May’s astonishing property price surge shakes up Brisbane

After two months of very modest dwelling price growth in Brisbane, the May data shows a huge spike in property values over a short period of time.

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While it might be a surprise to some, the price surge in Brisbane property values last month has been on the radar for some time. With very low inventory levels, combined with increasing demand, buyers who may have been looking for a while are starting to stretch. Competition has been building for several months, and suddenly, the market conditions have turned once again.

The availability of stock is the biggest concern for buyers in the Brisbane market. City-wide, the flow of listings in Brisbane is tracking 26 per cent below the previous five-year average, according to CoreLogic. Additionally, for-sale stock levels in Brisbane are 39 per cent below average. At the same time, housing demand is slightly above the previous five-year trend. This mismatch between the number of properties available for sale and the number of buyers in the market is causing an element of fear of missing out (FOMO) to creep back in for some buyers.

Some suburbs are demonstrating tighter supply than others, with some of the biggest decreases in new listings on realestate.com.au occurring in Clayfield (-66 per cent YoY per cent), Petrie (-63 per cent YoY per cent) and Kangaroo Point (-60 per cent YoY per cent). At the same time, other suburbs have seen listing volumes increase over the last 12 months. These locations include Aspley (+150 per cent YoY per cent), Greenbank (+50 per cent YoY per cent) and Jimboomba (+47 per cent YoY per cent). Local dynamics like this can have an impact on the performance of different segments of the Brisbane property market, so it is always useful to understand that not all Brisbane locations will follow the broader trend.

The competition is also causing days on market to trend lower, meaning properties are starting to sell quickly once again. It is very common for properties listed by private treaty sale to have multiple offers after the first Saturday open home. Brisbane buyers are once again compelled to be fully prepared for a purchase, often before inspecting. This means completing thorough property due diligence, pricing analysis and having advanced financing arrangements already in place.

The demand for Brisbane properties is coming from local, interstate and overseas buyers. Interstate migration is still very strong off the back of the post-COVID-19 boom, with southerners looking for a more affordable, warm and laid-back lifestyle. Also, according to PropTrack, Brisbane is one of the top five regions within Australia searched by international buyers from the United Kingdom, the United States, China, Hong Kong, New Zealand and Singapore. With the push for skilled migration, based on real estate search behaviours, it seems Brisbane is a destination of choice for many international migrants.

Apollo Auctions reported auction activity in Brisbane during May increased, with an average of 3.9 registered bidders per auction, which was up from 3.5 during April. On average, 60.3 per cent of registered bidders were actively bidding during auctions in May, compared to 53.5 per cent in April. Domain auction clearance rates came back slightly during May to 57 per cent, compared to 62 per cent in April. This is not due to the depth of buyers based on the volume of registered bidders, but perhaps due to seller’s expectations being ahead of the market.

It is not a surprise that property prices have surged during May as the mismatch between supply and demand in Brisbane continues to escalate.

Brisbane dwelling values

CoreLogic data showed a jump in dwelling values in Brisbane of 1.4 per cent in May, with quarterly growth now up 1.8 per cent. All segments of the market grew strongly, with a more rapid recovery in property prices being seen in the most expensive quarter of the market.

Source: CoreLogic

PropTrack also confirms positive price growth in Brisbane dwelling values in May, with prices 0.33 per cent higher across the month.

Source: PropTrack

House prices in Brisbane

House values grew 1.5 per cent in Brisbane in May, which was a large jump off the back of 0.2 per cent growth in April. The difference between last month’s median value and the median value this month is $10,244, which represents four weeks of market movement.

Source: CoreLogic

PropTrack data also confirms price growth in Brisbane houses for the month, with a 0.22 per cent increase reported over the month.

Source: PropTrack

Brisbane unit values

Units across Greater Brisbane grew 1.1 per cent in May. It is the first month since April 2022 when the housing market has outperformed the unit market in Brisbane, according to CoreLogic data. Units continue to outperform houses when looking at both quarterly and annual growth indicators.