Brisbane property market update February 2024
Melinda Jennison
Brisbane Property Market Update: February Sees Continued Growth Amid Low Supply Levels
February demonstrated another month of positive price growth for Brisbane across the housing and unit markets combined. This marks the twelfth consecutive month of positive price growth across both segments of the market in Brisbane with houses up 15.7% and units up 14.8% over this period of time. It’s certainly been a significant shift in values, second only behind Perth in terms of market growth performance across all capital cities throughout Australia.
Brisbane continues to outperform the national average for growth on an annual, quarterly and monthly basis, signifying the strong fundamentals that remain in place throughout the city. Brisbane also remains one of the top three performing capital city markets throughout the country across the same recorded time periods.
Whilst the month-on-month growth is still positive, the rate of this price escalation in Brisbane continues to ease, although very slightly. This is different to what was observed in other markets around Australia with the broader national Home Value Index (HVI) by CoreLogic recording an acceleration of growth during February compared to the Brisbane Property Market Update January 2024.
Part of the reason for the continued upward price pressure in Brisbane is due to low listing volumes throughout the city, relative to the long-term average. Currently, Brisbane buyers have about 40% fewer properties that are listed online and available for sale to choose from, compared to the long-term average. Additionally, compared to 12 months ago, total listings in Brisbane throughout February were down 15.7%, according to SQM Research.
Source: SQM Research
On a more positive note, newer listings were 7.6% higher throughout February compared to the same time last year, and there was a strong increase in new property listings for buyers to consider, compared to January. This is not a surprise given many sellers choose not to list their properties too early at the beginning of a new year, but instead prefer to wait until school holidays have concluded and the majority of people are back into the normal routine of the year.
Apollo Auctions data revealed an average auction clearance rate of 65.85% in Brisbane with an average of 4 registered bidders per auction, which was a big jump from January figures which revealed an average of 2.9 registered bidders per auction. The number of registered bidders who actively participated in each auction throughout February was 56.03%, down from 70.5% in January.
Brisbane Dwelling Values
Dwelling values increased 0.9% in Brisbane throughout February. The quarterly change has been 2.9% which is progressively slowing with a quarterly growth rate of 3.2% recorded at the end of January 2024, and 3.7% at the end of December 2023. So, whilst property values across the city are still increasing month-on-month, the rate of growth is decelerating throughout Brisbane.
For the first time in history, the median value of a dwelling in Greater Brisbane has surpassed the $800,000 mark. It is currently $805,593 which is $8,775 more than last month and $26,323 more than 3 months ago.
Source: Corelogic
The current median value of a dwelling in Brisbane is the third highest out of all capital city markets throughout Australia. It’s now higher than the national average median dwelling value as well. Despite this, the median values for both houses and units throughout Brisbane remain lower than those in Sydney, Canberra, and Melbourne. It’s what makes up the dwellings data within each capital city that continues to contribute to this bias in the data.
The segmentation of dwelling value growth in Brisbane shows that the top end of the market has slowed down, with the bottom end of the market now growing at a faster rate than other segments.
Properties that make up the lowest 25% of dwelling values have grown 4% over the 3 months to 31st January, down from 4.2% over the 3 months to the end of December. The middle 50% of property values are now tracking at a quarterly change of 3.4%, down from 3.7% the month prior. And the top 25% of property values have grown 2.8% over the last quarter, compared to 3.5% one month ago. It is clear based on this data that the price deceleration is happening at a faster rate amongst the more expensive properties throughout Brisbane.
As the unit market continues to show strength and outperform the housing market in terms of price growth, it’s important to recognise the contribution that units would be making the lowest 25% of dwelling value growth throughout the city.
PropTrack dwellings data also confirms that Brisbane experienced positive growth throughout February 2024, again confirming performance exceeded the national and capital city average. This is the first month that PropTrack data has shown Brisbane dwelling values have reached the same level as Melbourne dwelling values. Both capital cities have now recorded a median dwelling value of $797,000, being above the national average, despite both house values and unit values in Brisbane remaining lower than in Melbourne according to PropTrack.
Source: Proptrack
House Prices in Brisbane
The median house price in Brisbane increased a further 0.9% in February, down slightly from last month when house price growth was 1%. Over the last 3 months house prices have grown 2.8%, confirming that the rate of growth across the Brisbane housing market is slowing because last month this was 3.2% and the month prior the quarter growth was tracking at 3.8%.
The median house price in Brisbane is now $899,474 which is $10,846 more than last month and $28,948 more than three months ago. Brisbane is the fourth most expensive capital city market based on house values behind Sydney, Canberra and Melbourne.
Source: CoreLogic
Proptrack data also confirmed house prices in Brisbane showed positive growth throughout February, again outperforming both the national and capital city average on a monthly and annual basis.
Source: Proptrack
Unit prices in Brisbane
Median unit values in Brisbane increased 1% in February. Quarterly growth for units in Brisbane is accelerating once again with a 3.6% increase over the last 3 months. This was trending at a quarterly growth rate of 3.2% last month and 3.3% the month prior.
The median value of a unit in Greater Brisbane is now $576,359 which is $7,764 more than last month and $24,027 more than three months ago. This segment of the market has again started to outperform the housing market in Brisbane based on the CoreLogic data. Brisbane is the fourth most expensive capital city markets for buying a unit in Australia, raking behind Sydney, Canberra, and Melbourne in median unit values.
Source: CoreLogic
Proptrack data also confirms the same trend for unit growth in Brisbane and also shows that Brisbane’s unit growth performance is better than the national and capital city average on both a monthly and annual basis.
Source: CoreLogic
The Rental Market In Brisbane
Rental market conditions in Brisbane tightened again with a reduction in vacancy rates from 1.2% in December, to 1.% in January, according to SQM Research. House rents increased 7.5% in Brisbane over the last 12 months which is up slightly from January where house rents were up 6.8% over the same period. Unit rents are up 12.3% over the 12 months until February, which is a minor reduction from 12.6% growth over the year up to the end of January. Gross yields have eased slightly to 3.6% for Brisbane houses, down slightly from 3.7% last month, and 5.1% for Brisbane units which is unchanged from last month.
Source: CoreLogic
Summary
The market demand is still strong across many parts of the city, but buyers are becoming more cautious in relation to price. This is evident as the rate of price growth has been easing for several months.
There is a lot of frustration and confusion about the value of properties throughout Brisbane due to the rapid rise in property prices over the last twelve months. Many buyers are feeling fatigued as they continue to miss out due to the level of competition in the market.
Whilst prices are still rising, it is expected that the rate of price growth will continue to ease in the months ahead. It is likely that any cut to official interest rates this year may reignite buyer demand as this will deliver a boost to borrowing capacity. With Brisbane property prices growing at a faster rate than the other larger capital city markets across Australia over the last 12 months, affordability will become a challenge for some buyers through the city, especially in areas where household incomes are more stretched.
With the underlying fundamentals of low supply and high demand still representative of the current Brisbane market, the upward pressure on price is expected to continue.
Thank you for reading our Brisbane property market update February 2024!
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