Brisbane property market update – October 2023

When assessing price movements on a quarterly basis, there is a noticeable deceleration in the growth rate. Over the three months leading up to July 2023, dwelling values in Brisbane recorded a 4.2 per cent increase. However, in the subsequent period, spanning from July to October 2023, the growth trend moderated to a 3.8 per cent rise in dwelling values. While still substantial, this shift indicates a slowdown in the pace of growth.

Brisbane consistently stands out among the capital city markets, ranking second only to Perth in monthly dwelling value increases on a national scale. This strong performance may be partly attributed to the relatively stable supply levels in Brisbane throughout spring, with a mere 0.5 per cent increase in advertised properties, as reported by CoreLogic. Conversely, Perth witnessed a slight decrease of 2.1 per cent in the same period. Additional data from PropTrack confirms a 7.3 per cent drop in newly listed homes for sale in Brisbane in September compared to August, with year-on-year listings in Brisbane also declining.

Over the past year, the total number of listings in Brisbane decreased by 23.6 per cent, according to CoreLogic. In contrast, other capital cities experienced a noticeable increase in listing numbers, potentially correlated with a less robust growth performance in recent months. A larger inventory provides buyers with more choices, reduces the sense of urgency and enhances their negotiation leverage.

However, the situation in Brisbane paints a different picture. The “days on market” statistic has consistently decreased month-on-month throughout most of 2023, indicating an increasing sense of urgency among buyers. With a limited supply, buyers often face more competition, creating highly competitive buying conditions. Sellers have the upper hand in these scenarios.

Nevertheless, some suburbs in Brisbane have witnessed a significant surge in new property listings, as indicated in the latest PropTrack listings report. For instance, Warner experienced a remarkable 92.3 per cent increase in new listings over the past 12 months while Redcliffe saw a 62.5 per cent increase, and Newstead recorded a 50 per cent rise in new listings.

Conversely, the most substantial decrease in new listings over the past year occurred in suburbs like Calamvale (-33.3 per cent), Hamilton (-32.4 per cent) and Indooroopilly (-30 per cent). These localised dynamics can often influence price movements in various locations within Greater Brisbane, an aspect frequently observed in the real estate market.

In October, subtle shifts in auction clearance rates, as reported by Apollo Auctions, were noticeable. The average auction clearance rate for Brisbane decreased from 68 per cent in September to 63.3 per cent in October. Additionally, there was a slight dip in the average number of registered bidders per auction, declining from 3.8 to 3.4 over these two months. The number of active bidders also saw a decrease, dropping from 65.35 per cent in September to 62.53 per cent in October.

While auction activity exhibited a softer trend, there has been a rise in the number of properties being sold before reaching the auction stage in Brisbane. This could be a signal that some buyers are opting to avoid competing with others on auction day. It also suggests that sellers might have some reservations about achieving the desired price during the auction when early offers are made throughout the sales campaign.

Brisbane dwelling values

According to recent data from CoreLogic, Brisbane’s dwelling values continued to show positive growth in October, with a notable 1.4 per cent increase, following a 1.3 per cent rise in September. While this represents a consistent upward trajectory, it’s interesting to note a slight moderation in the quarterly growth rate, which shifted from 3.9 per cent last month to 3.8 per cent this month. Notably, the current median value for properties in Brisbane now stands at $770,575, marking an $8,836 increase from the previous month.

Source: CoreLogic

In line with the positive growth trend, PropTrack’s data reveals that Brisbane’s dwelling values experienced a 0.52 per cent increase throughout October, following a 0.39 per cent rise in September. While both CoreLogic and PropTrack data indicate a growth in values, the percentage change slightly differs, emphasising the fact that both data sets use different hedonic regression equations to calculate property price movements.

Source: PropTrack

Brisbane house prices

Brisbane’s median house values continued to display consistent growth, according to CoreLogic, with a solid 1.4 per cent increase throughout October, matching the rate of growth experienced in September. While the monthly growth remained steady, there was a slight moderation in the quarterly growth rate, which shifted from 4 per cent in the previous month to 3.8 per cent this month. The current median house value in Brisbane now stands at $860,465, marking a notable $11,785 increase from the previous month.

Source: CoreLogic

Based on the latest PropTrack data, Brisbane’s house values continued their upward trajectory, posting a 0.53 per cent increase throughout October, following a 0.33 per cent rise in September.

Source: PropTrack

Brisbane unit values

The latest data from CoreLogic shows that Brisbane’s median unit values increased 1.3 per cent throughout October, up from the 1.1 per cent growth observed in September. While the monthly growth rate showed an upward trend, there was a slight moderation in the quarterly growth, which shifted from 3.7 per cent at the end of the September to 3.5 per cent at the end of October. The current median value for a unit in Greater Brisbane now stands at $545,355, marking a jump of $6,168 from the previous month.

Source: CoreLogic

PropTrack’s data reveals that Brisbane’s median unit values exhibited a 0.48 per cent increase throughout October, following a 0.76 per cent rise in September. While this data indicates a somewhat slower growth rate compared to CoreLogic’s findings, it underscores the city’s overall positive trend in unit value appreciation, as CoreLogic also reported a monthly increase in values rather than a decline.

Source: PropTrack

Brisbane rental market

Brisbane’s rental market, according to SMQ Research, is still experiencing exceptionally tight vacancy rates, hovering at just 1 per cent. While this figure represents a marginal uptick from the previous month when vacancy rates were at 0.9 per cent, it is crucial to note that this level is significantly below the long-term average. The persistent shortage of available rental accommodation has exerted upward pressure on rents in the city, a trend that has become increasingly evident since late 2021 and early 2022.

Source: SQM Research

With a high demand for rental properties and a limited supply, Brisbane’s renters have faced the challenge of rising rents for some time now, reflecting the competitive nature of the local rental market. Over the last 12 months, house rents have increased 6.1 per cent whereas unit rents have increased 13.9 per cent. The rate of annual rent growth in Brisbane has eased over recent months, even though rents are still increasing.

Source: CoreLogic

Summary

Throughout the majority of 2023, Brisbane’s property market has displayed robust growth. However, certain factors are influencing the market’s future direction. Consumer sentiment remains at historically low levels, akin to the early stages of the pandemic and the worst point during the global financial crisis. Further increases in interest rates are likely to have a dampening effect on confidence, and escalating global tensions may exacerbate this trend.

Should access to credit become more challenging for property buyers, albeit affecting some more than others, we could witness a softening in demand. Nevertheless, Brisbane’s relative affordability, compounded by persistent supply shortages, acts as a safeguard against significant declines in the demand’s impact. Benefiting from positive factors such as interstate migration and a robust local economy, we hold a favourable outlook for Brisbane’s property values, without immediate concerns of a reversal in the foreseeable future.