"Brisbane's capital city proves its resilience through 2020 as it possesses the key fundamentals for price growth." - Matthew Lapish, Senior Investment Analyst
A global pandemic and COVID-19-related recession have proved no match against the steady reliability of Brisbane’s property market, with new data revealing both house and unit median prices are rising.
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Despite the economic uncertainty of 2020, the latest Domain House Price Report, released Thursday, found Brisbane house prices rose 1.3 per cent over the September quarter to a new median of $714,500.
House prices are also 6.6 per cent higher than they were this time last year when the median was $670,000.
Brisbane’s battered unit market has begun the slow crawl back from a year of price falls, rising 2.2 per cent to $419,000 over the past three months, with low owner-occupier stock and bottomed-out interest rates fuelling the first quarterly price rise in 12 months.
Median house prices, south-east Queensland
Place Kangaroo Point agent Simon Caulfield said within Brisbane, the city’s prestige market was nothing short of skyrocketing, with a lack of stock fuelling a price rise.
“If I had to predict the next six months, I think properties in that $1 million to $2 million price range will see even more price increases,” Mr Caulfield said.
“Those fringe markets will have good growth. In fact, most of our problems right now is that we don’t have enough good quality stock.”
But while the unit price rise has injected much-needed confidence into the struggling apartment market, experts have warned the sector still remains devastatingly divided – with low-cost stock in the city centre suffering price drops of up to 10 per cent due to the absence of international tourism and students.
Domain senior research analyst Dr Nicola Powell said while sluggish construction had fuelled the recovering unit market, cookie-cutter projects and investment-grade units would continue to suffer in months ahead, with owner-occupier apartments expected to enjoy a continued price recovery until the true effects of the pandemic hit home.
“Units in Brisbane really flatlined over the year and there was a lot of negative growth since 2014 so while the Gold Coast and Sunshine Coast are on a different trajectory … they have outperformed Brisbane for some time, and I know the Gold Coast has a lot of unit development and I think it’s the lifestyle lure and it’s that interstate buyer [boosting those markets],” Dr Powell said.
Median unit prices, south-east Queensland
“I also think we haven’t seen the true impacts on COVID-19, and it’s being masked at the moment by financial prop-ups.
“I think it will be a while before we actually see which households are impacted once the mask is removed. Financial strain is on mortgage holidays and then it becomes a question of how we are creating jobs.”
Ray White Brisbane City principal Dean Yesberg said while the inner city’s high-end and three-bedroom-plus unit stock was now in hot demand, the one and two-bedroom apartment market had been decimated. He estimated prices had plummeted by 10 per cent based on what he was seeing.
“The one-bedroom market has been massively affected by the virus … and we are starting to see financial pressure on people – people who have obviously been renting their properties out,” Mr Yesberg said.
“The rental market here is the toughest I’ve seen in 30 years … we are lacking some big things such as international students. And that’s a massive factor for our rental market.
Capital city median house prices
“The Brisbane real estate market is moving in totally different speeds … so while houses are incredibly strong and the upper end is very strong, it’s that inner-city one-bedroom apartment market [that’s suffering].
“And I don’t see anything changing until we get international students back.”
House prices across the Greater Brisbane region, which includes LGAs such as Ipswich, Moreton Bay, Redland and Logan, rose 0.4 per cent over the September quarter to $596,316.
Dr Powell said this was an indication of continued confidence and resilience within the Queensland capital while regional hotspots across the state also enjoyed price growth off the back of a surging tree and sea-changer trend.
“Annually, houses were up 3.7 per cent [in Greater Brisbane] while units were down 6.1 per cent. The median value difference remains one of the largest on record at 55 per cent, slightly lower from last quarter. While this will make the financial leap to purchase a house harder, buyers are paying 2014 prices for a unit,” Dr Powell said.
Houses in the Scenic Rim topped the state for quarterly price growth, rising 5.6 per cent to a median of $533,500, up a whopping 12.9 per cent from this time last year.
Simon Caulfield said Brisbane’s prestige market was firing and that million-dollar homes that normally took eight to nine weeks to sell were now being snapped up in a matter of days, with local buyers particularly keen to swoop on riverfront homes amid severely dwindling stock levels.
He said the opening of state borders would potentially offset the end of financial prop-ups and mortgage holidays.
Across the rest of Queensland, Dr Powell said Gold Coast and Sunshine Coast house price growth not only outperformed Greater Brisbane over the September quarter, but reached new highs with houses on the Gold Coast increasing 0.6 per cent over the quarter to $669,000 and Sunshine Coast houses increased 1.6 per cent to $650,000.
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Webb, S. (2020, October 29).Brisbane's property market holds strong, rises despite COVID-19 recession. Domain.https://www.domain.com.au/news/whats-happening-with-brisbanes-property-market-in-2020-1000403/