prices have continued to show positive growth, a trend that has been occurring for several months. 

Brisbane dwelling values

According to the latest Hedonic Home Value Index data by CoreLogic, dwelling values in Brisbane saw an overall median monthly price rise of 1.1 per cent in December.  The current median value for dwellings across Greater Brisbane is $521,686, which is the highest it has ever been. 

The quarterly growth in dwelling values across Greater Brisbane was 2.1 per cent, while  annual growth was 3.6 per cent.  Brisbane outperformed the national combined capital city average for annual growth in 2020, which was recorded as being a more modest 2 per cent.

In terms of which market segments within Brisbane are performing the strongest, CoreLogic said that dwelling values in the upper quartile rose 1.25 per cent in December.  This is compared with a 0.94 per cent rise seen in the lower quartile values, according to CoreLogic

Melbourne is now the only capital city location reporting negative annual price growth, and its dwelling values remain 4.1 per cent off their previous March 2020 peak.  Sydney, whilst reporting annual price growth up to the end of 2020, is also still down 3.9 per cent from its previous peak in July 2017.  

Additionally, Perth and Darwin are down 9.9 per cent and 25.7 per cent, respectively, from their 2014 peaks, despite showing positive annual price growth across the last 12 months.

The unit market in Brisbane saw some positive growth in the median value once again, with an increase of 0.4 per cent in December. The current median unit price in Brisbane is now $390,785, which is still 0.6 per cent lower than 12 months ago.

Brisbane Rental Market Movements

The vacancy rate in Brisbane fell again between October and November, and now sits at 1.8 per cent city wide, according to SQM Research.  There are many areas in Greater Brisbane where vacancy rates are even tighter, including Beenleigh, Ipswich, South East Brisbane and Northern Brisbane.  

Vacancy risk is still highest within the Brisbane CBD, although there has been a rapid recovery over the past few months when vacancy rates peaked at around 14 per cent in this location.   The CBD and inner city areas are also the locations in Brisbane where there is a large number of higher density units that have been impacted by the pandemic, compared to other areas and alternative building types.  

Rents in the unit market in Brisbane fell 1.1 per cent from January to December, whereas housing rents increased 2.7 per cent across the same period. 

What did we see on the ground across Brisbane during December? 

Typically in the lead up to Christmas, many buyers prefer to spend their time Christmas shopping rather than property shopping.  This did not seem to be the case in Brisbane throughout December.

We observed strong auction attendance right up to the last weekend before Christmas.  We also observed strong bidding from those who were in a position to buy under auction conditions.  Of particular interest, was the higher than normal interest in properties in prime locations that were ripe for renovation.  In several examples, we saw higher than normal bidder registrations for these types of properties across our City. 

Brisbane property values are definitely in an upswing phase and buyers must consider this when considering making an offer on a property.  If buyers are relying on sales that occurred three to four months ago to come to a price to pay for a property in the current market, they will in most cases simply miss out.  

The market is strong in Brisbane and buyer activity is continuing to increase.  There are definitely more active buyers entering the market than there are new listings being added so a sense of urgency is continuing to grow in Brisbane. 

The months ahead …

Looking forward into 2021, Brisbane looks to be very well placed for some strong price growth.

The risks associated with less fiscal support and the expiry of mortgage repayment deferrals have diminished as the economy has outperformed all forecasts.  

We have also seen a rapid improvement in labour markets nationwide, and especially here in Queensland.  In Brisbane, the COVID-19 outbreak has had minimal impact in terms of restrictions and lockdowns since the first wave back in March 2020. 

Of course we cannot underestimate the risk that further outbreaks of the virus in the months ahead may impact the recovery of our local economy.  We have done so well to date.  With increasing optimism around the distribution of a vaccine and the management of small clusters, it is looking more likely that the trajectory for our local housing market will remain positive in the months ahead.