Brisbane property market update September 22: Is the worst behind us, or is there more pain to come?
Brisbane has seen another month of price falls based on median settled sales data. Is the worst now behind us, or is there more pain to come? The answer depends on a few things. It depends if you are a buyer, a seller, a landlord or a tenant!
Interest rates have risen 250 basis points across the last six months, which is the fastest tightening cycle since 1994. This has definitely had an impact on buyer demand. According to PropTrack, there are now 29.4 per cent FEWER potential buyers per realestate.com.au listing for houses in Brisbane. This is compared to the recent peak. For Brisbane units, there are now 12.6 per cent fewer potential buyers per listing, compared to the peak. This confirms that the drop in demand has been more severe for houses compared to units across Brisbane.
The change in the number of potential buyers per listing for houses now, compared to the pre-pandemic period, is +79.8 per cent. For units, the buyer activity in Brisbane for the same period has increased 126 per cent. This is according to PropTrack data.
This confirms that buyer demand has slipped over recent months. But it remains strong looking historically to the period prior to the COVID-19 pandemic.
Whilst demand is lower according to these indicators, we started to see more people turn up to property inspections again throughout September, compared to July and August. Perhaps this is due to buyers having fewer choices in the market.
New listings have been reducing in Brisbane for the last three months (see below). At the same time, total listings have been increasing.
What does this mean?
- Sellers are less motivated to list their properties for sale (especially in the last two to three months) — probably because they are uncertain about the price that they might achieve.
- There is NOT a trend of high levels of forced selling!
- Some sellers are less willing to meet the market, OR buyers are becoming more selective about what they will buy, which is why days on market are trending higher, as evidenced by increasing levels of older stock.
Domain auction clearance rates have been improving across Brisbane since July. The monthly average clearance rates in July were 39.8 per cent. By August, this increased slightly to 40.25 per cent, and for the four weeks in September, the average auction clearance rate in Brisbane increased to 53 per cent. The graph below also shows that the clearance rates in Brisbane have bottomed out.