Brisbane property market update September 2021

Oct 2021Karen Millers

Throughout September, the residential property market in Brisbane remained robust, with growth still very strong, especially in the housing sector. This growth is being fuelled by a number of factors contributing to low supply and high demand. We will run through a few of these things in this market update.

Firstly, the availability of properties to buy (supply) is down. According to CoreLogic data, total advertised stock in Brisbane is still -28.7 per cent lower up to 29th August 2021, compared to the equivalent period last year. Although new listings over the same period are +8.3 per cent higher in Brisbane, the rapid rate of absorption means there is not a lot that is available to buy in the current market throughout our city.

Secondly, demand is very high. This continues to be supported by the expectation that mortgage rates will remain at record lows for an extended period of time. Brisbane has avoided lockdowns over recent weeks, so our local economy continues to thrive. We remain a much more affordable market, and now we are seeing investor activity rise with 29.7 per cent of all housing finance commitments throughout July 2021 going to investors, most likely driven by the higher yields and also strong capital growth prospects.

A recent Annual Investor Sentiment Survey by Property Investment Professionals of Australia (PIPA) confirmed that a staggering 58 per cent of respondents believed that Queensland offers the best property investment prospects over the next 12 months. This is a huge increase off the back of last years’ results where a smaller 36 per cent of investors thought Queensland offer the best investment prospects.

According to data released by realestate.com, year on year investor enquiry has increased the most in Brisbane, up 186 per cent compared to the previous 12-month period.

According to their report, the regions within Greater Brisbane which experienced the highest spike in investor inquiry include Logan, Moreton Bay, Ipswich, and north Brisbane. It was suggested that relative affordability and tight rental markets appear to be piquing investor interest in these areas. This is especially true when comparing Brisbane to other east coast capital city markets.

Net migration into Queensland throughout 2020 was almost double the decade average, meaning more people needing somewhere to live.  Initially, this puts pressure on the rental market, but through our own inquiry, we are also seeing a lot of people who want to relocate, buying now before they make the move in the future.

According to ABS data, we had more than 58,000 people move to Queensland during the six months to March 2021. The data also showed that there was a shift to regional NSW and regional Queensland, but apart from this, Greater Brisbane actually recorded the largest net flow of people into the capital city from March 2020 to March 2021. Perhaps the drivers include people wanting more sun, less traffic, and a more affordable lifestyle.

With Household Wealth across Australia rising 5.8 per cent in the June 2021 Quarter, to a record-high of $13.4 trillion, there seems to be a lot of money available to spend once the national economy opens up. As the vaccinations continue to roll out, and pathways out of lockdowns being planned, it seems that the future remains bright for Australia on the other side of COVID-19. That said, the Queensland borders are still shut, and at some stage, we will need our own pathway forward so that we can operate as one national economy again in the future.

Let’s take a deeper look into the performance of the Brisbane market throughout September 2021.

Brisbane Property Market Prices

The latest Hedonic Home Value Index data by CoreLogic released on 30 September 2021 has confirmed that the median dwelling value in Brisbane increased a further +1.8 per cent over the month of September. This is slightly lower than the dwelling growth that was experienced in Brisbane throughout July and August, which suggests a slight slow down in the momentum of price growth across the city. The current median value for dwellings across Greater Brisbane is $625,291, which is $12,914 higher than just one month ago.

The quarterly growth in dwelling values across Greater Brisbane is 5.9 per cent, indicating a slight slowdown since last month, and annual growth for the last 12 months is now 19.9 per cent.

The top end of the Brisbane Market is still driving the growth, as you can see in the CoreLogic data below. This shows that the strongest growth in dwelling values occurred in the top 25 per cent of values in the three months to August 2021, with 6.9 per cent growth in that market segment (no change in this growth compared with the three months to the end of July) compared to 4.3 per cent growth in the lowest 25 per cent of values across the city (again no change in this growth since the end of July). Whilst both the highest value and lowest value segments of the market continue to show growth over the last three months, the rate of growth at the top end continues to outperform when comparing the month-on-month trends.

Brisbane House Prices

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 2 per cent across the month of September 2021, which is slightly below the 2.1 per cent growth in August. Prior to that, monthly growth was trending at 2.2 per cent throughout May, June, and July, so there has been a slight reduction over August and again during September. The 12-month change in Brisbane house prices has been 22.2 per cent. The current median value for a house in Greater Brisbane has now broken the $700,000 threshold. It is currently $709,136 – the highest it has ever been. This is $17,922 MORE than one month ago!