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Brisbane Property Market Update April 2024

Highlights Diverging Trends in Housing and Unit Sectors Amidst Slowing Growth | Melinda Jennison

The pace of growth in the Brisbane property market appears to be decelerating, as evidenced by changes in Brisbane’s median dwelling values. Monthly growth for Brisbane dwellings has fallen below 1%, to 0.9% in April, marking the first time this has occurred in the last 12 months.

However, upon analysing dwelling value data, a clear trend emerges, indicating a divergence between the performance of the housing and unit markets within Brisbane. Price segmentation data also suggests that affordability pressures may be impacting the pace of growth across various segments within the Brisbane property market.

 

 

Brisbane-Property-Market-Update-April-2024-Summary

 

 

This isn’t unexpected, given that the Brisbane market has seen 56.81% growth since the onset of COVID-19 in March 2020. To put this into perspective, Brisbane’s market has shifted by just under three hundred thousand dollars at the median dwelling level over the past four years.

While March saw a slight relief for buyers with a modest increase in new listings entering the market, unfortunately, this trend reversed in April. According to SQM Research, new listings in Brisbane were 14.27% lower in April compared to March 2024. Total listings also declined, down by 8.15% in April compared to March.

Comparing listing volumes in April 2024 to those from 12 months prior yields an interesting narrative. New listings were 18.42% higher in April 2024 compared to the same period a year ago, while total listing volumes were 8.31% lower. This data confirms that regardless of the angle, buyers in the market throughout April 2024 had fewer options to choose from compared to buyers from both 12 months ago and the previous month.

Sales volumes in Brisbane have risen by 4.4% over the past year, signalling increased buyer activity. However, the median days on the market have decreased and currently stand at 22 days, as per CoreLogic. This downward trend in days on the market suggests that properties are selling more quickly once they are listed. Anecdotally, we are observing many properties selling after their initial open home, indicating that the days on the market figure may include an unconditional period under any sales contract in Brisbane.

In April, Brisbane’s auction clearance rate remained steady at 63.9%, according to CoreLogic, consistent with previous months this year. Apollo Auctions data reveals that, on average, there were 3.1 registered bidders per auction in Brisbane during April 2024, a slight decrease from the 3.7 per auction in March. Furthermore, 62.6% of registered bidders actively participated in auctions throughout the month, marking an increase from March’s 60.8%.

Brisbane Dwelling Values

In April 2024, Brisbane saw a 0.9% rise in dwelling values, as reported by CoreLogic data. This marks a slight dip from the previous month, which witnessed 1.1% growth. The quarterly growth rate now stands at 3.1%, up slightly from last month’s 3%.

The median value for dwellings in greater Brisbane has soared to a new peak of $827,822. This represents an increase of $10,258 from the previous month and $31,004 from three months ago.

Brisbane-Property-Market-Dwelling-Values

Source: CoreLogic

When analysing dwelling value data by segments, it becomes evident that the lowest 25% of property values are experiencing the most robust quarterly growth. In the three months leading up to the end of March, the bottom 25% of property values saw a 4.6% increase, while the middle 50% increased by 3.4%, and the top 75% only saw a 2% increase. Contrasting this with the three months up to the end of February, the top end of the market grew by 2.3%, the middle segment by 3.2%, and the bottom segment by 3.8%.

These trends in price segmentation indicate that the more affordable segment of the market, whether comprising units, townhouses, or houses, is growing at a faster rate than the higher end of the market, which is typically dominated by free-standing houses due to their higher price point.

This trend can also be observed across all other major capital city markets that are experiencing month-on-month growth in the current environment.

Brisbane-Property-National-Dwelling-Values

Source: Corelogic

Information from PropTrack also verifies that Brisbane dwelling values rose by 0.23% during April, with annual growth currently standing at 12.82% based on this data source.

Brisbane-Property-Market-Dwelling-Values-2

Source: PropTrack

 

House Prices in Brisbane

In April, the median house price in Brisbane saw a 0.8% increase. This marks a slowdown from March, when growth reached 1.1%. Currently, the median house value in greater Brisbane stands at $920,046, and the gap between Brisbane and Melbourne’s median house prices continues to narrow month by month.

The monthly change at the median value level over the four weeks in April amounts to $10,058, while the quarterly change in house values in Brisbane, according to CoreLogic data, totals $31,418.

Although we observed a slight increase in the monthly growth rate for houses last month, it’s evident that throughout April 2024, momentum in housing sector growth in the Brisbane market has decelerated once again

Brisbane-Property-Heading

Brisbane-Property-House-Values

Source: CoreLogic

Brisbane-Property-House-Values-PropTrack

Source: PropTrack

Unit prices in Brisbane

The Brisbane unit market has surpassed the housing market in terms of its monthly growth rate. Throughout April, the unit market in Brisbane experienced a 1.6% growth, bringing the current median value to $600,215. For the first time in history, according to CoreLogic data, the median value for a unit in greater Brisbane has exceeded the $600,000 mark.

Quarterly growth in this market segment now stands at 5% for Greater Brisbane, with annual growth currently at 17.4%. This data confirms that the unit market in Brisbane is outperforming the housing market in terms of capital growth performance on a monthly, quarterly, and annual basis.

To put this rate of growth into perspective, over the last four weeks, a unit in greater Brisbane has increased in value by $12,422 at the median value level. Over the last quarter, the median unit price has risen by $31,620 in Brisbane. This growth rate is noteworthy, especially considering that historically, the housing market has typically outperformed the unit market in Brisbane.

Brisbane-Property-Heading

 

Brisbane-Property-Unit-Values

 

The PropTrack data further reinforces this, showing that the monthly growth rate for units in greater Brisbane has risen by 0.9%, significantly surpassing the national average. Additionally, PropTrack data confirms that the annual growth rate for units in greater Brisbane has outpaced the annual growth rate for housing in Brisbane.

Brisbane-Property-Unit-PropTrack

The Rental Market In Brisbane

The narrative surrounding Brisbane’s rental market remains consistent, with vacancy rates fluctuating between 1% and 0.9% on a monthly basis since January this year. According to SQM Research, the vacancy rate in March stood at 1% citywide.

With vacancy rates so tight, it’s unsurprising to see an uptick in the annual change in house rents across Brisbane, as reported by CoreLogic. Last month, the annual change was 7.6%, while this month it has risen to 7.9%.

However, we are witnessing some moderation in the rate of change in rents in the unit segment of the market. For instance, last month, the annual change in rents for units was 11.2%, whereas this month, it has decreased to 10.5%. Despite this, the rate of change remains strong, especially considering many tenants may be reaching affordability limits throughout the city.

The gross yields for both houses and units in Brisbane remained unchanged this month with gross yields for houses currently sitting at 3.6% and for units this figure is 5%

Brisbane-Property-Update-April-2024-Annual-Houses

Brisbane-Property-Update-April-2024-Unit

Source: CoreLogic Summary

The core fundamentals in Brisbane have remained unchanged for several months. Our property market is characterised by limited options for buyers and heightened demand. Despite facing higher interest rates, low consumer sentiment, affordability constraints, and ongoing cost-of-living challenges, both house and unit values in Brisbane have continued to rise rapidly.

Moreover, the rental market in Brisbane is experiencing tight conditions, as evidenced by low vacancy rates leading to rapid rent increases.

Ultimately, individuals seeking shelter may encounter difficulties, whether they are looking to rent or buy in Brisbane in the foreseeable future. These conditions are not likely to change unless more properties become available for sale or for rent.

In terms of longer-term supply, which comes from new dwellings being built, Brisbane faces additional challenges. These challenges stem from restrictions imposed by councils on developable land, higher costs for developers to initiate projects due to current economic conditions and much higher construction costs, and developers’ inability to meet pre-sales targets to commence projects.

Dwelling approvals, especially in the attached dwellings space, in Brisbane have been declining for some time now, and this trend is unlikely to change in the near future.  So we can’t expect a high volume of future supply through new construction projects to change the current fundamentals anytime soon throughout Brisbane.

Population shifts across Southeast Queensland indicate that international migrants are fueling the population surge in the southeastern region of our state. These migrants may have different property preferences compared to those who traditionally prioritise large houses with backyards. Perhaps this is why we are witnessing increased demand in the higher density unit market. This, combined with affordability constraints, could explain why the unit market is surpassing the housing market within Brisbane.

Despite recent commentary suggesting that interest rates may remain elevated for an extended period due to consistently high inflationary pressures, most buyers seem to have factored in the holding costs when considering property purchases at current rates. Therefore, it’s unlikely that we will see any change in demand from buyers based on this commentary.

For buyers, navigating the current market conditions in Brisbane is challenging. Competition is intense, and the fear of missing out is increasingly evident. Property buyers are feeling frustrated due to the limited availability of properties and the tough competition. Unfortunately, we anticipate that these conditions will persist for the foreseeable future based on the existing fundamentals in Brisbane.

 

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

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