Are the worst price declines in Brisbane now behind us?
The news around property market movements in Brisbane, based on CoreLogic data, has suddenly become more positive due to a fast recovery in the rate of decline in dwelling prices throughout February.
- Brisbane has demonstrated a sharp reduction in the rate of price declines throughout February 2023
- Listings remain tight with 29 per cent fewer listings than the five-year average throughout Greater Brisbane
- The rental market remains strong with gross yields continuing to increase
According to Proptrack, Brisbane has now seen its second consecutive month of small median price gains. Regardless of which data house we rely upon to assess market changes, it is evident that something has shifted in the last couple of months, and the question to ask is are the worst conditions now behind us? Or is this improving trend not sustainable? The uncertainty around rising interest rates was definitely a contributing factor to the changes in market conditions throughout the second half of 2022 in Brisbane. Buyer confidence dropped away, and even the numbers at open homes and auctions thinned out.
Despite more rate rises expected in the coming months, it is widely accepted that we are much closer to the peak in this cycle. So, perhaps buyers are now pricing in their worst-case scenario and moving ahead with their purchasing decision regardless of what further rises might lie ahead.
With the Queensland state government as well as the federal government striking a $7 billion deal for the Brisbane 2032 Olympic and Paralympic Games in February, this is a huge injection of funds into a new infrastructure for Brisbane.
This is set to have a long-term and transformational impact within Brisbane. The city will become a global city, thus boosting economic activity, employment opportunities and long-term prosperity.
Listing Volumes
Throughout all of Greater Brisbane, CoreLogic data confirms that listings are down -29 per cent compared to the five-year average. Over the last 12 months, the number of new listings has plummeted by -22.4 per cent.
It is evident that, in general, sellers are holding back from listing their property for sale and this is constraining supply. It also suggests that there is little evidence of panicked or forced selling.
Despite the broader trend, there are still markets within markets. According to PropTrack, suburbs including Greenbank, Park Ridge and Burpengary East have seen a surge in new properties available for sale over the last 12 months. Whereas suburbs such as Thornlands, Eagleby and Calamvale have seen listing volumes plummet.
Buyer Activity
There is an increased level of buyer activity that has built upon the number of buyers who were out and about throughout January.
It is not just the volume of people at open homes and auctions that has been increasing, but also the average number of registered bidders at auctions and the percentage of active bidders who are participating in auctions through Brisbane. Clearance rates have also been improving month-on-month throughout the city.
According to Apollo auctions data, Brisbane auctions were attracting crowds an average of 33.8 people (January was 28) with an average of 4.9 registered bidders (2.5 in January) and 60.35 per cent of those registered, actually putting up their paddle (compared to 58.6 per cent in January). These numbers were all elevated compared to the latter months of 2022 as well.
Clearance rates in Brisbane for February were an average of 58.5 per cent according to CoreLogic. Apollo auctions have their auction clearance rate for Brisbane throughout February at 71.2 per cent. Both values are much higher than in the latter months of 2022.
There are also more potential buyers per listing since the Spring selling season of 2022, confirming our on-the-ground observations over recent weeks.
The low listing environment is most likely compounding this effect across Brisbane. Because of this, quality listings are more popular and sales agents are again starting to reduce the time frame between listing and selling when the buyer depth allows for this. This has also led to a pick-up in competition among potential buyers, with some properties attracting multiple offers.
Dwelling Values Brisbane
The slowdown in the rate of price falls in Brisbane is reflected in dwelling values falling -0.4 per cent throughout February, compared to -1.4 per cent in January. The quarterly change is rapidly slowing as well. At the end of January, the quarterly change in Brisbane Dwelling values was -4.8 per cent, whereas by the end of February, this had decelerated to -3.2 per cent. From the start of COVID-19 through to the end of February 2023, Brisbane dwelling values are still 31.7 per cent higher despite the recent falls.
The median value of a dwelling in Greater Brisbane according to CoreLogic is now $694,495.