This article will update on the Brisbane Property Market during August 2021.
This month started with the short sharp lockdown throughout Brisbane, so buyer and seller activity stalled until the second week of the month. Brisbane Property Market Update August 2021 saw a lot of Agents held back their new listings until the lockdown was over, but buyers were back out and active from the first weekend after lockdown was lifted and the backlog of new listings came through in the remaining weeks throughout August. The month has remained strong in terms of price growth in both the housing and unit sectors of the Brisbane market, despite nationwide headlines suggesting that property markets are losing steam. This is simply not the case here in Brisbane.
Transaction activity across Brisbane is strong. According to CoreLogic, sales volumes in Brisbane rose 47.5% in the year to July 2021, an annual change that reflects the heightened demand from buyers across the city.
Whist new listings have increased 5.3% in Brisbane compared with the equivalent period last year, total listings are down -29.1% according to CoreLogic. What this means is that more buyers are making compromises and buying properties that may have been on the market for longer.
CoreLogic also tracks the number of sales that have taken place over a given period by the number of new listings added to the market over the same time. For the past decade, the ratio has averaged 0.9, suggesting that for each listing added to the market, there was just under one transaction that took place. Now, this ratio is tracking at 1.4 nationally over the three months to July 2021, and 1.3 in Brisbane.
Even auction clearance rates in Brisbane are tracking at record highs. At the same time last year our clearance rates tracked between 35% and 58% throughout August, but this year the clearance rates during August according to Domain are tracking between 73% and 80% in Brisbane, which really is astonishing for our city.
Investors are making up 26.6% of all housing finance commitments in Queensland, which is slightly less than last month. This is indicative of a further lift in lending to owner occupiers, but not first home buyers whose lending commitments are also falling, comprising only 26.3% of all owner occupier housing commitments across the State.
It really is not a surprise that demand continues to grow given mortgage rates are so low. They have fallen by about 110 basis points since July 2019. This means that housing interest payments as a percentage of household incomes have declined from a peak of 10.6% in 2008 to now just 4.7% across Australia. Mortgage stress is not something that a lot of households have to worry about at the moment.
Despite concerns that mortgage rates were tipped to increase due to the better-than-expected economic recovery at the beginning of 2021, this now looks less likely given the extended lockdowns throughout New South Wales, Victoria, and the Australian Capital Territory. Mortgage rates are one of the most important determinants of housing demand, so with the RBA likely to facilitate a low-rate environment for some time yet, buyer demand is unlikely to taper off in the near future. This is especially true for Brisbane, and South-East Queensland as a whole, where we continue to see an influx of interstate migrants which is putting even more upward pressure on the demand for housing to rent and to buy.
Let’s take a deeper look into the performance of the Brisbane market throughout August 2021.
Brisbane Property Market Update August 2021 – Prices
The latest Hedonic Home Value Index data by CoreLogic released on 31 August 2021, has confirmed that the median dwelling value in Brisbane increased a further +2.0% over the month of August. This is equivalent to the dwelling growth that was experienced in Brisbane throughout July, so there is no change in the momentum of price growth across the city. The current median value for dwellings across Greater Brisbane is $612,377 which is $13,672 higher than just one month ago.
The quarterly growth in dwelling values across Greater Brisbane is now 6.1%, suggesting a slight pick up again since last month, and annual growth for the last 12 months is now 18.3%.
The top end of the Brisbane Market is still driving the growth as you can see in the CoreLogic Data below. This shows that the strongest growth in dwelling values occurred in the top 25% of values in the three months to July 2021, with 6.9% growth in that market segment (up from 6.4% since the end of June) compared to 4.3% growth in the lowest 25% of values across the city (up from 3.8% last month). Whilst both the highest value and lowest value segments of the market continue to show growth over the last 3 months, the rate of growth at the top end continues to outperform when comparing the month-on-month trends.
Brisbane Property Market Update August 2021 – House Prices
In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 2.1% across the month of August 2021 which is just below the growth that we have been experiencing in the housing sector throughout Greater Brisbane for the last 3 months. Monthly growth has been trending at 2.2%, so there has been a slight reduction in August compared to the preceding 3 months. The 12 month change in Brisbane house prices has been 20.2%. The current median value for a house in Greater Brisbane is $691,214, the highest it has ever been. This is $16,476 MORE than one month ago!
Brisbane Property Market Update August 2021 – Unit Prices
The Unit Market in Brisbane saw further positive growth in the median value this month, and a further pick up in the momentum of that growth also. July saw an increase of +1.4% growth for units in Greater Brisbane, compared to +0.8% last month. The 12 month growth for units across Brisbane is now +8.9%. The current median unit price in Brisbane is $425,777, which is $6,635 more than one month ago.
Summary of Price Growth in Brisbane for the Year to Date
The graph below charts the % change in property values for Houses and Units since January 2020 for both houses and units in Greater Brisbane.
The trendlines here show clearly that the housing sector has outperformed the unit sector every month since October 2020. Whilst the unit sector saw a loss of price growth momentum between May and June, this seems to have recovered throughout July and August.
Below we have charted the actual median values for Houses and Units across Greater Brisbane since January 2021. You can see Houses have outperformed Units when breaking the growth down into different asset types in Brisbane.
Brisbane Property Market Update August 2021 – Rental Property and Movements
Vacancy Rates at a city-wide level in Brisbane remained unchanged between June and July, staying at 1.3%. The table below highlights where vacancy rates across Brisbane sit at the end of July 2021.
|Region||Vacancy Rate June 2021
(change from May 2021)
|Beenleigh Corridor||0.6% (-)|
|Brisbane CBD||4.5% (+0.6%)|
|East Brisbane||1.3% (+0.1%)|
|Inner Brisbane||2.2% (+0.1%)|
|Northern Brisbane||0.7% (-)|
|South East Brisbane||0.7% (+0.1%)|
|West Brisbane||1.2% (-)|
Source: SQM Research
There was a small spike in vacancy this month in the Brisbane CBD, which contrasts with the trends we have been witnessing in previous months. This is something we will be monitoring over the coming months. Otherwise, vacancy remains tight across the city. There simply are not enough investment properties in Brisbane at the moment for the number of tenants looking for somewhere to live. This continues to put upward pressure on rent prices throughout the city.
Rental incomes in the unit market throughout Brisbane have seen an annual increase of 5.6%, up a full +1.0% compared to last month.
Housing rents are still climbing too, with the annual increase in rents for Brisbane Houses now at 10.1% according to CoreLogic Data, which is +0.7% higher than a month ago.
The table below shows the changes in rents for All Houses in each region as well as the change in rents for 2 bedroom units.
|Region||All Housing Rent Changes Last 12 months||2 Bedroom Units Rent Changes Last 12 months|
|South East Brisbane||+6.4%||+1.7%|
Source: SQM Research
Gross rental yields for dwellings across all of Greater Brisbane are compressing even further with escalating dwelling prices outpacing rent price growth. According to CoreLogic, at a city-wide level, gross rents have dropped again this month to 3.9%, down a further -0.1% from last month. This is a new record LOW for Brisbane.
What did we see on the ground across Brisbane during August 2021?
During the lockdown at the beginning of the month, the Brisbane real estate market went quiet which is typical of what we have experienced in other lockdowns. Whilst private inspections were still possible, these were not encouraged given the risks associated with the transmission of the Delta variant of Covid-19.
Buyers are becoming increasingly stressed and frustrated. Many don’t understand the pace of the market and what they need to pay to secure a quality home or investment. That sense of missing out becomes disheartening, especially when there is such a small number of options available for buyers to choose from.
Brisbane Property Market Update August 2021 – The months ahead …
Heading into Spring we expect conditions to remain unchanged throughout Brisbane. Normally at this time of the year, we see new listing numbers starting to ramp up. Whilst new listings are starting to show some more positive signs, there does not seem to be enough properties available for the number of buyers in the market right now.
We still see Brisbane property values climbing substantially in the immediate future based on the real-time indicators we are assessing each week.
Time will tell how long this boom lasts. But we have waited a long time for this in Brisbane and it is finally here!