Brisbane Market Moderates, but Growth and Opportunity Remain

It’s clear that there is broad-based market moderation happening around the nation.

We are starting to see a softening in median prices across both houses and units in the southeast corner.

However, unlike Sydney and Melbourne, where prices started to fall at the start of this year, the market change in the southeast is more of a reaction to the rising interest rate environment, given prices were holding firm until relatively recently.

According to the latest data from CoreLogic, the strong growth in Brisbane over the past year remains significant, with the median dwelling value recording 13.4 per cent growth in the year to September – the second-highest capital city results in the nation behind Adelaide. Regional Queensland also posted a median dwelling value increase of 12.1 per cent over the same period.
At the other end of the spectrum, though, are Sydney and Melbourne, where median dwelling values are six per cent and 3.9 per cent, respectively below what they were at the same time last year.

In Brisbane, solid selling metrics remain, including median days on the market of 28 days and a median vendor discount of 4.3 per cent.

The number of property listings remains the same as last year in Brisbane, contrary to most other capital city markets where prices are falling more quickly.

Rental undersupply

Brisbane has by far and away the strongest rental city market from an investor perspective, with the annual change in rental rates increasing by 13.5 per cent over the year to September – the highest growth of any capital city – according to CoreLogic.

Of course, one of the main reasons for this significant rent increase is that Brisbane and Queensland generally do not have enough rental properties to meet tenant demand.

This is partly due to a large cohort of investors selling their dwellings to homebuyers over the past two years, which has depleted supply significantly.

According to SQM Research, vacancy rates remain at critical lows across the state, with just 2,617 rental properties available to lease in September.

Given that the immigration tap has been turned back on in a big way – plus, we welcome hundreds of new interstate migrants every week – it is unlikely that the rental market will improve for tenants anytime soon.

Market conditions for both sellers and buyers are offering opportunities because A-Grade properties continue to sell well, as well as any offering something unique in terms of location, style, or development opportunity.

Now that the controversial Queensland land tax has been shelved, we are starting to see the return of investors into the market because they recognise the region’s market fundamentals, capital growth, and yield potential across the southeast.

Some property commentators suggest that once inflation is under control, we may see interest rates reduce, which is likely to re-ignite our market.

If you would like to speak to an expert in the Queensland area, contact Adam Empringham