<p><span style="font-weight: 400;">Brisbane’s property market went against the trend of slowing price growth seen in other capital cities, posting solid gains in August.</span></p>
<p><span style="font-weight: 400;">Unlike its bigger capital city peers, which have shown signs of slowing price appreciation in the recent months, Brisbane’s </span><a href="https://www.smartpropertyinvestment.com.au/research/22824-property-market-update-brisbane-may-2021" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">monthly rate of growth has been consistently high since May</span></a><span style="font-weight: 400;">. </span></p>
<p><span style="font-weight: 400;">Nationwide headlines are indicating that </span><a href="https://www.smartpropertyinvestment.com.au/research/23083-august-data-proves-property-value-gains-are-slowing-down" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">property markets are losing steam</span></a><span style="font-weight: 400;">. CoreLogic<span>’</span>s research director, Tim Lawless, said that the slowing rate of growth probably has more to do with worsening affordability constraints than ongoing lockdowns. </span></p>
<p><span style="font-weight: 400;">“Housing prices have risen almost 11 times faster than wages growth over the past year, creating a more significant barrier to entry for those who don’t yet own a home,” he said. </span></p><div class="dfp-ticker interscroller f" data-catid="85" data-pcount1="45">
<div class="kevel" >
</div>
</div>
<p><span style="font-weight: 400;">He added that while lockdowns are also having a clear effect on consumer sentiment, they had a “ less impact on [the] price growth momentum”. </span></p>
<p><span style="font-weight: 400;">So why is the Brisbane property market bucking the national trend in terms of house price growth? </span></p><div class="b_gxh"> <div class="moduletable">
<script type="text/javascript">
var typesArray = {
desktop: [882],
tablet: [4223],
mobile: [1578],
};
var zoneArray = [253991];
var zoneDivId = '#mm-azk257428-zone';
changePlacements(true, zoneDivId, typesArray, zoneArray, '');
</script>
<div id="mm-azk257428-zone"></div>
<style>
#mm-azk257428-zone {
width: fit-content;
margin: auto;
}
#mm-azk257428-zone img {
max-width: 100%;
height: auto;
}
</style> </div>
</div>
<p><span style="font-weight: 400;">It’s important to note that the city also saw its share of lockdowns. At the start of August, the city faced a short lockdown to control the spread of the Delta COVID variant with buyer and seller activity almost at standstill until the second week of the month. </span></p>
<p><span style="font-weight: 400;">According to experts, what makes Brisbane different from other capital city markets is that it doesn’t show the same affordability challenges as the larger cities, which may help to explain the persistently high rate of growth. </span></p>
<p><span style="font-weight: 400;">Additionally, the city also had fewer outbreaks of COVID and a strong interstate migration tailwind propping up housing demand in the absence of overseas migration.</span></p>
<p><span style="font-weight: 400;">So, what were the highlights across Brisbane’s property market throughout August 2021?</span></p>
<p><b>Property values </b></p>
<p><span style="font-weight: 400;">The latest data from CoreLogic showed that the </span><a href="https://www.smartpropertyinvestment.com.au/research/23084-brisbane-property-market-update-august-2021" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">average dwelling value in Brisbane</span></a><span style="font-weight: 400;"> increased by a further 2 per cent during August, the same rate of dwelling growth seen in July. This brings the current median property values in the city to $612,377, which is $13,672 higher than one month ago.</span></p>
<p><span style="font-weight: 400;">Meanwhile, Brisbane’s quarterly growth in dwelling values is now 6.1 per cent, indicating a slight pick up again since the previous month. Housing values in the city are now 18.3 per cent higher over the year. </span></p>
<p><span style="font-weight: 400;">The trend of the housing sector outperforming the unit sector – which has been the case every month since October 2020 – continued through August. But the unit sector has marginally closed the performance gap, rebounding in July and August from the price growth momentum between May and June. </span></p>
<p><span style="font-weight: 400;">The housing market has consistently notched 2.2 per cent monthly gains in the last three months, which saw a slight deceleration in August. Median values in the city’s housing market rose 2.1 per cent on a monthly basis to a median of $691,214 – their highest value ever and $16,476 higher than the previous month.</span></p>
<p><span style="font-weight: 400;">Year-on-year data also impressed market observers with the 12-month change in Brisbane house prices at now at +20.2 per cent. </span></p>
<p><span style="font-weight: 400;">The city’s unit market saw further gains in the median value and a further acceleration in the pace of growth in August. Month-on-month, units saw a 1.4 per cent increase, significantly stronger than the 0.8 per cent seen in the previous month. The 12-month growth for the sector now stands at 8.9 per cent, with the median unit price in Brisbane at $425,777, which is $6,635 more than one month ago. </span></p>
<p><b>Supply and demand </b></p>
<p><span style="font-weight: 400;">The significant gap between the available supply and solid demand is another reason for the consistent increase in housing prices in Brisbane. </span></p>
<p><span style="font-weight: 400;">Latest figures released by SQM Research showed that residential </span><a href="https://www.smartpropertyinvestment.com.au/research/23078-august-listings-fall-to-record-low" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">property listings in Brisbane declined in August </span></a><span style="font-weight: 400;">2021 by 10.3 per cent to 23,203 from 20,804 in July 2021. Compared to the same period last year, total listings in the city have fallen by 28.2 per cent from 28,995 in August 2020. </span></p>
<p><span style="font-weight: 400;">CoreLogic’s data showed new listings have edged up by 5.3 per cent in Brisbane compared with the equivalent period last year but the total listings are down by 29.1 per cent. This indicates that more buyers are making compromises and purchasing properties that may have been on the market for a longer period.</span></p>
<p><span style="font-weight: 400;">This is corroborated by SQM’s data, which showed that old stock (or properties that have been on the market for more than 180 days) in Brisbane dropped by 10.9 per cent in August 2021 and they are down 59.4 per cent over the year. </span></p>
<p><span style="font-weight: 400;">In another indication of strong demand, transaction activity across the Queensland capital remains strong. According to CoreLogic, sales volumes in Brisbane rose 47.5 per cent in the year to July 2021, an annual change that indicated the heightened demand from buyers across the city.</span></p>
<p><span style="font-weight: 400;">Over the last 12 months, CoreLogic estimates that the number of home sales in the city is approximately 41 per cent higher than the five-year average, while total active listings are 30 per cent below the five-year average. </span></p>
<p><span style="font-weight: 400;">Melinda Jennison, the managing director of </span><a href="https://www.streamlineproperty.com.au/"><span style="font-weight: 400;">Streamline Property Buyers</span></a><span style="font-weight: 400;">, said that the </span><a href="https://www.smartpropertyinvestment.com.au/research/23084-brisbane-property-market-update-august-2021"><span style="font-weight: 400;">growing demand is not surprising</span></a><span style="font-weight: 400;"> given that mortgage rates are so low. In an article for SPI, she stated: “They (mortgage rates) have fallen by about 110 basis points since July 2019. This means that housing interest payments as a percentage of household incomes has declined from a peak of 10.6 per cent in 2008 to now just 4.7 per cent across Australia”.</span></p>
<p><span style="font-weight: 400;">The real estate executive also commented that “mortgage stress is not something that a lot of households have to worry about at the moment”. </span></p>
<p><b>Auction rates </b></p>
<p><span style="font-weight: 400;">In another show of its property market’s strength, Brisbane’s clearance rates tracked record-highs in August. </span></p>
<p><span style="font-weight: 400;">According to </span><a href="https://www.streamlineproperty.com.au/" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">Streamline Property Buyers</span></a><span style="font-weight: 400;">, Brisbane’s clearance rates throughout August 2021 tracked between 73 per cent and 80 per cent, a remarkable improvement from the same period last year, when clearance rates came in between 35 per cent and 58 percent. </span></p>
<p><span style="font-weight: 400;">Meanwhile, Brisbane was among the frontrunners in Domain’s latest auction data, just behind <a href=https://www.smartpropertyinvestment.com.au/data/nsw/2000/sydney>Sydney</a> and Canberra. The city recorded the highest monthly clearance rate of 60.1 per cent since Domain’s records began, indicating an unusually strong competition and demand over the final month of winter.</span></p>
<p><span style="font-weight: 400;">Houses that went under the hammer during the month recorded a clearance rate of 63.6 per cent with a median price of $990,000. The unit market fell behind houses with a clearance rate of 35.8 per cent with the median price at $557,500. </span></p>
<p><b>Rental market </b></p>
<p><span style="font-weight: 400;">Over the last 12 months, rents for Brisbane houses have risen by 10.1 percent, indicating a 0.7 percent increase from July. </span></p>
<p><span style="font-weight: 400;">Meanwhile, unit rental incomes in the city have recorded an annual increase of 5.6 percent in August, indicating a 1 percent increase from June. </span></p>
<p><span style="font-weight: 400;">Gross rental yields for dwellings in the city are compressing even further as rising dwelling prices outpace rent price growth. At a city-wide level, gross rents have fallen again this month to 3.9 per cent, down a further 0.1 per cent from last month, a new record-low for Brisbane. </span></p>
<p><b>Vacancy rates </b></p>
<p><span style="font-weight: 400;">SQM Research revealed that there were 4,732 vacant residential rental properties in Brisbane in August, which is down from the 4,651 vacancies in July. Despite the decline, Brisbane’s vacancy rate was unchanged at 1.3 per cent on a monthly basis. </span></p>
<p><span style="font-weight: 400;">There was a small increase in vacancy in the Brisbane CBD, which contrasts with the trends observed in previous months.</span></p>
<p><span style="font-weight: 400;">Louis Christopher, managing director of SQM Research said that the lockdowns have impacted vacancy rates in August. He noted that in addition to SQM recording new declines in rental vacancy across the regions, CBD rental vacancy rates have also surged again over August. </span></p>
<p><span style="font-weight: 400;">In the coming month, the expert expects vacancy rates to decline again. “We anticipate that vacancy rates will fall again over the month of September. Weekly listing updates through to the 12th of September suggest a further tightening of conditions and so it is reasonable to expect another surge in rents in most areas except for the CBD locations,” he said. </span></p>
<p><span style="font-weight: 400;">Despite the increase in vacancy rates in Brisbane CBD, vacancy remains tight across the city. While Domain’s data showed that vacancy rates also nudged higher from 1.3 per cent in July to 1.4 per cent in August, it noted that the city’s current monthly rate remains tight and is sitting close to multi-year lows.</span></p>
<p><span style="font-weight: 400;">The areas with the lowest vacancy rates in Brisbane and Gold Coast were <span class='b-autolinkshadowbox'>Caboolture<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/qld/4510/caboolture>Caboolture, QLD</a> <a href=https://www.smartpropertyinvestment.com.au/data/qld/4510/caboolture>Caboolture, QLD</a></span></span> – Hinterland (0.3 per cent), <span class='b-autolinkshadowbox'>Nerang<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/qld/4211/nerang>Nerang, QLD</a> <a href=https://www.smartpropertyinvestment.com.au/data/qld/4211/nerang>Nerang, QLD</a></span></span> (0.3 per cent), Gold Coast Hinterland (0.3 per cent), <a href=https://www.smartpropertyinvestment.com.au/data/qld/4157/capalaba>Capalaba</a> (0.3 per cent), and <span class='b-autolinkshadowbox'>Ormeau<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/qld/4208/ormeau>Ormeau, QLD</a> <a href=https://www.smartpropertyinvestment.com.au/data/qld/4208/ormeau>Ormeau, QLD</a></span></span> – <span class='b-autolinkshadowbox'>Oxenford<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/qld/4210/oxenford>Oxenford, QLD</a> <a href=https://www.smartpropertyinvestment.com.au/data/qld/4210/oxenford>Oxenford, QLD</a></span></span> (0.3 per cent). Meanwhile, the areas with the highest vacancy rates were Brisbane Inner (4.1 per cent), <a href=https://www.smartpropertyinvestment.com.au/data/qld/4075/sherwood>Sherwood</a> – <a href=https://www.smartpropertyinvestment.com.au/data/qld/4068/indooroopilly>Indooroopilly</a> (2.6 per cent), <a href=https://www.smartpropertyinvestment.com.au/data/qld/4111/nathan>Nathan</a> (2.4 per cent), Brisbane Inner – West (2 per cent) and Brisbane Inner – North (1.9 per cent). </span></p>
<p><b>Outlook </b></p>
<p><span style="font-weight: 400;">With strong demand, low supply and comparatively more affordable properties than its bigger capital city peers, everything’s coming up roses for Brisbane as the real estate market head into what is considered to be its busiest time of the year: spring season. </span></p>
<p><span style="font-weight: 400;">According to CoreLogic, new listing numbers can be expected to ramp up in Brisbane leading up to spring. However, local experts say that demand will likely continue to outpace the demand from buyers in the market right now. This, in turn, is seen to continue driving up prices in the city in the coming months. </span></p>
<p><span style="font-weight: 400;">Experts also advised to look out for other potential headwinds that can affect Brisbane’s property market, such as further lockdowns from the COVID Delta outbreak, tighter credit policies and affordability constraints. </span></p><style>.b-glossaryTitle { padding: 0 0 5px 0;font: normal normal bold 16px/25px Poppins;letter-spacing: 0px;color: #000000;text-transform: uppercase;opacity: 1;text-align: left;border-bottom: 1px solid #d7d7d7;} .b-glossaryTerm { text-decoration: none !important;text-align: left;font: normal normal bold 16px/23px Poppins;letter-spacing: 0px;color: #EA5A1F !important;opacity: 1; }.b-glossaryDef {text-align: left;font: normal normal normal 16px/23px Questrial;letter-spacing: 0px;color: #000000;opacity: 1;}</style><div style="background-color:#FFFCFA;"><h2 class="b-glossaryTitle">RELATED TERMS</h2><div style="margin-bottom:5px;"><a class="b-glossaryTerm">Property</a><p class="b-glossaryDef">Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.</p></div></div><style>.b-autolinkshadowbox { display: inline; position: relative; cursor: pointer; color: #428bca;} .b-autolinkshadowbox:hover > span { display: block !important; } .b-autolinkshadowbox__links { white-space: nowrap; z-index: 999; display: none; left: 0; border: 1px solid #bfbfbf; border-radius: 5px; font-size: 12px; top: 12px;color: #000; padding: 10px; position: absolute; background-color: #FFF; box-shadow: 0px 0px 20px 1px #bfbfbf; } .b-autolinkshadowbox__links > a { display: block; padding: 3px 0; }</style>
1 MIN READ
