Record Brisbane prices still rising as offers continue to flow
Record Brisbane prices still rising as offers continue to flow
Crowds at Brisbane home opens and auctions are starting to get smaller, but lower attendance is not yet translating into fewer offers as buyer activity remains historically high, particularly in the inner and middle ring suburbs.
That buyer demand is resulting in further increases in median prices, for both houses and units, however, a divergence is emerging between the rapid rate of price growth at the upper end of the market and slower growing lower valued properties.
Contributing factors include the improvement in the national economy, with Queensland having very robust job opportunities for those seeking employment.
There has been a 15.6 per increase in the total number of job advertisements throughout Queensland in the last month.
For those concerned about the winding back of JobKeeper, there certainly seem to be other job opportunities emerging.
The V-shaped recovery in labour markets around Australia is also helping to keep consumer sentiment high.
In April, the ANZ-Roy Morgan Consumer Confidence Rating jumped and remained strong.
Business confidence also jumped in March to levels we have not seen since 2013-2014.
With an economy expanding at a faster than average pace, this is all great news for continued housing demand.
Demand will also be supported by the expectation that interest rates will remain at their record lows for an extended period of time.
The RBA is still not expecting to see any change in interest rates until 2024 at the earliest.
Brisbane has seen strong internal migration throughout the 2020 financial year, with an additional 13,779 people moving to our great city.
With the exception of Perth, who also saw a much smaller 735 new residents in the same period, every other capital city experienced a loss of interstate migrants.
These population movements are contributing to what makes the Brisbane property market quite different, with the extra demand from a growing population not typical of all areas around the country.
Also the proportion of home loans that remained on deferral at the end of March was just 0.7 per cent.
This is now so low that we are not expecting any sign of distressed selling.
With the nationwide lift in dwelling values over the last few months, it is less likely that anyone who may still have to sell, will have to sell for a loss, so this also provides a level of reassurance.
With so much positive sentiment, good economic news and the nationwide property recovery, let’s now explore what is happening in Brisbane at a local level.
Brisbane median dwelling prices
According to the latest Hedonic Home Value Index data by Corelogic, dwelling values in Brisbane saw an overall median monthly price rise of 1.7 per cent in April.
This is slightly less price growth than we saw in March, which might suggest a deceleration in the rate of gains, but it also might reflect a greater volume of sales at a lower price point throughout Greater Brisbane across the month (due to the way a median is calculated).
The current median value for dwellings across Greater Brisbane is $558,295 which is $10,035 higher than just one month ago and up $36,609 since the start of 2021.
The quarterly growth in dwelling values across Greater Brisbane is now 5.6 per cent and annual growth for the last 12 months is now 8.3 per cent.
Brisbane median house prices
Median values for detached houses in the greater Brisbane region increased by 1.8 per cent in April, contributing to a 12-month rise of 9.6 per cent. The current median value for a house in Greater Brisbane is $621,806, the highest it has ever been and $13,837 more than one month ago.
Brisbane unit prices
The Unit Market in Brisbane saw further positive growth in the median value this month with another increase of 1 per cent in April 2021. The 12 month growth for units across Brisbane is now 3 per cent, which supports what we said last month that this market is now in the recovery stage. The current median unit price in Brisbane is $405,902, which is $5,036 more than one month ago.
Brisbane rental market movements
Vacancies in Brisbane are still very tight, with many areas still trending lower at a suburb level. Between February and March 2021, the city-wide vacancy rate remained unchanged at 1.5 per cent.
We are seeing many tenants struggle to secure a property with multiple applications being received for most properties that become available for rent.
Prospective tenants are offering landlords over the asking price, or offering to pay six months’ rent in advance, just to secure a property. It really is getting desperate in some areas.
Rents in the unit market in Brisbane are continuing to creep up. The annual change in unit rents now is a 2.1 per cent across the city, up a further 1 per cent from last month.
Housing rents continue to see strong growth, with the annual increase in rents for Brisbane Houses now at 6.4 per cent according to Corelogic, 1.2 per cent higher than a month ago.
With property price growth in Brisbane now outpacing rental price growth, we are starting to see some yields fall.
Gross rental yields for dwellings across all of Greater Brisbane are now at 4.2 per cent, which is still well above Sydney at 2.7 per cent and Melbourne at 2.9 per cent.
What did we see on the ground across Brisbane in April?
At the start of April, Brisbane was coming out of a short sharp lockdown, and also heading into Easter. Despite this, on Easter Saturday we were still lining up to get through properties for our clients.
Since then, we have started to observe a small decline in the number of buyers who have been turning up at open homes, but this does not seem to be translating to fewer offers.
We are seeing a higher ratio of offers being made for the number of buyers who are attending the open homes, indicating that qualified buyers are still active in the market, but perhaps those who were not ready to buy immediately have fallen away.
We are also seeing a lot of people register at auctions, although many who register do not get a chance to get a bid in.
Perhaps this is because those who don’t understand the current market do not realise the value of a property, so the price escalates beyond their budget very quickly.
But overall, buyer activity in the inner and middle ring suburbs of Brisbane remains very strong and as a result prices continue to rise – every week.
The months ahead…
We consistently say that all housing markets are not uniform because individuals have strong preferences for where and how they want to live.
Changes caused by COVID-19 have brought about a change in perspective for a lot of individuals and the influx of new residents to Brisbane has been evident.
Whilst we can continue to build new homes in areas at the outer fringes of Greater Brisbane where there continues to be a reasonable supply of new land subdivisions, there appears to be a very real trend for families and individuals to live in some highly desirable areas in Brisbane that are effectively built out. These areas are much closer to the CBD.
There is also a very real trend whereby people are choosing detached houses over units in Brisbane.
The release of more land on the outskirts of Brisbane does very little to dampen the demand for the inner and middle ring suburbs.
This is one reason why we are seeing the higher priced locations grow at a faster rate than the lower priced locations throughout Greater Brisbane. It is a trend we expect will continue for some time yet.
Brisbane is starting to shine and those who have been waiting for this boom are finally starting to celebrate.