What has been happening to the Property Market in Brisbane in July 2020?
This is the question that a lot of people ask when we first speak. There is so much variation in what is going on around Australia. We know, it is hard to keep up with information that is relevant to a specific region.
That’s how we can help! We not only look at the data, but we also understand what is going on by being “on the ground.” We can assess real-time demand around certain suburbs.
How do we do this?
We can monitor how many people are attending open homes in Brisbane.
We find out how many people are putting in offers for a property that is listed for sale.
AND, we see how many people are attending and bidding at auction in several suburbs around our city.
Let’s take a look at some the data and some of our real time observations, to summaries what is happening in the Brisbane housing market and also the Brisbane unit market right now.
Brisbane Property Market Prices
According to the latest Hedonic Home Value Index data by Corelogic, dwelling values in Brisbane saw a -0.4% decline in value over the month of July 2020.
In a recent announcement, Corelogic’s Head of Research, Tim Lawless, made the following statement:
“Record low interest rates, government support and loan repayment holidays for distressed borrowers have helped to insulate the housing market from a more significant downturn. Advertised supply levels have remained tight, with the total number of properties for sale falling a further 4.3% in the 4 weeks to July 27th , sitting 15.2% below where they were this time last year. Additionally, increased demand driven by housing specific incentives from both federal and state governments, especially for first home buyers, have become more substantial.”
In the Brisbane Housing Market, we saw median values for the greater Brisbane region fall -0.3% across the month of July 2020. The current median value for a Brisbane house is now $555,284.
The Unit Market in Brisbane saw a slightly higher median value decline of -0.5% for the month of July 2020. The current unit price in Brisbane is now $384,681.
What is happening in the Rental market in Brisbane?
At a city level, the rental market in Brisbane has definitely recovered, although there are still some at risk markets around our city. For an in-depth review of the current state of the rental market the Brisbane Property Podcast provides a comprehensive review. Click HERE to access.
In short, the vacancy rate in many locations is trending down and is very tight. The areas where this trend is not happening are in the Brisbane CBD and locations immediately surrounding this and also in areas where there are a lot of higher density unit developments. In these locations, vacancy is still a big problem. Therefore these markets remain high risk.
Asking rents according to SQM Research across the city have also been trending higher, so this is also reassuring for property investors.
That said, Brisbane is not one property market and caution definitely needs to be taken when looking at a postcode level. You will see in the Brisbane CBD, for example, the situation is VERY different.
What are we seeing on the ground across Brisbane?
In our opinion, the data above may be slightly misleading based on our on-the-ground observations. Despite the overall median data trend showing very slight falls in house values, we are in fact seeing quality housing in very high demand. Some open homes we have attended over the month of July have seen more than 30-40 groups through. This illustrates that buyers are still very active in the Brisbane property market.
Advertised properties that are listed for sale in desirable locations are being sold very quickly in Brisbane. Often the sale is a result of multiple offers being submitted on the property. If listed for sale by auction, they are achieving high prices with multiple registered bidders.
There are markets within markets and we are seeing strong prices being paid for quality properties in many regions around our City. In the most recent Herron Todd White Month in Review it states:
“The Coronavirus crisis has not resulted in a measurable fall in property prices across the Brisbane market generally and $700,000 is a solid value band. As such, don’t expect to score a bargain due to the pandemic. A lack of listings means buyer choice is limited. In addition, many properties are trading off-market.”
How does the Brisbane Property Market compare to other Capital Cities around Australia?
Melbourne and Sydney are leading the decline in capital city values. Melbourne recorded a -1.2% fall in dwelling values across the month, whereas Sydney saw a fall of -0.9% in dwelling values for July 2020.
This is certainly now surprising, given the recent second wave of coronavirus cases in Melbourne. This has now resulted in Stage 4 Restrictions with the Victorian State Government’s recent announcement.
This has impacted on consumer sentiment with readings from the ANZ-Roy Morgan Consumer Confidence Rating weakening throughout July, despite the huge recovery from the April lows. This index shows a high correlation with HOUSING MARKET ACTIVITY (not prices). The recent downturn might therefore suggest that buyers and sellers may once again retreat to the sidelines.
In terms of changes in rent, Brisbane is doing well compared to other capital cities. The weakest rental conditions are being experienced in Hobart (House rents down -2% and units down -4.5% since March), Sydney (house rents down -1.1% and units down -3.2%) and Melbourne (house rents down -0.7% and units down -3.1%). It is important to mention that the weaker rental conditions are larger in the unit markets, compared to the housing markets in these cities.
What’s going to happen to the Brisbane Property Market moving forward?
There is a lot of worry and concern about what might happen to property values across the country when the governments fiscal response starts to taper in October and repayment holidays expire at the end of March next year. Of course, we may see a rise in distressed properties coming to the market. What we do not know is if this will put any downward pressure on prices. This is where I think the different property markets around Australia will each experience something slightly different.
According to the Commonwealth Bank Home Buying Spending Intentions Index, there was a 6% rise in home buying intentions nationally up to the end of June 2020. This index showed the index had returned back close to levels seen in March – after much weaker readings in April and May.
We are definitely seeing this trend on the ground with a the current high volume of buyers in Brisbane. Because of this, I’m sure we could see some moderate increase in new listings come to the market without any significant impact on the supply and demand balance. Remember property prices will only fall when supply outstrips demand.
With dwelling approvals now at the lowest level in 8 years, the future supply pipeline also looks tight. The most recent Australian Bureau of Statistics Data data showed a decline of -10.9% in new detached house approvals in Queensland.
Real-time demand is still strong and Brisbane property buyers are being fuelled by the lowest ever interest rates, good levels of affordability and strong rental yields compared to many other state capitals. This is good news for our local Brisbane property market and these factors will continue to support our property values into the future.
If you need help navigating the Brisbane Property Market, or if you are looking to purchase a home or an investment property in Brisbane in the future, please book a free discovery call to understand how we may be able to help. You can also find out more about our services by clicking HERE.