BOOMING BRISBANE MARKET REACHES NEW PEAK
CoreLogic figures just released for November confirm that the optimism surrounding the potential of the Brisbane market is justified, with median house prices in the city reaching a new high peak of $568,629. Unlike Sydney and Melbourne, the Brisbane market has remained relatively unaffected and has proved very resilient throughout the COVID-19 pandemic.
The factors that are driving the Brisbane market include:
- High levels of inter-state migration.
- Auction clearance rates have been consistently better the same time last year.
- Median house prices have been rising on a monthly basis, with Brisbane weathering the COVID-19 better than most of the other capitals.
- Transaction numbers are increasing and the relatively low number of listings is creating short supply at a time of high demand.
- Brisbane remains much more affordable than either Sydney or Melbourne.
- Extremely low interest rates are driving demand
- Consumer confidence is at a 7 year high
- Newly announced Queensland State Government spending on infrastructure, social housing and a rent-to-build program will further increase demand
Brisbane’s property market has remained relatively strong throughout the COVID-19 pandemic, thanks in part to a strong response from the Queensland government to managing the crisis. Median prices only recorded a mild dip through June to August, and are now rising strongly again with Westpac predicting prices will increase by 20 per cent over the next two years.
However, the resilience of the housing market was likely propped up by the fact that there fewer new listings on the market during 2020 as sellers took a wait and see approach during the pandemic. There were 3,863 new listings in November, and while this was only 1 per cent lower than the same month in 2019, the total number of listings remains 22 per cent lower than a year ago.
The relative shortage of properties for sale has helped fuel competition as demand is currently higher than supply.
The demand in the market can be seen in recent property transaction numbers, with 977 houses sold last week and 1,137 houses sold the week before that. The market does seem to be slowing a touch approaching Christmas, but these numbers are higher than the number of transactions recorded pre-pandemic.
Auction clearance rates have remained consistently high throughout 2020, and are a strong indicator of the resilience of the Brisbane market during the COVID-19 pandemic. Auction clearance rates in Brisbane are never as strong as Sydney or Melbourne, however, unlike the southern capitals, COVID-19 has had almost no impact on auction results. There was just one month where clearance rates dipped below the equivalent month in 2019 – and that was August. Otherwise, clearance rates have been consistently higher than 2019, with the last two months, in particular, seeing very strong clearance rates averaging 11-12 per cent higher year on year. The month November recorded the highest average clearance rates of the year, with a 58 per cent clearance rate compared with 49 per cent the previous year. This result was the highest of the year and shows the increasing demand for property in the Brisbane market.
The Queensland State Government budget announced a raft of new spending which will, directly and indirectly, fuel demand in Brisbane’s property markets. This includes new infrastructure spending with the announcement of $6.3 billion in additional spending on initiatives including upgrading the Bruce Highway, Pacific Motorway and Ipswich Highway and funding for the Cross River Rail. Further initiatives include a $70 million build-to-rent program in conjunction with Mirvac and Frasers Property and a $100 million Works for Tradies program over the next two years to deliver social housing through the state.
Infrastructure projects in Brisbane include the Cross River Rail, Brisbane Metro, Brisbane Airport Runway, Herston Quarter redevelopment, Queens Wharf, RNA Showgrounds and Millennium Square redevelopment. These projects will deliver the creation of 1,000s of new jobs during the construction and post-construction phases and provide a boost to the economy of billions of dollars. The Brisbane Airport’s new runway for example is projected to lead to the creation of 7,800 jobs and contribute $5 billion in annual economic benefit to the Brisbane economy. This boost to employment and economic growth will in turn fuel further investment in the property market by increasing demand for both rental properties and homes to purchase.
Given that consumer confidence was at a 7 year high in November and that volume of new housing finance recorded the highest quarterly growth on record, it would seem that buyers and vendors are increasingly confident about Brisbane’s property market.
Commentators have talked up the Brisbane market repeatedly over the past half-decade, and to date, the market has remained relatively flat. However, this time it would appear that the Brisbane market will indeed enjoy a boom – especially for houses. The combination of all-time low interest rates, extensive government incentives, strong inter-state migration, improving consumer confidence, affordability and relatively low supply is fueling the property market in Brisbane and suggest that the city is on the cusp of a property boom for the first time in over 12 years.
Want to learn how to capitalise on once in a lifetime opportunity in the Brisbane market?
CLAIM YOUR FREE STRATEGY SESSION BELOW
MARKET ENTRY REACHES HIGHEST LEVELS SINCE 2009
The Australian property market has emerged as one of the strongest industries throughout COVID-19. In fact, PRD Real Estate Group said that there is evidence of numerous markets performing at their best in 2020, where capital cities have either experienced price growth or remained resilient when compared with 2019.
Further, the Real Estate Institute of Australia’s Housing Affordability Report for September quarter 2020 revealed that market entry has experienced its largest year-on-year increase since 2009, and largest quarterly increase since 2010.
AUSTRALIANS READY TO BUY PROPERTY IN 2021 AFTER RECORD SAVINGS
The housing market will take off in 2021 after a long year plagued by the pandemic-induced recession that saw Australians squirrel away $110 billion in savings, according to experts.
While the coronavirus hit Australian shores hard earlier this year, the health crisis and the economic devastation it brought with it have since steadily improved.
HOUSE PRICES UP OVER THE SEPTEMBER QUARTER
Confidence in the property market is encouraging more people to buy a home as the number of new dwellings increases faster than the population.
Capital city house prices hit record highs, up 4.5 per cent on last year, as low interest rates, increasing jobs and government incentives drive the residential sector.
Prices are up 0.8 per cent for the September quarter to an average of $689,500 according to the latest Australian Bureau of Statistics results.
WHAT HAPPENED TO THE PROPERTY PRICE CRASH THAT WAS PREDICTED BUT NEVER CAME?
At the height of the pandemic, major banking economists sounded the alarm. They warned the coronavirus-induced recession could shave hundreds of thousands of dollars off the value of Sydney and Melbourne homes.
But as the worst of the national COVID-19 restrictions passed, property prices fell only marginally. Forecasters are now tipping values to rise more than 5 per cent in 2021.
MELBOURNE PROPERTY MARKET ON THE ROAD TO A FAST RECOVERY
Melbourne property prices are rising again, and experts on the ground say it’s just the beginning.
Throughout much of 2020, property prices in Victoria have struggled even as property markets in the rest of the country have started to recover from the effects of COVID-19 early in the year. This is unsurprising. Melbourne, Australia’s second largest property market, has endured a much stricter lockdown for much longer than anywhere else in the country.
But now that lockdown restrictions have eased in Melbourne the city’s property market is bouncing back fast.
LOOKING AT AUSTRALIA’S HOUSE PRICES YOU COULD BE FORGIVEN FOR WONDERING ‘WHAT RECESSION?’
The latest house price figures show that while the rest of the economy shuddered to a halt in the first half of this year, the housing market continued on its merry way.
Looking at house prices you could be forgiven for wondering “what recession?”
The latest residential house price index shows that in the September quarter prices grew in every capital city except Melbourne.
They even increased in Perth and Darwin where prices have been falling for five years due to the end of the mining boom. And residential prices in every capital city except Darwin are higher now than they were a year ago. This is the first time since the end of 2014 that has been the case in Perth