Brisbane Property Market Update December 2024

Melinda Jennison

Brisbane’s property market has continued its resilient performance through December 2024, building on trends outlined in last month’s update. Median dwelling values rising by 0.5% for the month, contributing to a quarterly increase of 1.8% and an impressive 11.2% annual growth. This upward trajectory highlights Brisbane’s sustained appeal, driven by strong demand and ongoing supply constraints, which have shielded the market from broader national declines​​​.

In comparison to other capital cities, Brisbane stands out as a high-performing market. Sydney and Melbourne, the two largest property markets, both recorded monthly declines in December, at -0.6% and -0.7%, respectively. Adelaide (0.6%) and Perth (0.7%) edged ahead of Brisbane (0.5%) in December, yet the deceleration in rate of growth in these two capital cities is more pronounced than it is in Brisbane based on quarterly growth figures. This underscores Brisbane’s ongoing prominence as a preferred destination for buyers and investors alike​​​.

Brisbane’s median dwelling value of $890,746 represents a near 100% increase from $490,000 in 2015, reflecting the city’s transformation over the past nine years into one of Australia’s most dynamic property markets. Sales volumes increased by 5.1% over the last year, whilst total listings, according to SQM Research, have fallen.

 

 

Key drivers of demand include strong interstate migration, sustained employment growth, and infrastructure investment. Forty percent of housing finance commitments in Queensland are from investors, while first-home buyers make up 25.2%. The rental market remains exceptionally tight, with a vacancy rate of just 1%​​​.

Challenges persist, however, with housing affordability continuing to decline across Brisbane. The affordability index, according to HIA was sitting at 54.3 in September 2024, which reflects levels not seen since June 2008, when interest rates were significantly higher at 7.25%. This decline in affordability has been exacerbated by rising interest rates, escalating living costs, and stagnant wage growth, leaving many prospective buyers priced out of the market. Over the past four years, housing affordability has deteriorated by 71%, a stark reminder of the mounting barriers facing both first-home buyers and those looking to upsize or invest​​.

Adding to these pressures, construction activity in Southeast Queensland (SEQ) has failed to keep pace with demand. Dwelling commencements in 2024 fell short of the SEQ Regional Plan targets by more than 12,000 dwellings, marking a significant shortfall in new housing supply. This gap highlights the challenges of meeting the region’s ambitious development goals, particularly as SEQ is projected to grow to almost six million residents by 2046, requiring an additional 900,000 homes to accommodate the influx​​.

The situation is further complicated by soaring construction costs and ongoing labour shortages. High material prices, combined with delays caused by limited trade availability, have increased the cost of building substantially, making many projects financially unviable. These cost pressures have disproportionately impacted medium to large-scale developments, leading to project delays, cancellations, and a preference for smaller or high-value niche projects that can justify the additional expenses​​.

Supply constraints are particularly acute in Brisbane’s inner-city unit market. In 2024, only 1,523 units were completed, which was more than 50% below initial forecasts. Looking ahead to 2025, just 2,691 units are proposed for completion, with nearly 10% of these projects yet to commence construction, making it unlikely that this target will be met. This ongoing shortfall in unit supply, especially in prime locations, is expected to keep upward pressure on prices and rents, further straining affordability for renters and buyers alike​​.

Brisbane Dwelling Values

In December, Brisbane’s median dwelling value increased by 0.5%, following a 0.6% rise in November. Over the quarter, dwelling values rose by 1.3%, while the annual growth of 11.2% firmly established Brisbane as a leading market in Australia. The city has now recorded a remarkable 67.7% growth in dwelling values since the onset of COVID-19​​​.

 

 

Brisbane’s dwelling value growth significantly outpaces the combined capitals’ average of 4.9% for the year. The city’s resilience is further highlighted when compared to Sydney and Melbourne, which experienced annual growth rates of 2.3% and -3.0%, respectively. The quarterly breakdown shows Brisbane trailing Adelaide (2.1%) and Perth (1.9%), but still maintaining solid gains​​​.

The lower quartile of Brisbane’s market continues to outperform, driven by heightened demand from first-home buyers and investors seeking affordability. This trend underscores the shifting preferences of buyers amid worsening affordability across Australia​​.

 

House Prices in Brisbane

Brisbane’s median house values increased by 0.4% in December, according to CoreLogic, bringing the quarterly growth to 1.1%. On an annual basis, house values have risen by 10.2%, positioning Brisbane as the second most expensive capital city in Australia based on median house prices.

However, PropTrack data offers a contrasting perspective, reporting no change (0% growth) in Brisbane’s house values during December. The median house value in Brisbane, according to CoreLogic, now stands at $977,575​​​.

While growth has slowed compared to earlier months, the market remains resilient, with tight supply and sustained demand underpinning house prices. Brisbane’s growth trajectory contrasts with the declines recorded in Sydney, Melbourne and Hobart, further cementing its appeal as a market of choice for both investors and owner-occupiers​​.

Unit prices in Brisbane

Units in Brisbane outperformed houses again in December, with a 0.8% increase in values, maintaining the same price growth momentum experienced in November. Over the quarter, unit values rose by 2%, while the annual increase reached a substantial 16.6%. The median unit price now stands at $680,893, reflecting consistent demand for more affordable and higher-yielding properties compared to houses.

 

However, PropTrack data presents a slightly different perspective, indicating a marginal decline of -0.1% in Brisbane’s unit values during December. This discrepancy between CoreLogic and PropTrack highlights the need for caution when interpreting market data, as variations in methodology or sample sizes can lead to differing results.

The Rental Market In Brisbane

The rental market in Brisbane remains tight, with vacancy rates holding steady at 1%. Gross rental yields for houses and units remain at 3.4% and 4.5%, respectively, highlighting the appeal of Brisbane for investors seeking stable returns​​.

Rent growth has moderated, with annual increases of 3.2% for houses and 3.3% for units, compared to 3.6% for both market segments at the end of November. Despite this slowdown, Brisbane’s rental market remains under significant pressure due to limited supply and strong demand. Affordability continues to be a concern, with rents consuming an increasing share of household incomes​​.

Summary

Looking ahead, Brisbane’s property market is expected to maintain its upward trajectory in 2025, albeit at a more moderated pace. The city’s strong fundamentals—limited supply, high demand, and ongoing migration—are likely to support continued price growth. However, several factors could influence market dynamics.

First, the Federal Election scheduled for 2025 is expected to slow housing activity, consistent with historical patterns during election years. Policy announcements and potential incentives for home buyers may shape buyer and seller behaviour, adding uncertainty to the market​​.

Second, the construction sector faces significant challenges, including high costs and labour shortages. These issues have already resulted in delays and cancellations of projects, with SEQ dwelling commencements falling well short of targets. High construction costs are expected to persist, favouring high-value niche projects over broader developments​​.

Finally, the trajectory of interest rates will play a crucial role. If the Reserve Bank of Australia implements rate cuts as anticipated, borrowing capacity could improve, potentially reigniting buyer demand. However, in the absence of significant changes to interest rates or supply, price growth is likely to remain subdued​​​.

In summary, Brisbane’s property market continues to perform strongly, supported by ongoing strong demand, tight supply, and favourable economic conditions. While the pace of growth has slowed, the city remains a standout performer compared to other capital cities, highlighting its resilience and long-term potential.

Heading into 2025, competition for quality properties, particularly those under $1.5 million, is expected to intensify as the market reopens in January and February.  Over the longer term, Brisbane is well-positioned for steady growth, driven by its strong fundamentals and ongoing appeal to home buyers and investors alike.

We hope that you have found our Brisbane Property Market Update December 2024 helpful.

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Read the Brisbane Property Market Update November 2024