Our Housing Market
According to Domain, Greater Brisbane house prices have remained steady over the past decade providing owner-occupiers and investors with consistent results. The median price for a house in Brisbane increased by 1.3% in the final quarter of 2019, this is the biggest quarterly movement in two years, pushing the median value for the quarter to a new high of $577,664. House prices in Brisbane are relatively affordable, but if you are shopping in the blue chip suburbs, expect to pay a lot more.
“The Brisbane housing market is rebounding after the softer start to 2019” – Domain economist Trent Wiltshire.
Despite a weaker Queensland economy and supply being high which has dampened the market in the past year showing negative growth across many inner Brisbane suburbs, the last quarter of 2019 shows renewed activity at open homes and an increase in the number of offers being received.
The auction clearance rate has remained below 50% for most of 2019, but another expected rate cut in February should reignite the fire with bidders in the market.
The lending space has constant changes occurring, leaving buyers in the dark about whether they can obtain a loan and buy a property. Preapprovals can be reneged by a lender if their policy changes even inside their preapproval period.
We always recommend using a finance broker, especially one that has been referred by an agent or friend who you can rely on to help navigate getting your loan in place and getting the right loan for your circumstances.
“With credit conditions easing and interest rates falling, improving affordability will be a catalyst for raising price growth as stronger economic growth returns and the market moves into a rising deficiency.”
Units continue to underperform, with prices weakening year on year in 2018 & 2019. Since the peak in mid-2016, values have dropped on average 8.7 per cent.
The oversupply of developments in Brisbane has created the overall dampening of this market. Units are definitely still in a buyers’ market, providing a fantastic opportunity to purchase with prices at an almost six-year low. Approvals for new projects going under construction are continually reducing from the 2016 peak, meaning the excess supply will eventually be absorbed by the rising demand.
The state government’s infrastructure planning strategy will provide Brisbane an economic boost over a number of years. It will help to drive job creation and subsequent population growth, which means the demand for housing will continue. Brisbane has been benefiting from a rebound in owner occupiers utilising lower mortgage rates. Investors are also likely to continue to be drawn to Brisbane due to the affordability and higher rental yields compared to other east coast cities, as well as the potential to capitalise on suburbs that will benefit from the improved connectivity.
Rents decreased a couple of years ago and are yet to make a full recovery.
Vacancy rates still remain very low, however your Property Manager should consider the peak rental seasons when signing a new lease agreement on your investment property. A lease that ends at a time where there are few tenants on the hunt may mean higher vacancy and lower rent. If you are looking for a property manager or thinking about changing managing agents check out our team here.
Brisbane property predictions
Coming into 2020, the forecast is positive amongst property analysts with Brisbane’s median house price predicted to increase by as much as 20% in the next two years.
It has also been predicted by multiple sources that Brisbane will outgrow other capital cities quite heavily and is a great place to invest in the property market. However the BIS Oxford Economics property forecast projects Brisbane will see the greatest national gains in house prices, but not for another couple of years as the remaining oversupply is consumed.
The annual median house price is expected to increase from $552,000 to $665,000 in Brisbane. This percentage rise is the highest predicted for the capital cities nationally, well ahead of Sydney at 6 per cent and Melbourne at 7 per cent.
As mentioned previously, the unit supply is still high and according to reports, while the economy remains slow any price rises will be “modest” over the next 12 months before prices are predicted to jump in 2021-22.
The top 10 Brisbane suburbs for median house price growth
|Fig Tree Pocket||$1,150,000||30.2%|
* Source: Domain House Price Report, December 2019 quarter. Figures based on year-on-year growth.
Data compilation and narrative by Karen McBryde LREA.
Karen is a Lead Agent for Place Estate Agents in Brisbane.