Brisbane property market update September 22: Is the worst behind us, or is there more pain to come?

Oct 2022Karen Millers

Brisbane has seen another month of price falls based on median settled sales data. Is the worst now behind us, or is there more pain to come? The answer depends on a few things. It depends if you are a buyer, a seller, a landlord or a tenant!

Interest rates have risen 250 basis points across the last six months, which is the fastest tightening cycle since 1994. This has definitely had an impact on buyer demand. According to PropTrack, there are now 29.4 per cent FEWER potential buyers per listing for houses in Brisbane. This is compared to the recent peak. For Brisbane units, there are now 12.6 per cent fewer potential buyers per listing, compared to the peak. This confirms that the drop in demand has been more severe for houses compared to units across Brisbane.

The change in the number of potential buyers per listing for houses now, compared to the pre-pandemic period, is +79.8 per cent. For units, the buyer activity in Brisbane for the same period has increased 126 per cent. This is according to PropTrack data. 

This confirms that buyer demand has slipped over recent months. But it remains strong looking historically to the period prior to the COVID-19 pandemic.

Whilst demand is lower according to these indicators, we started to see more people turn up to property inspections again throughout September, compared to July and August. Perhaps this is due to buyers having fewer choices in the market.

New listings have been reducing in Brisbane for the last three months (see below). At the same time, total listings have been increasing.

What does this mean?

  • Sellers are less motivated to list their properties for sale (especially in the last two to three months) — probably because they are uncertain about the price that they might achieve.
  • There is NOT a trend of high levels of forced selling!
  • Some sellers are less willing to meet the market, OR buyers are becoming more selective about what they will buy, which is why days on market are trending higher, as evidenced by increasing levels of older stock.

Domain auction clearance rates have been improving across Brisbane since July. The monthly average clearance rates in July were 39.8 per cent. By August, this increased slightly to 40.25 per cent, and for the four weeks in September, the average auction clearance rate in Brisbane increased to 53 per cent. The graph below also shows that the clearance rates in Brisbane have bottomed out.

Rising interest rates have also been impacting the amount of money prospective buyers can borrow. Even with cash rate increases of 225 basis points, borrowers’ maximum loan size was reduced by around 20 per cent. With a further 0.25 per cent rate rise in October, this is now further reduced. This means that the pool of buyers who are able to purchase higher-valued properties is reducing. 

The median value price falls in Brisbane are being led by the more premium end of the market, as can be seen in the graph below.

Dwelling values

Across September, according to the CoreLogic Hedonic Home Value Index, Brisbane dwelling values declined -1.7 per cent. Like most other major capital city markets, this demonstrates a loss of momentum in the pace of price falls compared to last month. The median value for a dwelling in Brisbane is now $746,017, which is $16,267 LESS than last month.

Brisbane remains a more affordable market than Sydney, Melbourne, Hobart and Adelaide when we assess the dwelling-to-income ratio of capital cities throughout Australia. This is despite being one of the highest-growing capital city markets over the last 18 months. It is perhaps another reason that the Brisbane market has been less impacted during the current downturn.

House values

Housing values are leading the downturn in Brisbane, as evidenced by a greater month-on-month decline in this sector compared to units.

For the last three consecutive months, median Brisbane house values have declined. The rate of decline has recovered slightly in September, compared to August. Units have seen a decline for the last two months, although there have been relatively minor median value changes in this segment of the market.

For the month of September, CoreLogic Hedonic Home Value Index data confirmed that Brisbane houses declined a further 2 per cent, with quarterly falls now at -5.1 per cent. The median value for a house in Greater Brisbane is now $841,923. This is down by $50,210 from the market peak in June, where median house values were $892,133.

Unit values

Unit values are a lot more resilient in Brisbane in the current downturn. This is perhaps because they are a lot more affordable, compared to houses. Also, the oversupply of units that we saw in the years following peak construction in 2016 has now corrected, and there is a lack of quality unit stock being built — hence lower levels of supply.

Throughout September, Brisbane units saw prices decline by just -0.1 per cent, but quarterly growth remains in positive territory at +0.4 per cent. The median value for a unit in Brisbane is now $501,255, just $3,265 off the recent peak, which was $504,520 at the end of July 2022.

The rental market in Brisbane

The rapid rise in rents in Brisbane over the last 12 months has been building for some time. Since 2017, the residential vacancy rate has been falling in Brisbane.  According to SQM Research, our city now has month-on-month record-low vacancy rates recorded. The current vacancy rate across Greater Brisbane is 0.7 per cent.

It has been reported that nearly 30 per cent of rental dwellings have been stripped from the Queensland market in two years. The 2022 PIPA Annual Investor Sentiment Survey found that during this time, more than 160,000 investment properties were potentially sold to home buyers throughout the state. This means rental stock in Queensland has potentially fallen by an extraordinary 29 per cent in just two years.

The 2022 PIPA Survey showed that 19 per cent of investors nationwide have signalled they intend to sell even more property within the next 12 months. This confirms the assumptions above. The number one reason cited in this survey was the fact that Queensland’s proposed new land tax law would penalise owners of property in other states/territories. With the land tax proposal now scrapped, it is possible that these projected numbers will change. Of course, time will tell.

With rents rapidly increasing in Brisbane, the portion of income required to service new rents has reached its highest level since 2009. Affordability is starting to be challenged for those who are renting properties in Brisbane.

For investors who are looking for some solid returns, especially those lured by higher yields, there is likely to be some strong income growth in the months and years ahead. This is due to the factors highlighted above. Unless we see new rental accommodation being added to the market, it will be hard to imagine how rents won’t keep escalating into the foreseeable future.

Perhaps now that the Queensland land tax proposal has been scrapped, we will start to see more investors show interest once again. This is especially true for those who are looking for some strong yields, along with the prospect of strong growth in the lead-up to the 2032 Olympic Games and beyond.

What will happen in the months ahead?

Looking back at previous months, we feel that July demonstrated the lowest level of activity in the Brisbane market. August showed a slight improvement, but there was a definite improvement throughout September. This also seems to be reflected in the data, given the fact that when we assess the data, we are looking in the rear-view mirror. We have seen a small improvement between August and September (reflecting what was happening on the ground between July and August), and we expect that the results next month will show a further improvement.

We believe the initial shock of rising interest rates has passed, although we recognise that if interest rates continue to rise rapidly in the months ahead, this may create additional headwinds. The good news is that the October rate rise was less aggressive, and inflation appears to be slowing, which might see the Reserve Bank of Australia start to ease back on the rate hiking cycle that commenced in May this year. 

Overall, the Brisbane property market is not in a terrible state. Supply is tight, unlike other capital city markets around the country. This is a significant point of difference. 

Demand is picking up again. Buyers are out, and there are plenty of shoes at the doorstep of open homes. 

And, despite such strong price growth over the last 18 months, relative to incomes, Brisbane property values are still very affordable.

Some see the current market conditions as a downturn. As Brisbane buyer’s agents, we see the current market conditions as an opportunity to buy well, with less competition. The longer-term prospects for Brisbane remain strong. When the focus is on quality, the right time to buy is when buyers can afford to do so. It is impossible to determine the point at which a market turns, so our recommendation is always to ignore the noise and focus on what you are trying to achieve. Time in the market matters more than trying to time the market.

Originally Published: Melinda Jennison, Streamline Property | Smart Property Investment | 7 October 2022

Brisbane Property Market Update September 2022 | Exclusive Insights (

Are you watching the clock

Apr 24

Is now the right time?” It’s a commonly asked question by both buyers and sellers in the property game, and while real estate experts often caution against trying to time the market, there are several factors that can help you decide if the market is ripe for buying or selling.

We strive to bring accountability, ethics, and education to the property investment industry.

PIPA exists to improve the professional standards of anyone providing property investment advice to consumers. Our voluntary Code of Conduct means that members adhere to a high set of professional standards to help protect consumers. Qualified Property Investment Advisers (QPIAs®) have the highest form of industry-recognised, specialist training and can be trusted to provide tailored and unbiased advice to consumers.

PIPA also regularly produces research, analysis, and publications to help educate our members, media, and consumers about the property investment sector.

By signing up for our newsletter, you will gain access to two of our most valued resources – the Annual Investor Sentiment Survey report and the quarterly PIPA Adviser e-magazine.

2023 Investor Sentiment Survey

The Annual PIPA Investor Sentiment Survey is a rare snapshot of the buying intentions of property investors.

PIPA Adviser Magazine

The PIPA Adviser provides the latest research on market conditions, including forecasts for next year.