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Brisbane Housing Market Insights: May 2021

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  • Post published:May 16, 2021
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Article originally published on The Urban Developer

The Urban Developer’s Brisbane housing market insights for May reveals increased demand for houses and approvals for new units has been underpinned by increasing consumer sentiment and a surge in interstate migration.

This resource, to be updated monthly, will collate and examine the economic levers pushing and pulling Brisbane’s housing market.

Combining market research, rolling indices and expert market opinion, this evolving hub will act as a pulse check for those wanting to take a closer look at the movements across the market.


Brisbane’s typically slow-moving property market has continued to rise as part of a once-in-a-decade boom that experts say could fuel a further 10 per cent rise in house prices in the coming year.

Brisbane house prices have soared to record heights for the seventh consecutive quarter, with tight stock levels and strong demand across all demographics increasing competition.

Investors have also made their way back into the market and competition is heating up.

The latest Corelogic home value index shows Brisbane dwelling prices have risen by 1.7 per cent on a rolling four-week basis.

Brisbane house prices advanced a further 1.8 per cent during April, pushing it up 6.2 per cent for the recent quarter and 9.6 per cent for the year to date.

The current median value for dwellings is $558,295 which is $10,000 higher than just a month ago.

The median house price of $621,806 continues to attract interstate migrants from the larger markets of Sydney, where the median is now $1.14 million, and Melbourne at $869,676.

The current median unit price in Brisbane is $405,902, which is $5,000 more than one month ago.

Brisbane median house and unit price values

 
TypeMonthQuarterAnnualMedian
All1.7%▼5.6%▲8.3%▲$558,295▲
Houses1.8%▼6.2%▲9.6%▲$621,806▲
Units1.0%▶3.0%▲2.4%▲$405,902▲

^Source: Corelogic Hedonic Home Value Index – April


The resurgence of buyer interest in the Brisbane property market has meant that auction clearance rates have consistently been in the 70 per cent range.

Clearance rates across April notably higher for houses compared to apartments, reflecting broader trends.

Hot spots included Brisbane’s inner city, inner east, inner west and the inner north – where house prices skyrocketed by 13 per cent over the past year to $1.2 million, 13.2 per cent to $1.053 million, 10.4 per cent to $1.17 million and 13.1 per cent to $1.1 million.

Brisbane auction clearance rates

WeekClearance rateTotal Auctions
Week ending 11 April 202180.9%123
Week ending 18 April 202172.7%104
Week ending 25 April 202176.2%105
Week ending 2 May 202176.0%104

^Source: Corelogic Auction Clearance Rates – April


Brisbane is experiencing one of the tightest rental markets in a decade on the back of high demand coupled with extremely low supply.

Across April, Brisbane’s rental markets are experienced a tightening of supply, with vacancy rates currently sitting at 1.8 per cent.

Rental returns and yields have significantly increased in Brisbane, with rents soaring from 5 per cent to 15 per cent.

Gross rental yields sit at 4 per cent for houses and 5.2 per cent for units—much higher than other capital cities such as Sydney and Melbourne.

Some of the tightest vacancies across the capital’s suburbs include Anstead (0.5 per cent), Birkdale (0.3 per cent), Capalaba (0.2 per cent), Ferny Hill (0.3 per cent), Gumdale (0.4 per cent), Manly West (0.5 per cent), Rothwell (0.2 per cent), Sandgate (0.5 per cent), Shailer Park (0.4 per cent), Thornside (0.3 per cent) and Wakerley (0.4 per cent).

Brisbane residential rental vacancy rate

CityApril 2021 vacancy rateMonthly % change
Brisbane1.4%▼0.1%▼

^Source: SQM Research – April

Rental stock on market

CityApril 2021 vacanciesVacancy net loss
Brisbane4780▼627▼

^Source: SQM Research – April

Brisbane rent prices

TypeRentMonthly % changeAnnual % change
Houses$489.10▲0.5%▲6.8%▲
Units$386.60▲0.5%▼2.8%▲

^Source: SQM Research – April


Brisbane’s housing market has remained particularly unaltered by the closure of international borders, where historically high demand from overseas migrants has been disrupted.

Tight stock levels and strong demand across all demographics have made it incredibly difficult not only to find a property to buy but to also secure something at a reasonable price.

Loan data shows investors have started coming back into a housing market they had largely vacated and the boom is being driven overwhelmingly by established owner occupiers.

Another big part of the demographic buyer base helping drive demand in Brisbane has been first homebuyers.

Brisbane’s proportion of home loans that remained on deferral at the end of March was just 0.7 per cent, indicating a very very low likelihood of distressed selling.

The seasonally adjusted estimate for total dwelling units approved in Queensland in March was 4547, 12.1 per cent up on February’s figures.

Queensland building approvals

^Australian Bureau of Statistics, (Suspension of trend series between May 2020 and Jul 2020 due to Covid-19)

DwellingApprovedMonthly % change
Houses2792▲-4.0%▼
Units4547▲12.1%▲

^Source: Australian Bureau of Statistics; Reference period February

Queensland home loan lending indicators

RegionFirst home buyer loan commitmentsFirst home buyer ratio – dwellingsFirst home buyer ratio – housing
Queensland3437▲36.6%▼32.3%▼

^Source: Australian Bureau of Statistics – March

Queensland interstate migration

RegionSeptember (quarter) 2020 arrivalsSeptember (quarter) 2020 departuresSeptember 2020 quarter net
Queensland22,317▼15,080▼7,237▲

^Source: Australian Bureau of Statistics – September quarter 2020


Brisbane’s housing market: policy updates

Australia’s central bank will maintain low interest rates to support the country’s ongoing economic recovery and surging housing market, buoyed by its busiest Easter auction market on record.

Strong tailwinds will bolster the Australian economy through the second half of the year, but macro-prudential measures are likely to be introduced to ease house price pressures in 2022.

Queensland faces a “hard road” during the next four years as the state recovers from the coronavirus pandemic, Treasurer Cameron Dick says.


Brisbane housing market forecasts

ANZ economists forecast Brisbane house prices will rise by 9.5 per cent next year, as low interest rates and government stimulus flow through the economy while Commonwealth Bank updated its forecasts, projecting a strong rebound in prices across the second half of 2021.

CBA now expects Brisbane house prices to increase by 16.6 per cent to December 2022 compared to 13.7 per cent in Sydney and 12.4 per cent in Melbourne.

Westpac has also updated its property forecasts, with Brisbane real estate prices tipped to surge 20 per cent between 2022 and 2023.


What the experts are saying about Brisbane’s housing market

Eliza Owen, Head of Research, Corelogic

Eliza Owen
Head of Research
Corelogic

“Property prices reach a point where growth rates naturally start to slow, off the back of affordability constraints, and a reduced willingness to pay when property becomes more expensive.

“There’s also evidence that stock levels are starting to increase, with new listings added to the market (both auction and private treaty) in the 28 days to April 18 up 0.4 per cent on the previous period, and up 10.9 per cent on the five year average.”

Dr Nicola Powell


Nicola Powell
Senior Research Analyst
Domain

“Brisbane is still affordable compared to other capital and buyers moving from Sydney and Melbourne will have deeper pockets so I think the fundamentals are there for continued price growth.

“I think this boom still has some legs, and I don’t think prices will fall anytime soon.

“We’re still seeing robust activity in the marketplace, so I think we will continue to see price growth, although it won’t be as high as what we saw in that first quarter.”

Gareth Aird


Gareth Aird
Head of Economics
Commonwealth Bank

“Brisbane is less reliant than both cities on international migration that has been impacted by border closures.

“The vacancy rate in Brisbane is around 2 per cent compared to 4 per cent in Sydney and Melbourne.

“The boom is being driven by record low mortgage rates coupled with a V-shaped recovery in the labour market.”