This article will highlight what has been happening in the Brisbane property market during June 2021.
Activity throughout Brisbane in June remained high in the residential property market, which is not a surprise. Brisbane is now among the top 10 most liveable cities in the world, according to the Economist Intelligence Unit (EIU), and rightly so. Our city offers an amazing sub-tropical lifestyle where, even in winter, the sun shines and our outdoor lifestyles bustle.
It is no wonder that the demand for property across the city is still strong. At a national level, the headlines suggest that the momentum for property price growth is starting to slow, but in the Brisbane housing sector, this is not the case.
With net interstate migration into Queensland exceeding 30,000 in 2020 (the first time since 2005), this was by far the fastest population growth rate of all capital cities around Australia. Employment also surged to a record high in Queensland with the unemployment rate for the state now sitting at 5.4 per cent. There are still some further improvements that we hope to see here in the coming months. With an increase in total job advertisements in Queensland of +154 per cent over the year, there may be further uptake in the months ahead.
After seeing a spike in demand throughout February and March, the REA Insights Weekly Demand Index has been fairly steady since April 2021 across Queensland. This index measures the number of people who are highly engaged with buy listings on realestate.com.au compared with a baseline which is calculated as being the 52-week static average for the 2019 year.
Interestingly, the number of people who are highly engaged with unit listings has been higher across Queensland compared with house listings. This is in contrast to what we have observed by being on the ground at inspections where anecdotally we are seeing more buyers attending open homes for houses than units – especially in Brisbane.
In terms of apartment supply forecasts for Brisbane, the table below shows where we are in the pipeline of new developments.
With long time frames for planning, marketing and construction for large apartment projects, the next wave of supply is still some time away for Brisbane. In the meantime, the market will tighten further, particularly after borders reopen and international migration resumes.
For property investors, the latest Tax Office figures have confirmed that there are fewer landlords who are negatively gearing their properties. This is because with interest rates so low, in many cases the rental income from the investment is sufficient to pay down the investment debt. This builds up the equity position in a property and provides a good buffer for any future potential increase in interest rates.
And with the Australian economy rebounding so quickly, there are now some economists who believe that interest rates could rise before 2024. While there is no suggestion this is likely from the RBA, it is always a possibility. It does look like interest rates might have reached their lowest point.
So, the outlook is definitely still bright for Brisbane. Let’s see how our local market performed over the last month.
Brisbane property market prices
The latest Hedonic Home Value Index data by Corelogic released on 30 June 2021 has confirmed that the median dwelling value in Brisbane increased 1.9 per cent over the month of June. This is just slightly lower than the dwelling growth in Brisbane throughout May (+2.0 per cent) which some might assume means that the price growth is losing some momentum throughout Greater Brisbane. The current median value for dwellings across Greater Brisbane is $586,142, which is $11,570 higher than just one month ago, and $64,456 higher since the Corelogic results were published at the beginning of the year on 4 January 2021.
The quarterly growth in dwelling values across Greater Brisbane is now 5.7 per cent, suggesting a slight slow down since last month, and annual growth for the last 12 months is now 13.2 per cent.
However, it is important to always break down the dwelling data into the housing and unit sectors as each of these types of dwellings has performed differently over recent months.
Brisbane house prices
In the Brisbane housing market, we saw median values for the greater Brisbane region increase 2.2 per cent across the month of June 2021, which is consistent with the growth that we experienced in the housing sector throughout Greater Brisbane last month. The 12-month change in Brisbane house prices has been 14.8 per cent. The current median value for a house in Greater Brisbane is $657,551, the highest it has ever been. This is $15,824 more than one month ago and $154,403 more than 12 months ago.
The breakdown of the median data into the price segments of the market in Brisbane provides further insights into the price spread of houses around our city. The graph below shows house values for the 25th and 75th percentile prices in Brisbane, compared to other locations around Australia. This shows a graphic representation of how affordable the Brisbane market still is compared to Sydney, Melbourne and ACT, with our 75th percentile value (i.e. the top 25 per cent of house prices) sitting below the 50th percentile value (i.e. overall median value) of Melbourne and ACT and below the 25th percentile value of Sydney.
Brisbane unit prices
The unit market in Brisbane saw further positive growth in the median value this month, although a slow down in the momentum of that growth is evident within this sector. June saw an increase of 0.7 per cent growth for units in Greater Brisbane. The 12-month growth for units across Brisbane is now 5.7 per cent. The current median unit price in Brisbane is $415,536, which is $3,782 more than one month ago and $28,116 more than 12 months ago.
When we compare the unit prices in Brisbane with other capital cities, we find that our median unit price is equivalent to the lowest 25th percentile of unit values in ACT and Hobart, and much lower than the 25th percentile for Melbourne and Sydney. Again, this demonstrates how affordable Brisbane units are compared to units throughout other capital cities around Australia.