Brisbane property market update November 2023
Brisbane continues to outperform the national average in terms of property price growth. At a national level, markets experienced the smallest monthly gain since the growth cycle commenced in February, however Brisbane’s market showed continued resilience and the monthly growth remains more robust.
Brisbane experienced median value price falls of -8.9 per cent in the previous cycle from its peak in June 2022 to the trough in February 2023, and since then the growth in median values has been 12.2 per cent, according to CoreLogic data. This demonstrates a clear V-shaped recovery for Brisbane property values.
In contrast, several other cities such as Melbourne, Hobart and Darwin saw negative growth throughout the month, with Sydney also displaying relatively stagnant performance. Brisbane, however, emerged as one of the top performers, joining the ranks of Perth and Adelaide. This may be attributed to the notably low levels of advertised supply, coinciding with sustained elevated purchasing activity, surpassing average levels.
So far, the rate hike on Melbourne Cup Day seems to have had little effect on the Brisbane market. However, only time will reveal whether this change puts pressure on some buyers. Additional factors like declining affordability and consistently low consumer sentiment are also posing challenges. However, at this point, they seem to be having a greater impact on the less affordable markets which also have higher listings, giving buyers more options.
In Brisbane, new listings saw a slight increase of +3.2 per cent from October to November 2023, as reported by SQM. Meanwhile, overall listing volumes remained relatively steady, experiencing a modest month-on-month increase of just 0.56 per cent, which is still more than 30 per cent below the long-term trend. While this briefly sparked interest among buyers, it fell short of meeting the high demand, as most properties continued to sell with multiple offers or multiple registered bidders at auctions.
As per data from Apollo Auctions, the average count of registered bidders rose from 3.4 per auction in October to 3.67 per auction in November. Clearance rates stayed consistent at 63.25 per cent, while the number of active bidders experienced a slight decline from 62.53 per cent to 58.15 per cent.
Dwelling values in Brisbane
Dwelling values across Brisbane increased 1.3 per cent throughout November according to CoreLogic, second only behind Perth in terms of monthly price growth. On a quarterly basis, Brisbane has experienced 3.9 per cent dwelling price growth. Annual growth is now sitting at 10.7 per cent. The median price for a Dwelling in Greater Brisbane is now $779,270, which is $8,695 more than one month ago.
Source: CoreLogic
PropTrack data also demonstrated positive dwelling price growth for the month in Brisbane, with annual growth performance in Brisbane exceeding both the national and capital city averages.
Source: PropTrack
Slightly stronger growth is evident in the lowest 25 per cent of dwelling values in Greater Brisbane, with the middle segment and the top 25 per cent of the market not trailing far behind. It’s crucial to emphasise that the lower 25 per cent of the market encompasses a majority of the city’s unit stock, primarily due to the price point. The unit market in premium locations throughout the city is robust, often drawing 20–30 offers for well-located and affordable options, showcasing high buyer demand.
Source: CoreLogic
House price growth Brisbane
For the last three consecutive months, house price growth in Brisbane has remained consistent at around 1.4 per cent per month, according to CoreLogic. Brisbane has experienced strong year to date performance with 12.1 per cent growth in that time period, putting the current median value at $870,526, which is $10,061 more than last month.
Source: CoreLogic
PropTrack data confirms the same pattern, showing that annual house price growth in Brisbane is also surpassing both the national and capital city averages.
Source: PropTrack
Unit prices in Brisbane
Unit values in Brisbane have continued to escalate throughout November, with a further 1 per cent growth throughout the month recorded by CoreLogic. It’s noteworthy that unit price growth in Brisbane, on an annual basis, is still stronger than house price growth based on CoreLogic data. This is despite the magnitude of unit price growth being less than house price growth since July this year.
The median value of a unit in Greater Brisbane is now $552,332, which is $6,977 more than one month ago.
Source: CoreLogic
PropTrack data affirms that unit growth in Brisbane has surpassed the average for other capital city markets across Australia, as well as the national average. However, it’s worth noting that the monthly reported change from PropTrack contrasts with that reported by CoreLogic.
Source: PropTrack
Brisbane rental market
Rental vacancy rates across Brisbane tightened again between September and October, according to SQM Research. They retracted from 1 per cent to 0.9 per cent, evidence of very few rental properties becoming available across the city.
Growth in rents for Brisbane houses has slowed down to an annual rent growth rate of 6.6 per cent. With annual house prices now at 10.6 per cent, according to CoreLogic, rents are rising at a slower pace than home values, which will be compressing gross rental yields across the city. Gross yields for houses are currently sitting at 3.7 per cent for Brisbane.
The opposite is true for unit rents where the annual change in rents has been 13.2 per cent, whereas the annual change in unit prices has been 11.3 per cent. This means gross rental yields for units across Brisbane will still be rising. They are currently sitting at 5.2 per cent.
Source: CoreLogic
Summary
While the national housing market undergoes a shift marked by a new inflection point, the property market in Brisbane remains relatively robust. It’s important not to overlook the downside risks, with interest rates considerably higher now than 18 months ago, affecting affordability, and consumer sentiment still at an extremely low level. What distinguishes Brisbane, along with other markets like Perth and Adelaide that are demonstrating consistent monthly price growth, is the fact that our listing volumes remain consistently low.
As we head into the last few weeks of 2023, it is a great time to reflect on how quickly property markets can turn and why timing the market can be a hard approach to adopt. Twelve months ago, as Brisbane prices were falling month-on-month, and there was a lot of fear and uncertainty among both buyers and sellers. Fast forward to today, and those who followed Warren Buffet’s theory of “be greedy when others are fearful” have been greatly rewarded.
As we approach Christmas, listings are anticipated to decline, and buyers are likely to become less active as they gear up for the festive season. The upcoming month is expected to be quieter across all segments of the market. However, 2024 is shaping up to be another exciting year for Brisbane. Let’s see what the Brisbane property market has in store!
Melinda Jennison, Streamline Property Buyers, and president at REBAA.
