Brisbane property market update July 2022

By Melinda Jennison 06 August 2022 | 1 minute read

There have been some big changes this month throughout Brisbane, and we are now seeing a split market whereby the median value for houses has retracted, whilst at the same time, the median value for units and townhouses has continued to grow. 

Brisbane aerial skyline spi

Whilst there are still a number of buyers in the market throughout the city, a large portion of the buyers appear to be fearful and are taking a stance to sit on the sidelines and observe the market activity, rather than participate in active bidding on properties. Other buyers are gearing up to take advantage of any opportunities that the current conditions might present.

When combined, the median trend in dwelling values over the month of July showed a decline of -0.8 per cent across Greater Brisbane. This retraction is not as great as the fall in median values in Sydney being -2.2 per cent, Melbourne -1.5 per cent, Hobart -1.5 per cent, and Canberra -1.1 per cent. Other capital cities, including Adelaide, PerthPerth, TAS Perth, WA and Darwin, showed small growth rates in median values across the same period. It is clear that the slowdown in property price growth throughout Australia coincided with the onset of the first interest rate hike in May, and the resultant change in consumer sentiment has been very obvious.

 

Source: CoreLogic

With consumer sentiment being pushed to new lows in July, it is apparent that both the rate and the pace of the deterioration are comparable to previous major shocks such as the global financial crisis and the onset of the COVID-19 pandemic. Respondents who were part of the most recent Westpac consumer sentiment survey identified inflationary pressure, interest rates, the domestic economy and international conditions as the major concerns at this time.

The rate of change in median value trends over the last couple of months has been evident more so in the housing market compared to the unit/townhouse market in Brisbane. Median values for houses across Greater Brisbane have declined -1.1 per cent in July. The current median value for houses is $884,336, which is $7,797 LESS than last month.

 

Source: CoreLogic

In the unit market in Brisbane, the median value INCREASED in July by 0.7 per cent. The current median value for Brisbane units is now $504,520, which is $3,446 MORE than last month.

 

Source: CoreLogic

We have observed the shift in demand over recent months away from housing and towards quality townhouses and units. Perhaps this has been stimulated by affordability constraints due to the rapid growth in Brisbane house prices over the last 18 months. A $500,000 budget used to be sufficient for a reasonable house on its own lot within 30 kilometres from the Brisbane central business district, but now, that budget typically needs to be a lot higher. 

Instead of shifting further and further away from the CBD to buy a house with a similar budget, buyers have been choosing to compromise on the type of property that they buy and look for townhouse or unit options much closer to the inner-city locations.

This shift in demand is a trend that is also observed in the data. From April this year, the unit market has outperformed the housing market in terms of monthly median price growth in Brisbane. This month, despite negative house price growth for the first month in two years, the unit segment of the market continued to see value growth.

Whilst the majority of markets around Australia are now shifting into a different stage of the property cycle, Brisbane retains a lot of favourable advantages over the major cities of Sydney and Melbourne in terms of the future outlook.

Firstly, Brisbane has a relative affordability advantage, which has been the case for many years. Despite the gap narrowing over the most recent growth cycle, there remains a significant affordability advantage for property buyers in Brisbane in the housing sector as well as the unit sector of the market. This places Brisbane in a better position to ride out the uncertainty in the months ahead.