In this July market update, Scott and Melinda Jennison take you inside the Brisbane property market with both on-the-ground insights and the latest data.
They unpack why Brisbane continues to be one of Australia’s top-performing capital cities, reveal the surprising strength of the unit market, and discuss how seasonal trends, housing supply shortages, and potential interest rate cuts could shape the months ahead.
You’ll also hear the latest on construction costs, rental yields, and buyer sentiment all designed to help you make informed property decisions in a shifting market.
This update is essential viewing for anyone serious about buying in Brisbane, whether you’re an investor seeking strong returns or an owner-occupier looking to secure your ideal home in a competitive environment.
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Transcript
[00:00] Scott Jennison: On this episode of the Brisbane Property Podcast, it’s market update time.
[00:03] Melinda Jennison: And find out in this episode why Brisbane is bucking the national trend when it comes to price growth in the unit market and the housing market. We look forward to updating you.
[00:13] Narrator: Welcome to the Brisbane Property Podcast with your hosts, Melinda and Scott Jennison.
[00:18] Scott Jennison: Hi everyone and welcome to another episode of the Brisbane Property Podcast with Scott and Melinda Jennison, and it’s market update time.
[00:25] Melinda Jennison: It sure is, and that means we are going to provide you with a summary of what we’ve been seeing out and about over the last four weeks throughout July. But more importantly, we’re going to provide an overview of what the data is also telling us, so that we can give you a better understanding of what’s actually happening, what direction the market’s moving, why it’s moving that way. And give you some insights into what we’re seeing as buyers’ agents across Brisbane as well.
[00:48] Scott Jennison: What we’re actually seeing is Brisbane’s still performing really well up here and, you know, wintertime, and everyone thinks that things slow down in Brisbane, but it doesn’t slow down, that’s for sure because we’re seeing lots of people out and about. Obviously the demand side of property is really strong, and obviously we’re seeing that in the data as well.
[01:07] Melinda Jennison: Yes. And let’s not forget, towards the end of June and early July, we’ve got school holidays and that does sometimes cause a slowdown in terms of the number of listings that become available for sale. And we certainly saw that again in terms of listing volumes throughout July. They did actually fall slightly compared to June and that’s a seasonal effect, I guess you can say when we do see those school holidays come into play. Sellers really don’t want to be exposing their property to the market when some buyers are not going to be here to participate in market activity. Typically they’ll hold off and they’ll list after the completion of school holidays. Yet again, Brisbane dwelling values have actually moved ahead over the month of July and that’s what we’re going to cover throughout today’s episode.
[01:51] Scott Jennison: I do want to throw a quick hello in too. A client of ours that I spoke to on the weekend, Dev, I just want to reach out and say hello. Thanks for the, it was lovely to have a chat on the weekend and I’m glad you still love listening to us on the podcast. Hey Dev, I hope you’re doing well, and we’ll talk, we’ll be in touch. Quick hello there, but yeah, some of the data…obviously we’ll jump into some numbers a little bit later on, but we obviously dwellings increased 0.7% in July, maintaining some really strong growth, same as June. And that’s obviously the quarter has gone up, a rise of 2.3 up from 2% in the previous month and an annual gain of 7.3%.
[02:34] Melinda Jennison: To unpack that, there’s a lot of numbers in there. Basically, Brisbane continues to be amongst the top-performing capital city markets throughout all of Australia. We are second in our growth rates at the moment, only to Perth and Darwin. Actually, that makes us third, sorry, I can’t even count. That’s on a monthly basis. But over a 12-month period, Brisbane’s market remains one of the strongest, continuing to outpace Sydney and Melbourne, but now also Adelaide. It is interesting. This is all according to CoreLogic data, and we’re going to unpack more about the housing market and the unit market in today’s episode.
[03:10] Scott Jennison: And you’ve got some interesting trends there. Like the unit market saw a gain, as I talked units, 1.1% in July, up from 1% in June, 3.2% over the quarter, and an annual growth of 10.6%. Again, as we’ve talked about it for so many episodes now, the unit market is really performing well and continuing to do so.
[03:31] Melinda Jennison: This is despite the national headlines and the national trend being the complete opposite. And what I mean by that is nationally, looking at national data and many other capital city markets, it’s not the unit market that is outperforming the house market, it’s the opposite. Here in Brisbane, units are outperforming, whether you’re looking at monthly, quarterly or annual data, units are growing at a faster rate. However, in most other capital city markets, and certainly at a national level, it’s the opposite. It’s the houses that are outperforming. This is another reason why it’s really important to understand local market drivers and local market dynamics before making assumptions. If you’re living in Sydney or Melbourne perhaps, and you’re seeing that the unit market is underperforming, do not assume that’s happening here in Brisbane because we are a different property market with different drivers of supply and demand.
[04:19] Scott Jennison: Very, very different. And obviously affordability, and low maintenance. I think they come into play because you can get in closer towards the city and you get those units. And as you say, affordability and low maintenance is something that people are really looking for.
[04:34] Melinda Jennison: That’s right. And that’s shown in the price segmentation data, which we will run through later in this episode. The lowest 25% of property values are still growing at a faster rate of growth than the middle segment of the market or the top end of the market. But remember a lot of first-home buyers are in the more affordable segment of the market. We’ve also got a lot of investors that are buying investment properties at the lower end of the market, and this obviously shifts the demand. Also, in Brisbane, because we do have the stronger performance in the unit and townhouse segment of the market, that also has a shift on total dwelling values when we look at price segmentation, because a lot of those units and townhouses do fall in the bottom 25% of property values. It must be interpreted in a way that makes sense, and that’s what we try to do each month in our podcast updates.
[05:28] Scott Jennison: It’s interesting the next part when we’ve got here about days on market, and how it’s an overall increase from 16 days to 25 days a year ago, 25 days. Whereas the unit market, we’re really seeing in that lower price point, those properties are actually transacting very, very fast. It’s not unusual for some of those properties, and I know some people in other markets might look and go, ‘Really?’ They can’t believe it that a property can be listed literally on a Thursday and it’s sold Saturday afternoon. They’re the sort of properties, it’s not unusual at all in that price point that they’re selling that fast.
[06:07] Melinda Jennison: And I think that’s why it’s important. When we are talking about the data, this is all of Greater Brisbane. What might be happening in a unit in Wilston or a unit in Coorparoo might be very different to what might be happening for a house at Caboolture or a house that might be at Logan Central. It is so important that you understand what is happening in a local market, that’s the market you’re buying into, especially if you are a property investor and you’re wanting to ensure you’ve got that upward pressure on rents, but also to ensure that your property is going to be rented quickly, because you don’t want to purchase an investment property that doesn’t come with a tenant and then have it sitting on the rental market for several weeks without income. Always check the vacancy rate at a local level to get an understanding of what’s trending in that suburb, not just the overall Brisbane vacancy rate.
[07:00] Scott Jennison: And house rents increased by 4.3%, up from 3.4% last month, while unit rent rose 5.6%, up from 5.1% in June.
[07:12] Melinda Jennison: Just to clarify, those statistics are annual rates of change, not monthly rates of change. I don’t think anyone would expect rents to increase that much in a single month. Over the last 12 months, rents in both segments of the market have increased. And in fact, we’re seeing month-on-month that that rental price growth is starting to re-accelerate. That is, the rate of growth is increasing once again. That’s going to put some pressure on some tenants out there. They may be looking to increase the household size if they are struggling with rental repayments.
[07:47] Scott Jennison: Gross rental yields fell slightly from last month. 3.4% for houses, down from 3.5%, and remained steady for units at 4.5% gross rental yields.
[07:59] Melinda Jennison: That’s right. The reason for that is that the house prices are moving at a slightly faster rate than the house rents are moving, and so the yields are, what we call, compressing, they’re getting a little bit lower. Whereas units, we’re finding that unit rents are shifting at a speed that’s relative to the pace of unit prices, and that’s why the yields are holding firm there. Remember, these are gross yields. Any investor that’s considering an investment purchase should be looking at the net yields, which will account for the holding costs associated with holding different asset types. That’s something that our team help our clients with. If you’re unsure of how to do that, make sure you’re getting some professional input.
[08:38] Scott Jennison: A bit of a summary. Apart from units performing really well, nothing to rent and rents going up, construction costs going up.
[08:46] Melinda Jennison: Feels like a broken record, doesn’t it?
[08:47] Scott Jennison: We’re saying the same sort of thing over and over, but that’s just the way it is. We are seeing that increase and we’re seeing the numbers, as I said earlier, the amount of people that are going out, multiple offers, properties selling really fast in certain price points, obviously. But it is something we’re still seeing and that demand side of it is still very, very strong here in Brisbane.
[09:07] Melinda Jennison: Based on current fundamentals across the city, we do expect prices to continue to grow moderately. Certainly not as fast or aggressively as we’ve seen in the last couple of years. However, we also are starting to see that there’s affordability pressures in some areas and for some property types. It’s so important that you’ve got a local lens of what is actually happening out and about on the ground. When we’re turning up to some locations and there’s a lot of buyers that are lining up, versus other locations where there might be a much smaller group of people inspecting properties, there’s a reason for that. And we can use that information to help to educate our clients. And I think if you are a property buyer in Brisbane, you should be out and about and you should be viewing this for yourself because it’s going to take a couple of months for this to trickle through to the data. And therefore, you might be already behind the majority of people who are active in the market and on the ground if you’re going to wait for the data to show any trends.
[10:12] Scott Jennison: We did touch on the interest rates, and as you did say, it’s coming out this week. Not out on the time that we’re recording this, but when this podcast comes out, we’ll know actually what’s happening on that side of things. That will be interesting to see. Obviously, the supply side of it, that would be interesting to see what happens there. Hopefully, construction costs will soften a little bit. It’s definitely tight and listings are low as well.
[10:05] Melinda Jennison: Yes, that’s right. The reason that we do expect interest rates are likely to be cut is that the inflation figures have shown that they are continuing to slow. We’re sitting at 2.1 annually there. But at the same time, consumer confidence has edged up a little bit. That’s a little bit more positive for those looking to buy a home because that also can be an indicator of demand when it comes to assessing that demand rate in property buying.
[11:36] Scott Jennison: That’ll obviously have an effect then on the confidence for buyers to be in the market.
[11:41] Melinda Jennison: Yes, that’s right. That said, we really need to be monitoring not just these things that measure consumer sentiment, but when you’re turning up to an open home and you’re seeing how people are reacting and how the FOMO might be playing out and how many people are actually lining up, that’s real-time consumer sentiment in my opinion and that’s more relevant for the product type and the locations that you’re buying across any city. I think being out and about on the ground is going to trump any data that you might have access to in terms of what’s actually happening and what is the sentiment like out there, because you can see it, you can feel it, you can hear it in the conversations that people are having when they’re attending open homes and auctions.
[12:20] Scott Jennison: I know that obviously there’s, when people talk about time to buy and things like that and and sentiment of people, it is interesting when you talk to people as well. And I think the more people we do talk to realise that the market has moved quite a lot. And yet, I think everyone is still expecting it to continue to grow and to move in that direction as well. I think people are people are starting to realise that and they want to get into the market as well.
[12:46] Melinda Jennison: That’s right. We’ll just run through some of the data from CoreLogic for the month of July, starting with dwelling values. Remembering dwellings will combine all property data. These are usually the headline reports that come out at the beginning of each month stating what direction each market has moved in terms of house prices. But dwellings will incorporate both houses, units and townhouses. Here in Brisbane, across the month of July, 0.7% price growth for the month, 2.3% for the quarter, and that puts annual growth for all dwellings at 7.3%.
[13:20] Scott Jennison: The median price for all dwellings, $934,623.
[13:26] Melinda Jennison: And we talked a lot about the price segmentation a little earlier. Right now, the lowest 25% of property values here in Brisbane have shown 2.7% quarterly growth up to the end of June, whereas the top 25% of property values have only moved 1.7% across the same period of time, with the middle segment of the market somewhere in between at 2% growth. Again, that more affordable segment of the market, which does actually comprise more of that unit and townhouse type of product, that’s actually growing at a faster rate when we’re grouping all dwellings together.
[14:00] Scott Jennison: And PropTrack recorded a 0.44 gain in July as well. That’s for dwellings.
[14:05] Melinda Jennison: 0.44% gain, correct. Yes, that’s right. And there’s differences in methodologies we’ve talked about this previously in our podcast and that does account for some of the variation. But the trend is the same in that property values are still increasing month-on-month.
[14:20] Scott Jennison: We’ll break it down now into house and unit values. House values have increased 0.7% in July, identical to June’s growth rate. Median house prices in Brisbane reached $1,019,865.
[14:38] Melinda Jennison: Yes, that’s right. Quarterly growth in houses, 2.1%. Annual growth in houses, 6.7%. A really big change in when we run through the unit values, you’ll see how much the unit market has outperformed the housing market. That is really relevant. We do have the same positive price growth trend from the PropTrack data also. It shows that houses increased 0.44% during July. Again, that’s a re-acceleration in terms of price growth compared to June. That’s something that is important to understand. We’re not slowing down. The rate of growth is picking up again, although very moderately, there’s definitely been an uptick again throughout July.
[15:26] Scott Jennison: And unit market, as we’ve talked about so many times now, the unit market, really a standout performer, recording a 1.1% gain in July. That’s an improvement from June’s 1%. The median unit value now stands at $727,110.
[15:42] Melinda Jennison: Yes, that’s a lot of money for a unit here in Brisbane. And only four or five years ago, you could still buy most units under $500,000, so it has been a big shift in the market. Remember, a lot of those first-home buyer incentives do cut out at $700,000 as well. Even units in some areas across Brisbane are now becoming less affordable for those first-home buyers, especially those wanting to tap into the grants that are available. When we look at the quarterly growth rate for units, 3.2%, remembering that the housing quarterly growth rate in Brisbane, 2.1%, and annually units have shifted 10.6% compared to the annual growth in the housing market at 6.7%. It’s quite a significant difference between the two markets. Is this likely to continue? No one has a crystal ball and I’m not going to speculate. However, we need to look at the supply of potentially competing product in both the unit market and the housing market to understand whether we have the potential to absorb the demand that is there because at the moment, the demand is so much higher than the potential for supply and that’s why we’re seeing that price escalation. I’ll also say that the cost to deliver housing, whether that’s a single dwelling or a unit or a townhouse in the current market, the price differential between existing and brand new is still so wide that we feel that there’s still got to be further growth in the established market before we actually see a lot of new product coming through, simply because developers cannot build and sell for the price that they need to sell for to lock in development margins and actually pay for the cost of the construction. We’re in a very interesting era in Brisbane property simply because of those underlying fundamentals.
[17:49] Scott Jennison: If I just jump back quickly, PropTrack on units also had a rise of 0.45% in July as well, just so you know that. The rental market, it sounds like a bit of a broken record sometimes, doesn’t it? When you’re talking about them, it really is tight. Vacancy rates holding at 0.9% for the second consecutive month.
[18:10] Melinda Jennison: Yes, that’s right. What’s interesting is that in the last few weeks, I have been doing some suburb-level analysis on vacancy rates, and it is evident that in some areas of Brisbane, we’re starting to see vacancy rates elevated above 3%. When we talk about the 0.9% vacancy rate citywide, this is not everywhere. It’s so important that you understand what is happening in a local market, that’s the market you’re buying into, especially if you are a property investor and you’re wanting to ensure you’ve got that upward pressure on rents, but also to ensure that your property is going to be rented quickly, because you don’t want to purchase an investment property that doesn’t come with a tenant and then have it sitting on the rental market for several weeks without income. Always check the vacancy rate at a local level to get an understanding of what’s trending in that suburb, not just the overall Brisbane vacancy rate.
[19:00] Scott Jennison: And house rents increased by 4.3%, up from 3.4% last month, while unit rent rose 5.6%, up from 5.1% in June.
[19:12] Melinda Jennison: Just to clarify, those statistics are annual rates of change, not monthly rates of change. I don’t think anyone would expect rents to increase that much in a single month. Over the last 12 months, rents in both segments of the market have increased. And in fact, we’re seeing month-on-month that that rental price growth is starting to re-accelerate. That is, the rate of growth is increasing once again. That’s going to put some pressure on some tenants out there. They may be looking to increase the household size if they are struggling with rental repayments.
[19:47] Scott Jennison: Gross rental yields fell slightly from last month. 3.4% for houses, down from 3.5%, and remained steady for units at 4.5% gross rental yields.
[19:58] Melinda Jennison: That’s right. And the reason for that is that the house prices are moving at a slightly faster rate than the house rents are moving, and so the yields are, what we call, compressing, they’re getting a little bit lower. Whereas units, we’re finding that unit rents are shifting at a speed that’s relative to the pace of unit prices, and that’s why the yields are holding firm there. Remember, these are gross yields. Any investor that’s considering an investment purchase should be looking at the net yields, which will account for the holding costs associated with holding different asset types. That’s something that our team help our clients with. If you’re unsure of how to do that, make sure you’re getting some professional input.
[20:38] Scott Jennison: A bit of a summary. Apart from units performing really well, nothing to rent and rents going up, construction costs going up.
[20:46] Melinda Jennison: Feels like a broken record, doesn’t it?
[20:47] Scott Jennison: We’re saying the same sort of thing over and over, but that’s just the way it is. We are seeing that increase and we’re seeing the numbers, as I said earlier, the amount of people that are going out, multiple offers, properties selling really fast in certain price points, obviously. But it is something we’re still seeing and that demand side of it is still very, very strong here in Brisbane.
[21:07] Melinda Jennison: Based on current fundamentals across the city, we do expect prices to continue to grow moderately. Certainly not as fast or aggressively as we’ve seen in the last couple of years. However, we also are starting to see that there’s affordability pressures in some areas and for some property types. It’s so important that you’ve got a local lens of what is actually happening out and about on the ground. When we’re turning up to some locations and there’s a lot of buyers that are lining up, versus other locations where there might be a much smaller group of people inspecting properties, there’s a reason for that. And we can use that information to help to educate our clients. And I think if you are a property buyer in Brisbane, you should be out and about and you should be viewing this for yourself because it’s going to take a couple of months for this to trickle through to the data. And therefore, you might be already behind the majority of people who are active in the market and on the ground if you’re going to wait for the data to show any trends.
[22:12] Scott Jennison: Perfect. Market update done. Thank you very much. And thanks for listening. As usual, I will let Melinda wrap things up. We’ve got more exciting episodes coming and guests, so keep an eye out for what’s coming up on the Brisbane Property Podcast. As usual, I’ll let Melinda wrap it up. And thanks very much for listening, and bye for now.
[22:31] Melinda Jennison: Yes, thank you once again for joining us on the Brisbane Property Podcast. We hope you have enjoyed this month’s July property market update. As always, if you have enjoyed our content, please share with friends and family. We would love for you to leave us a review on your favourite podcast player as well. It does help others to find our podcast and benefit from the information that we share as well. As always, we look forward to speaking with you again next week, and until then, bye for now.