"Brisbane's property market remains resilient with strong buyer demand, despite predictions of a decline." - Matthew Lapish, Senior Investment Analyst
Suggestions of Brisbane’s property market demise being imminent may be exaggerated.
Although the knee-jerk reaction to a slowdown in price growth points to a gradual downward trajectory, competition is actually showing signs of intensifying.
The Brisbane property market has continued to show price pressure and steady growth throughout September 2024, despite signs of slowing momentum.
Sales volume trends, which serve as a key indicator of buyer demand, have remained strong in Brisbane.
Over the last 12 months, sales volumes increased by 7.3 per cent, reflecting continued interest in Brisbane’s property market despite broader economic headwinds such as higher interest rates and cost of living pressures.
Listing volumes, on the other hand, tell a different story.
New listings in Brisbane in September were 0.7 per cent lower than in August, and total listings were down 7 per cent month-on-month.
This reduction in supply continues to drive competition among buyers, which is putting upward pressure on prices. Total listings in Brisbane are down 11.9 per cent compared to September 2023, contributing to the ongoing issue of demand consistently exceeding supply in the market.
Brisbane still third fastest growing market
As one of the standout performers among Australian capital cities, Brisbane has demonstrated sustained demand, particularly in the unit market, while the housing sector remains strong but is experiencing a more moderate pace of price increases. This dynamic is largely driven by ongoing supply shortages, coupled with persistent strong buyer demand.
Compared to other capital cities, Brisbane’s performance remains impressive. According to CoreLogic data, Brisbane recorded a 0.9 per cent increase in dwelling values for September, contributing to a quarterly growth rate of 2.7 per cent.
While this is slightly below the 2.9 per cent recorded in August, it reflects a consistent growing market, especially when compared to the national average growth rate of 1.0 per cent for the same period. Annual growth in Brisbane dwelling values is 14.5 per cent, placing the city among the highest performers, with only Perth (24.1 per cent) and Adelaide (14.8 per cent) surpassing it in terms of yearly gains.
Auction activity remains an essential barometer of market sentiment, and the data for September highlights an active but slightly cooling market.
The average auction clearance rate in Brisbane was 58.1 per cent, down slightly from the previous month, while the average number of registered bidders per auction increased to 3.7. Of these bidders, 66.7 per cent were actively participating, reflecting the strong competition for properties.
As auction activity stabilises but the average number of registered bidders rises, it indicates that vendors' expectations may be slightly outpacing the market, or at the very least, their expectations on price are increasing more rapidly than those of buyers.
Property investors active in Queensland
When considering the participation rates of different buyer demographics, investors continue to play a significant role in Queensland’s housing market.
Investors currently make up 38.9 per cent of housing finance commitments, while first-home buyers account for 26.3 per cent.
This investor activity is partly driven by the attractive rental yields available in Brisbane’s unit market, where gross rental yields are currently 4.6 per cent, compared to 3.5 per cent for houses.
These strong gross yields, combined with capital growth potential, make Brisbane a compelling market for investors.
In terms of sales performance, CoreLogic highlights that Brisbane remains the most profitable capital city for property resales, with 99.1 per cent of sales in the June 2024 quarter delivering a nominal gain.
Full Article: Australian Property Investor
Jennison, M. (2024, October 17). Predictions of a Brisbane decline may prove to be premature. Australian Property Investor Magazine. https://www.apimagazine.com.au/news/article/predictions-of-a-brisbane-decline-may-prove-to-be-premature