Brisbane Property Market Update - October 2024

Recent data from CoreLogic highlights that Brisbane’s median dwelling values rose by 0.7% in October, bringing the quarterly increase to 2.4% and the annual growth to 13.0%. Brisbane has outperformed larger capitals, with other cities such as Sydney and Melbourne experiencing either slight declines or more modest increases. Over the last 30 years, Brisbane house values have surged by an impressive 454.8%, with nearly 98% of that growth occurring in the past decade alone​.

Source: CoreLogic

Supporting demand are Queensland’s strong population growth and employment figures, with a 2.68% rise in population and a 4.6% increase in jobs year-on-year, according to the CommSec State of the States report. This influx has driven consistent demand, particularly in Brisbane’s more affordable segments, attracting both investors and first-home buyers. Investor activity continues to climb, with 40.5% of Queensland’s housing finance commitments attributed to investors, and 27.5% from first-home buyers​. These cohorts make up the largest portion of property buyers across the State, which is one of the reasons why the more affordable end of the market is currently outperforming.

Based on the PropTrack Housing Affordability Index, Queensland’s score indicates relatively high affordability compared to states like New South Wales and Victoria. This affordability is a key factor driving continued interest and demand from buyers, as more individuals and families are drawn to the Sunshine State for its combination of lifestyle and comparatively accessible property prices.

Brisbane’s median values are higher than those in other capital cities, except Sydney, and therefore the appeal lies in the size and quality of property that a given budget can secure. Buyers can often find better value for money in Brisbane compared to markets where median values may be lower but offer less in terms of property size and quality. This combination of relative affordability and value continues to make Brisbane an attractive choice for those entering the property market.

Listing trends, reflect Brisbane’s ongoing supply shortage. While new listings rose 1% from September, total listings in October were still 4.2% lower than the previous year, underscoring the limited supply. Annual dwelling commencements are also down 18.2% compared to the decade average, contributing to a restricted flow of new properties to the market​.

Auction clearance rates provide further insight into demand. Brisbane’s October clearance rate stood at 60.1%, while registered bidders averaged 2.7 per auction, with 68.3% actively bidding. Auction clearance rates provide further insight into demand. Brisbane’s October clearance rate stood at 60.1%, while registered bidders averaged 2.7 per auction, with 68.3% actively bidding. Compared to September, this represents a decline in the number of bidders per auction and yet the clearance rate was slightly higher month-on-month, reflecting an active market but slightly cooling buyer depth​.

Brisbane Dwelling Values

Brisbane’s dwelling values continued to climb, with a 0.7% increase in October, following a 0.9% rise in September. This quarterly growth of 2.4% aligns Brisbane as one of the top-performing capital cities in Australia, alongside Perth and Adelaide, which saw larger quarterly increases of 4.1% and 3.7%, respectively​. Brisbane’s annual growth of 13.0% highlights its strength in comparison to other capitals like Melbourne, which recorded a decline of 1.9% over the same period​.

Source: CoreLogic

The breakdown by segment reveals that Brisbane’s most affordable properties continue to experience the highest demand and value growth, with 4.5% price movement in the lowest 25% of property values in the 3 months to September 2024, as affordability pressures shift more buyers to this market segment. Comparatively, the higher end of the market showed slower growth, with 2.1% growth in the top 25% of property values in Brisbane over the same period, underscoring the broader trend of value-driven interest in Brisbane’s property landscape​.

Brisbane House Values

House values in Brisbane saw a steady increase of 0.7% in October, maintaining a quarterly gain of 2.1%. While this is a slight deceleration from the previous month’s 0.8% gain, Brisbane’s housing market continues to outpace larger capitals like Sydney and Melbourne. Brisbane’s median house price now stands at $974,025, representing a significant rise of 11.9% over the past 12 months​.

Source: CoreLogic

Brisbane Unit Values

The Brisbane unit market remains stronger than the house market, recording a 1.0% increase in October, bringing the quarterly growth to an impressive 3.5%. Year-on-year, unit prices have risen by 18.8%, making them an attractive alternative to houses for both first-time buyers and investors seeking affordability and strong gross rental yields.

Source: CoreLogic

The median unit price in Brisbane now sits at $669,254, appealing to investors who benefit from the current gross yield of 4.5% in the unit sector. Brisbane’s unit market performance remains a key area of growth, reflecting increasing demand in well-located, inner-city areas.

Brisbane’s Rental Market

Brisbane’s rental market continues to reflect high demand and limited supply, with vacancy rates steady at 1.1%. However, rent growth has started to decelerate, with house rents showing a 4.4% annual increase, down from 5.4% in September. Unit rents recorded a slight dip, decreasing by 0.3% over the three months ending October.

Source: CoreLogic

Gross yields currently stand at 3.5% for houses and 4.5% for units, highlighting the higher rental returns associated with Brisbane’s unit market. Despite the slowing rental growth, Brisbane’s tight rental market suggests that vacancy rates will remain low, and demand is likely to keep rents stable in the short to medium term​.

Summary

In summary, Brisbane’s property market continues to perform strongly, bolstered by consistent demand, restricted supply, and attractive returns, particularly in the unit segment. The October data points to a slight cooling in momentum again; however, Brisbane’s fundamentals remain solid. Factors such as strong population and job growth, combined with constrained listings and limited new supply, continue to drive demand across the housing and unit markets.

Looking forward, Brisbane’s supply-demand imbalance and the expectation of an interest rate cut in early 2025 may further bolster market activity. Additionally, reports from agents indicate some listings may be postponed until the new year, anticipating a rise in buyer interest with potential rate cuts. With a new State Liberal government in Queensland, significant legislative changes are unlikely, providing further market stability​.

Overall, Brisbane’s real estate market remains well-positioned for continued growth, albeit at a moderated pace, as it navigates evolving economic conditions. This ongoing environment of low supply and sustained demand reinforces Brisbane’s standing as a stable, high-potential market for both long-term investors and homebuyers.

Melinda Jennison is the managing director of Streamline Property Buyers