This article will highlight what has been happening in the Brisbane Property Market Update during December 2020.
The last month of 2020 delivered a strong wrap up for the year for Brisbane. There was little slow down in the weeks leading up to Christmas. Buyers were still very active throughout the city up until around mid-December. This article will provide a summary of what the data has now confirmed and also some of the observations we have made from our on-the-ground assessment.
At a macro level, the Australian Economy is performing miraculously given the context of the global pandemic. According to ABS data, approximately 84% of jobs have already been recovered. Job ads area also up nearly 50% of their lows all pointing to a recovery in the right direction for us all, nationwide.
Last month we reported, consumer confidence was the strongest it has been in 7 years. During December that climbed to 10 year highs according to Westpac Economics.
Brisbane property prices have continued to show positive growth, a trend that has been continuing for several months now. Let’s explore this in further detail in the summary below.
Brisbane Property Market Update – Prices
According to the latest Hedonic Home Value Index data by Corelogic, dwelling values in Brisbane saw an overall median monthly price rise of a 1.1% over the month of December 2020. The current median value for dwellings across Greater Brisbane is $521,686 which is the highest it has ever been.
The quarterly growth in dwelling values across Greater Brisbane was 2.1% and annual growth for the year was 3.6%. Brisbane has outperformed the national combined capital city average for annual growth in 2020, which was recorded as being a more modest 2% over the past 12 months.
In terms of which market segments within Brisbane are performing the strongest, Corelogic Data confirms that dwelling values in the upper quartile rose 1.25% in December. This is compared with a 0.94% rise seen in the lower quartile values according to Corelogic Data.
Melbourne is now the only capital city location that still reporting negative annual price growth, and its dwelling values are still -4.1% off their previous March 2020 peak. Sydney, whilst reporting annual price growth up to the end of 2020, is also still down -3.9% from its previous peak in July 2017. Additionally, Perth and Darwin are down -19.9% and -25.7% respectively from their 2014 peaks, despite showing positive annual price growth across the last 12 months.
In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 1.2% across the month of December 2020. The current median value for a Brisbane house is now $576,338, the highest it has ever been.
The Unit Market in Brisbane saw some positive growth in the median value once again with an increase of 0.4% for the month of December 2020. The current median unit price in Brisbane is now $390,785, which is still 0.6% lower than 12 months ago.
Brisbane Property Market Update – Rental Market Movements
The Vacancy Rate in Brisbane as a whole fell again between October and November 2020, and now sits at 1.8% city wide. There are many areas in Greater Brisbane where vacancy rates are even tighter. The table below highlights where vacancy rates across Brisbane sit at the end of November 2020.
|Region||Vacancy Rate November 2020|
|South East Brisbane||0.8%|
Source: SQM Research
Vacancy risk is still highest within the Brisbane CBD, although there has been a rapid recovery over the past few months when vacancy rates peaked at around 14% in this location. The CBD and inner city areas are also the locations in Brisbane where there is a large number of higher density units that have been impacted by the pandemic, compared to other areas and alternative building types.
Rents in the unit market in Brisbane saw price falls -1.1% from January to December 2020, whereas housing rents increased 2.7% across the same period.
See below the change in rents for Brisbane Units and Houses across the last 12 months according to Corelogic Data.
What did we see on the ground across Brisbane during December 2020?
Typically in the lead up to Christmas, many buyers prefer to spend their time Christmas shopping rather than property shopping. This did not seem to be the case in Brisbane throughout December.
We observed strong auction attendance right up to the last weekend before Christmas. We also observed strong bidding from those who were in a position to buy under auction conditions. Of particular interest, was the higher than normal interest in properties in prime locations that were ripe for renovation. In several examples, we saw higher than normal bidder registrations for these types of properties across our City.
Brisbane Property values are definitely in an upswing phase and buyers must consider this when considering making an offer on a property. As I reportes last month, if buyers are relying on sales that occurred 3-4 months ago to come to a price to pay for a property in the current market, they will in most cases simply miss out. The market is strong in Brisbane and buyer activity is continuing to increase. There are definitely more active buyers entering the market than there are new listings being added so a sense of urgency is continuing to grow in Brisbane.
The months ahead …
Looking forward into 2021, Brisbane looks to be very well placed for some strong price growth.
The risks associated with less fiscal support and the expiry of mortgage repayment deferrals have diminished as the economy has outperformed all forecasts. We have also seen a rapid improvement in labour markets nationwide, and especially here in Queensland. In Brisbane, the COVID-19 outbreak has had minimal impact in terms of restrictions and lockdowns since the first wave back in March 2020.
Of course we cannot underestimate the risk that further outbreaks of the virus in the months ahead may impact the recovery of our local economy. We have done so well to date. With increasing positivism around the distribution of a vaccine and the management of small clusters, it is looking more likely that the trajectory for our local housing market will remain positive in the months ahead.
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