Investors still backing Brisbane's most affordable market segments

Affordable suburbs and units are driving Brisbane's continued but slowing property price growth, as investors seek higher rental yields and potential bargains.

Brisbane viewed from grassy hillside
Brisbane's most affordable quartile is comfortably outpacing the top end of the real estate market in Brisbane. (Image source: Shutterstock.com)

Investors targeting units are driving much of the remaining capital growth in the Brisbane real estate market.

While the high growth of most of 2024 is now coming off the boil, Brisbane’s overall price growth continued in January by virtue of units doubling the pace of growth of houses.

With vacancy rates still at critically low levels, investors chasing rental yields on relatively affordable properties have ensured Brisbane sits just below Adelaide and Perth for capital growth in the first month of the year.

Brisbane’s easing rate of growth is in line with a broader market slowdown in other capital cities.

According to the latest CoreLogic data, Brisbane dwelling values rose by 0.3 per cent for the month, contributing to a 1.2 per cent increase over the last quarter and a 10.4 per cent annual gain.

When comparing Brisbane’s performance with other major cities, Sydney (-0.4 per cent) and Melbourne (-0.6 per cent) recorded monthly declines in January, whereas Adelaide (0.7 per cent) and Perth (0.4 per cent) experienced more substantial gains.

Over the past 12 months, Perth has led capital city markets with a 17.1 per cent growth rate, followed by Adelaide at 12.7 per cent, and Brisbane at 10.4 per cent.

Despite a seasonal dip in new and total property listings over December and January, buyer activity remains strong, with many eagerly awaiting fresh stock to enter the market.

Listing volumes in Brisbane remain well below long-term averages, in contrast to Sydney and Melbourne, where inventory levels have increased.

Anticipation of potential interest rate cuts as early as February could further strengthen buyer sentiment, potentially increasing demand for Brisbane properties from owner-occupiers and investors alike, as borrowing capacity improves.

Brisbane dwelling value rises cooling

The latest CoreLogic data reports that Brisbane’s median dwelling value in January 2025 reached $893,592, reflecting a 0.3 per cent monthly increase, 1.2 per cent growth over the last quarter, and a 10.4 per cent increase year-on-year. The city’s dwelling value growth continues to exceed the combined capitals’ annual average of 3.8 per cent.

Breaking down the market segments, the lower quartile has experienced the strongest growth, driven by first-home buyers and investors seeking affordability. Mid-tier properties have demonstrated moderate gains, while the upper quartile has shown slower appreciation, largely due to affordability constraints at higher price points.

Brisbane’s unit market again  outperformed houses in January, with median unit values increasing by 0.6 per cent for the month, 2.1 per cent over the quarter, and 15.8 per cent year-on-year.

House prices rose 0.3 per cent for the month.

This growth for units highlights the increasing demand for more affordable housing options compared to detached houses. The median unit value in Greater Brisbane is now $685,291.

CoreLogic’s analysis indicates that Brisbane’s unit market has reaccelerated, in contrast to the slowing pace of house price growth. Investors are particularly drawn to units due to their higher gross rental yield advantage of 4.5 per cent, compared to 3.5 per cent for houses.

The median house price in Brisbane rose to $977,343 in January 2025, with 1 per cent growth over the quarter, and a 9.4 per cent annual increase.

While house price growth has moderated compared to previous months, Brisbane remains ahead of Perth, where quarterly growth rates have now slowed below Brisbane’s. Additionally, Brisbane’s house market continues to outperform Sydney and Melbourne, both of which recorded declines over the last quarter.

Brisbane’s tight rental market

Brisbane’s rental market remains exceptionally tight, with vacancy rates edging up slightly to 1.2 per cent in December, up from 1.0 per cent in November. Despite this minor seasonal increase, demand for rental properties continues to outstrip supply.

Annual rental price trends indicate that house rents increased by 2.9 per cent year-on-year, a slight decline from the 3.2 per cent growth recorded in December, while unit rents maintained steady annual growth of 3.5 per cent.

The data suggests that while house rents have shown a slight moderation in growth, unit rents have remained stable, indicating sustained demand for apartments as an affordable alternative to detached housing.

Modest growth outlook for Brisbane

The increased likelihood of interest rate cuts in early 2025 is expected to provide a boost to buyer confidence and borrowing power, potentially stimulating renewed demand in the coming months.

Additionally, buyer activity in January was uncharacteristically strong, with heightened attendance at open homes and increasing demand for professional buyer’s agents, suggesting that many are seeking expert guidance to navigate current market conditions.

As the year progresses, attention will turn to the federal election, which may introduce some uncertainty in the market, particularly if housing policies become a focal point of political debate.

High construction costs and ongoing supply constraints remain significant factors limiting new housing development, reinforcing continued competition for available properties.

While price growth is expected to persist throughout 2025, it is likely to occur at a more moderate pace. Nonetheless, with solid market fundamentals, a resilient economy, and continued migration into Brisbane, the city remains well-positioned for long-term property market strength.

Article Q&A

Are property prices still rising in Brisbane?

According to the latest CoreLogic data, Brisbane dwelling values rose by 0.3 per cent for the month, contributing to a 1.2 per cent increase over the last quarter and a 10.4 per cent annual gain.

What is the average cost of a home in Brisbane?

The median house price in Brisbane rose to $977,343 in January 2025, with 1 per cent growth over the quarter, and a 9.4 per cent annual increase. The median unit value in Greater Brisbane is now $685,291.

What is the rental vacancy rate in Brisbane?

Brisbane’s rental market remains exceptionally tight, with vacancy rates edging up slightly to 1.2 per cent in December 2024, up from 1.0 per cent in November. Despite this minor seasonal increase, demand for rental properties continues to outstrip supply.

What is the outlook for Brisbane property prices in 2025?

While price growth is expected to persist throughout 2025, it is likely to occur at a more moderate pace. Nonetheless, with solid market fundamentals, a resilient economy, and continued migration into Brisbane, the city remains well-positioned for long-term property market strength.

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