The Brisbane property market seems to be the hot topic everywhere you look at the moment. Sometimes, it can be hard to look past the buzz of the media, so we’re here to bring you the facts about what’s happening right now in the Brisbane Property Market in 2021 so far.
From the outset, 2021 had a weight of expectation on it to trump the year just gone, acting as a launchpad for greener pastures ahead, This includes everything from economic recovery, travel and the illusive property market which had a big question mark above it for much of last year. As the media has already made very clear, the market is well and truly living up to that expectation. How?
Let’s start with the hard facts.
Every month, Industry Research provider CoreLogic release an indices report, which provides capital growth measurements across residential housing. The February report states that Australian housing markets rose at the fastest rate they have in 17 years. CoreLogic’s head of research, Tim Lawless says that “the last time we saw a sustained period where every capital city and the rest of state region was rising in value was mid-2009 through to early 2010 withs a post-GFC stimulus fuelled buyer demand.”
Looking closely at Brisbane, the Index results as of February 28, 2021 were:
Change in Dwelling Values
|Month||Quarter||Annual||Total Return||Median Value|
This data notes that Brisbane home values have surged 1.5% higher in the last month. Nationally, prices have risen 2.1% So, Brisbane isn’t experiencing the same steep rise compared to the rest of the country.
Herron Todd White also release a monthly report, identifying the latest movements and trends, including a property clock which aims to place a specific market in a phase at any given time. The February report identified Brisbane houses to be in a Rising Market and Units at the start of recovery, predicting that prices will continue to increase as time goes on.
Source: Herron Todd White
Why is this happening?
As with any market, it comes down to the relationship between supply and demand. At present, demand to purchase properties in Brisbane is high, spurred on by numerous factors including record low mortgage rates, improving economic conditions, government incentives and migration.
The most recent available data from the Australian Bureau of Statistics (ABS) showed that prior to the pandemic, Queensland’s population was increasing by 5423 people per quarter due to interstate migration. During the first three months of 2020, this rose to 6286 and continued its upward trajectory reaching an astounding 6750 in the June quarter of 2020. Agents have been reporting high interstate enquiry for some time now, and this is now very evident.
This is significant because if this trend carries over well into 2021 (and there’s every indication it will), then Brisbane is looking at net interstate migration (NIM) of around 27,000 for the year – a figure not seen since the hot market run in 2003. This rising NIM rate shouldn’t be a surprise given the open economic and social environmentIt’s easy to see why Australians and expats are making Brisbane the city of choice.
This high demand is counteracted by an unusually low supply of advertised properties for sale. CoreLogic’s report showed that the number of properties advertised for sale nationally remained 26.2% below 2020 levels over the 28 days ending February 21. Whilst available supply remains at historically low levels, the quarterly number of home sales in capital cities is up 32%, showing that the low number of properties for sale, are getting bought quickly.
This mismatch between supply and demand is fundamentally behind this dramatic rise in property prices across the state, creating a market that favours sellers and pushes buyers to go to extremes to secure the property they want.
What is all the fuss about auctions about?
Auction is where the action is, because of the aforementioned reasons. Buyers love the transparency of value, as opposed to deals happening behind closed doors, and sellers love that they can truly test the market and maximise the sale price of their home.
As a group, Place have endorsed the Auction method for years and we’re witnessing the best results seen in over a decade. In February, 46 out of 47 Auctions sold, which equates to an incredible 97% clearance rate. On average, there were 7 registered bidders at every Auction. With these figures, it’s not hard to see how this competition is directly correlated with rising property prices.
The Rental Market
The Brisbane rental market has also been interesting to observe. Put simply, rental demand is also stronger than ever.
According to REIQ’s most recent data, the rental vacancy rate in Brisbane is sitting at a tight 2.2%. Across the Place rent rolls, this is 0.28%, an incredible figure, further emphasising the demand to live in Brisbane.
Cathie Crampton, Director of Property Management says that we have come off a market that was previously subdued, and in this post-covid climate, demand is building. “Low interest rates are fuelling buying and keeping stock low, putting pressure into the rental market. Consequently, rent is increasing much like housing prices as tenants are competing for the property they want.
At Place Estate Agents we are committed to helping people find their happy Place. In doing that, we strive to provide accurate and timely data to help you make property decisions and remain up to date. If you would like to keep up to date with all things Brisbane and Real Estate, subscribe to our weekly newsletter below.
Article by Daisy Hicks