You are currently viewing International Border Reopening to Cause Housing Price Surge

International Border Reopening to Cause Housing Price Surge

  • Post author:
  • Post published:April 27, 2021
  • Post category:News

Article originally published on Real Estate AU

Aussie Home Loans CEO James Symond

Aussie CEO James Symond, has warned of another surge in real estate prices when the pandemic restrictions ease. Picture: Britta Campionn

Reopening Australia’s borders to migration and international students will push house prices up even further, as exclusive new data reveals Brisbane’s highest median has soared more than fourfold over three decades.

Industry experts say another wave of real estate price surges is all but guaranteed when the pandemic measures ease, with demand – already fuelled by record low interest rates and strong economic growth – expected to intensify against a backdrop of continued short supply.

The warning comes amid a phenomenal surge in the median prices at the pointy end of the Brisbane market, and a massive flip in the suburbs that were once deemed blue-chip.

Aussie Home Loans CEO James Symond

Aussie CEO James Symond has warned of another housing price surge when international borders fully reopen. Picture: Britta Campion

New figures from CoreLogic, commissioned by Aussie, show high-end areas Teneriffe and New Farm that were not even in the top 10 most expensive Brisbane median-priced suburbs 20 years ago, were first and sixth respectively at the end of 2020.

Teneriffe ($1.79 million) nudged out and Ascot ($1.614 million) for top spot followed by Chandler ($1.589 million), Hamilton ($1.493 million), St Lucia ($1.409 million) and New Farm ($1.401 million).

On a statewide basis, Teneriffe sits second only to Main Beach ($2.038 million) on the Gold Coast.

New Farm, though, has never figured on the most expensive suburb radar until 2010 when it snuck into ninth place ($990,558).

It’s well above the median house price for Brisbane which has risen 245 per cent over the past 30 years to be $523.000 by the end of 2020. It $151,259 in 1990.


A ferry passes the Brisbane riverside suburb of Teneriffe which has a median house price of $1.79 million – the highest in Brisbane and second highest in the state. Picture: Richard Walker

However, once the international borders reopen, overseas students start arriving and migration gathers momentum, it will add another layer of demand and result in a second wave price surge, says Aussie home loans CEO James Symond.

Australia’s borders have been closed for a year because of coronavirus and will remain closed until at least June 17, Health Minister Greg Hunt recently announced.

“It can be counterintuitive to open borders because as soon as you have migration and university students coming, the real estate market will get even hotter,” Mr Symond said.

“It adds another layer of demand and people say the market place is too hot as it is.

“I argue that in six, 16 and 26 months it is going to be even hotter as we open the borders to allow more migration and university students to come to Australia.”

CoreLogic head of research Tim Lawless said the gentrification of several inner-Brisbane suburb is behind the rise of the median house prices close to the CBD. Picture: Supplied

CoreLogic head of research Tim Lawless said the second wave of demand would not be immediate, but nevertheless would eventually occur.

He said temporary migrants, such as international students and visitors, tend to rent while the other 40 per cent arriving in Australia with longer term plans to stay will rent first and then buy.

“If you open up international borders again, you get another surge in population growth,” Mr Lawless said.

“We will first see inner city apartment markets tenancy demand shore-up and stabilise and the progressively see that permanent migration trend flow through to additional purchasing demand and a second wave of price surges.

“We already have an increase in demand being fuelled by low interest rates and an economy that is outperforming forecasts against a really low supply backdrop with listing numbers about 20 per cent down on what they were a year ago and demand 35 per cent up.”

In recent years the median prices have surged within a 5km radius of the CBD, but before the turn of the century the fringe suburbs were the place to invest.


Scooter riders enjoying the River walk at New Farm which has the sixth highest median house price in Brisbane ($1.401 million). The suburb never made the top 1o in 2000. Picture: Richard Walker

In 1990, Robertson ($326,675), Anstead ($301,555) and Burbank ($290,006) held the top three most expensive median-priced suburbs while Brookfield ($253,347) and Upper Brookfield ($214,059) were sixth and 10th respectively.

Three decades on and just two suburbs, Upper Brookfield (eighth, 1.273 million) and Brookfield (10th, 1.25 million), have held their place in the top 10 most expensive median-priced Brisbane suburbs.

The gentrification of inner-Brisbane, in particular New Farm, transformed unattractive suburbs into real estate magnets that lured strong commercial and private investment and wealthy neighbourhoods, Mr Lawless said

“If you think back to the 1980s and 1990s, urban renewal wasn’t even thought of, but progressively we have seen a lot of these inner city precincts undergo a very structured urban renewal process and along with that came a whole bunch of capital investment to rejuvenate the housing stock,” he said

“New Farm is one of the best examples of a suburb that has undergone urban renewal.”