In the latest episode of the Brisbane Property Podcast, hosts Melinda and Scott Jennison provide a comprehensive September 2024 Brisbane market update. Despite ongoing economic challenges, Brisbane remains one of the top-performing capital cities in Australia, showing strong growth in both house and unit values. The episode covers trends in dwelling values, sales volumes, auction clearance rates, and vacancy rates. Listen to gain insight into how these metrics are shaping the local property market.
Key Episode Highlights:
- Brisbane recorded a 0.9% increase in dwelling values in September 2024.
- The city remains the second most expensive capital city for house and unit values.
- Investors remain active, representing nearly 39% of housing finance commitments.
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Listen to this insightful episode to understand the intricacies of Brisbane’s property market and equip yourself with the knowledge to navigate it effectively.
Transcript
Introduction
It is market update time once again on the Brisbane Property Podcast. So we’re going to be talking through all of the latest data. We’re going to be breaking down the house market and the unit market so that you can get a really good understanding of what is happening here in our city. We hope you enjoy this episode.
Welcome to the Brisbane Property Podcast with your hosts, Melinda and Scott Jennison.
Hello everyone and welcome back to another episode of the Brisbane Property Podcast with Scott and Melinda Jennison and its market update time.
National and Brisbane Market Overview
It certainly is, and we all know how much I love sharing at the latest updates in terms of all of the data and also what we’ve been seeing on the ground across various parts of Brisbane. So we’ve put together all of the information to share with you today. I will say upfront that the majority of the information that we will be reporting on this month will be core logic data. Normally we also cover the prop track data, but for whatever reason, that’s not become available for us for the month of September. So today’s episode will be focused largely on that core logic market update data.
And we have seen obviously in the past slight differences in those, the reports, but a similar trend. So that’s always promising to know. But Brisbane property market’s continued to show pressure, strong price pressure, and very steady throughout September of 2024.
Brisbane Market Performance
Yeah, so when we look at the performance of Brisbane, it does remain one of the top three capital city markets across all of Australia. So it varies whether it’s in second or third place in terms of monthly and quarterly growth. But Adelaide and Brisbane performing at a very similar rate of growth and then Perth has accelerated quite a far distance ahead of all other markets around Australia, although it’s also starting to show signs of deceleration in terms of that rate of growth. So Brisbane’s still showing growth month on month, and that is quite different compared to other capital city markets where growth has really stagnated or in fact, growth has actually gone into negative territory and that’s something that we can discuss in today’s podcast. So, Brisbane’s still performing well when we are looking at a national performance in terms of capital city markets.
Property Market Data Breakdown
Dwelling Values and Growth Rates
As we dig in a little bit deeper, we will go through obviously the numbers and percentages and changes, but Brisbane recorded a 0.9% increase in dwelling values for September, a quarterly growth rate of 2.7%.
Yeah, and that’s slightly below the quarterly growth rate that was recorded at the end of August. It was sitting at 2.9% at the end of August. So you can see that slight easing in the rate of growth even though month on month prices are still escalating. So absolutely buyers will be happy to hear that the rate of growth is decelerating, but of course for some sellers we’re still seeing their expectations shift at that higher rate, and that’s why we’re seeing those auction clearance rates start to lower. And we’ll get into the dynamics of what can happen at auction in this podcast as well. But look for the same period. When we look at the national average over the last three months, the national average growth rate has been 1%. So, Brisbane still well and truly outperforming with that 2.7% growth in the last three months.
Sales Volume and Property Listings
So, as we talked about sales side, I mean if you jump onto the sales and you look at the trends and what’s happening on the sales side of it, we’ve seen a bit of an increase over 12 months. We’ve seen sales volumes increase 7.3%, so the market is still really, really strong on that side of it.
Yeah, sales volumes are often a reflection of buyer activity and this shows that there’s a lot of continued interest in Brisbane despite broader economic head headwinds such as higher interest rates and cost of living pressures. There’s still a lot of transaction activity happening here in Brisbane, and the fact that sales volumes have increased over the last 12 months is an indication that buyer demand remains strong across the city.
But when there’s sales, there’s obviously we need listings. Again, it’s a different story there. We have seen lower listing numbers continue on as well.
Yes, that’s right. So, when we look at listings, we can categorise listings according to new listings. They are properties that have become available for sale just in the last 30 days. And then total listings, which is the total number of properties that might be available, that will include the new listings as well as older listings that may have been sitting on the market for longer than 30 days. So in Brisbane September, listing volumes were 0.7% lower than in August. That’s for new listings. And total listings were actually down 7% month on month. So although we didn’t see a huge change in the number of new listings, only very, very slightly down, we did see a greater fall in the number of total listings available between August and September. So what that means is the total amount of stock that buyers have to choose from actually shrunk across the month of September. Now we can also look at how the total listings compare right now compared to 12 months ago and in Brisbane we’re down 11.9% right now compared to 12 months ago. So still very tight in terms of the total number of listings available, and this is what’s contributing to the ongoing issues of supply and demand imbalance, and that’s why we’re seeing that price pressure because sales volumes are elevated and they’re up year on year, and yet total listing volumes are lower. So, we’ve got this imbalance between supply and demand.
Auction Dynamics
It’ll be interesting, and I think I mentioned this in one of our previous podcasts, it will be interesting to see next month when we do October market update because we’ve seen a little bit of an uptick, I think on the ground in some more listings coming through school holidays, as I mentioned last time, has a bit of an effect. So it will be interesting to see that what has obviously historically been a spring selling season, whether or not that does continue a little bit and the confidence of the sellers as well.
And when Scott mentioned school holidays here in Queensland, the school holidays occur at the end of September. It’s out of alignment with some of the other states across Australia. And so we typically see a reduction in new listings coming to the market during school holiday periods and some agents will hold off on listing those properties and bring them to market following the school holidays. So that’s why we potentially expect that October should see another rise in those new listing opportunities because of that break that occurred because of school holidays in September.
It’d be nice if we’re all lined up, even daylight savings, that’d be nice to line up with the southern states a bit. Auctions, and I know that we looked at auctions, I was actually at some in-room auctions on the weekend. I attended some in-room auctions. There was 24 I think properties went to auction. Majority of them actually did sell, so it was quite a high percentage there that did sell. And I know we’re going to touch on the clearance rates, auction bidding and things like that. Roughly on average there was about four bidders on average per property. So really good numbers at an in-room auction that I attended on the weekend. What do the numbers reflect on that when we look at the numbers here, Linda?
So overall for Brisbane throughout the month of September, auction clearance rates according to Apollo auctions data were recorded at 58.1%. That is a slightly lower figure than what was recorded throughout August. Now what is interesting is that the number of registered bidders per auction throughout September actually increased compared to August. So that means that there were more buyers per property auction that had registered throughout September, so that number was 3.7 buyers per auction. However, the fact that the auction clearance rates reduced, this is an indication not of buyer demand, but of seller expectation. And this is why really understanding and unpacking the numbers can make a really big difference and not just going with the high level numbers. If auction clearance rates are reducing, some would assume the market is cooling. However, the auction clearance rates are not always an indicator of buyer confidence. It’s actually sometimes seller sentiment. And if sellers are not prepared to meet the market when there’s an average of 3.7 bidders per auction, it can sometimes mean that seller’s expectations are moving at a faster rate, then the buyer’s expectations are on price. So these are not auctions where there’s no bidders turning up. These are auctions where there are bidders and they’re still passing in because the buyer and the seller cannot agree on a value where the property will transact.
Yeah, I think that’s a really good point. When you are getting that many people turning up, registering and actually bidding, it is showing that there is that high demand there. And it probably is a little bit of the vendor expectations as you mentioned.
And also the numbers show that 66.7% of those that were registered at auctions across Brisbane were actively participating in the bidding. So it does reflect strong competition. It’s not like people were registering and not bidding, 66% is quite a high volume of active participants in the market. So it indicates that vendor expectations might be slightly outpacing the market.
It’s interesting when we look at who’s buying as well and this information that we’ve got here, investors are still making up a good part of the market. 38.9% investors first home buyers account for 26.3%. So your investors are still very, very strong in the market,
And this is data for all of Queensland and it’s comprised of those housing finance commitments and we can get an indication of who’s buying in the market segments. So the fact that we’ve seen 38.9% of investors taking out loans to purchase is reassuring, especially at a time where vacancy rates remain very low, especially at a time where there has been talk about negative gearing changes. Of course, nothing has been discussed further at this point in time, but clearly investors still have a level of confidence to be purchasing property here in Queensland because that activity in terms of housing finance commitments is actually quite high on a historical basis.
And when you look at investor side of it, obviously some attractive rental yields. As you mentioned, vacancy rates are very low, which will jump into the vacancy rates in a little while, but gross yields are currently sitting in Brisbane, 4.6% for units compared to houses at 3.5%. So very strong gross yields
Look stronger than other capital city markets, although those yields have been compressing over the past 12 to 18 months as property prices have been escalating at a faster rate than rental price growth. So still relatively attractive yields compared to some other locations, but certainly the housing market is coming down from where it was only two to three years ago. We certainly had much higher yields previously. And this is why it’s really important for investors to get an understanding of the balance between yields and growth that they’re looking for because of course we are in a much higher interest rate environment now as well, which means that investors holding costs are going to be more elevated, investors also have higher insurance costs, and the cost of living is causing other expenses associated with holding an asset to increase. We’ve got new rental laws that have now come into effect for minimum housing standards, which potentially cost the landlord more. So these are really important factors that all investors need to consider when it comes to asset selection. So it’s not just about the yield and the growth, it’s these other elements as well.
CoreLogic Pain and Gain Report
It’s interesting. The next part that we’ve got here, and I’ll let you run through that a little bit because there was a core logic pain and gain report. So some of the highlights in that, obviously Brisbane remaining is the most profitable capital city for property resales.
This is a national report that looks at all of the resales of properties to see how many of those properties actually sold for a profit versus those that sold for a loss. So, when we look at those properties that sold in Brisbane or resold in Brisbane, Brisbane came out as the most profitable capital city market for all property resales with 99.1% of all sales in the June 2024 quarter delivering a nominal gain. So that’s reassuring for property buyers and property sellers. For example, there’s been talk over the past 18 months to two years that people may need to sell because interest rates are increasing or there’s cost of living pressures. Well, this data reaffirms that in the event people do need to sell, it’s very unlikely that they’ll be in a negative equity position because the profits upon resale are really high with 99.1% of properties transacting for a higher value than what they were purchased for in that quarter up to June 30.
Infrastructure and Investor Activity
Well, I think that’s one big, I mean a few big things why that’s actually happening. I mean you look at Brisbane, it’s capital growth over the recent years, infrastructure developments, economic growth, really strong employment market as well. So there’s a lot of factors in there behind that’s happening and I can’t see a lot of that changing to be honest. There’s a lot more infrastructure happening in Brisbane. We are seeing a few cranes popping up, not as many as we probably like. I actually saw talking to a person the other day, and there’s a big development down at Toowong, quite a large development, the consolidate group, which we talked about recently on a podcast that we did here from a morning information that we went to, and all of those units have been sold and it’s still coming up. They’re still cranes above it, they’re still building it. And I believe from what he said, that all the units have actually already been sold prior to completion.
So, there’s still obviously demand in the market for quality product and that’s obviously a riverside address and location and it does appeal to the downsize of market at a higher price point as well. So this is the sort of information that locals that work in the industry always know because that obviously adds value to our clients when we’re partnering with them for an investment or a home purchase. So let’s get into the data.
Yeah, look, let’s look at some dwelling values. As we mentioned early on 0.9% increase on the median dwelling values for greater Brisbane reported by CoreLogic in the last month.
That’s right. So Brisbane remains the second most expensive capital city market when we’re looking at median values for all dwellings across capital city markets around Australia. So quarterly growth, as we mentioned earlier in the podcast for dwellings sitting at 2.7% and annual growth for all dwellings here in Brisbane is sitting at 14.5%. Now compare that with Adelaide’s annual growth for dwellings 14.8% and Perth at 24.1% growth. Now I’m also going to mention some of those annual growth rates for some of the other capital city markets. Melbourne sitting at negative growth of 1.4% over the last 12 months. Hobart also negative at 1.1% negative growth. We’ve got Canberra at 0.7% growth. We’ve got Darwin at 2% growth and we’ve got Sydney that experienced 4.5% growth. So Brisbane, Adelaide and Perth well ahead of all other capital city markets. And this is largely driven by that supply and demand imbalance with Adelaide, Brisbane, and Perth, all showing much lower levels of supply in terms of listing volumes. So this has been a critical piece in continuing to put a floor under our market and continuing to put that price pressure upward.
And the median dwelling value in Brisbane now stands at $881,091.
Yeah, up by 66.4% since the COVID-19 pandemic. If we remember, that was four and a half years ago that we had those shutdown periods. And since then, the market really has delivered some very strong capital gains. So obviously driven by a supply of a combination, sorry, of that low supply and high demand as we’ve become a lifestyle city as well, and a lot of people have relocated from other locations around Australia
And a similar picture and trend on the segments of the market. So we’ve seen that 25% be the most area that people are looking to buy in or have bought in.
You mean the most affordable?
Most affordable.
Correct. So the most affordable 25% of property values have experienced a 5% increase in values over the last three months, whereas the most expensive 25% of property values have only grown 1.8% over the same period of time. So we’ve definitely seen a drive and a shift to affordability. Now, this is all dwelling values, so it does include townhouses, units, and houses all in the one data set, but we are seeing that outperformance in the unit and townhouse segment of the market. That’s also contributing to some bias in this data. But absolutely there’s no doubt that the more affordable segment of the market is growing at a much faster rate in Brisbane compared to other segments. Now that’s also the case in Adelaide and Perth. The same trend is occurring across all three markets that are growing rapidly in value.
Yep, definitely. I was going to mention that as well. It seems to be very similar across the three of those as well housing values. So we’ve seen the median price for housing increase by 0.8% in September quarterly growth rate for houses at 2.4%, which is down slightly 2.5%, which were recorded at the end of August.
Yes. And one thing I will say in relation to Brisbane’s median house values across the month of September, we have now become the second most expensive capital city market for median house values over the month of September. So we have slipped ahead of Canberra now with a median value of $973,534. Brisbane sits in second place behind Sydney with Canberra not far behind, and we’ve continued to outperform the median house price growth in Melbourne, and that changeover occurred earlier in 2024. So the Melbourne market has remained fairly stagnant, and in fact, the annual growth rates show that it has come backward over the 12 month period, whereas Brisbane has continued to outperform at a median value level, and that’s why we’re now seeing the median values being more expensive. I will say, however, though, when you are looking at a specific budget or a specific distance from the CBD, it doesn’t mean to say that Brisbane doesn’t continue to provide value for money compared to the likes of Melbourne because what your dollar value will buy here in Brisbane is likely to be a larger block of land or a larger dwelling, a larger house on that block of land within a specific radius from the CBD. So understanding the budgets that will buy a certain product in a certain location is also critical. Median values don’t always tell the true story of what a buyer is able to afford within a particular market.
Yeah, I think we’ve said this a few times. The bang for your buck that we say all the time, what you get, whether it’s in Brisbane, Sydney, Melbourne, and other areas, whether it’s a unit close to the city or whether it’s a house, there’s a massive difference from what you will get in the different markets as well.
Absolutely. So looking now at the unit values, so Brisbane unit values actually increased 1.2% in September. Now that is a little bit of a slowdown compared to previous months where growth was sitting at 1.8 or 1.9%. So we have seen a slowdown in that rate of growth, but obviously the growth in the unit market is still outperforming the growth in the house market. So house market 0.9%, unit market 1.2% growth across the month,
And that’s a quarterly growth rate of 4.2%, significantly higher than the 2.4 recorded for the housing over the same period and annually for units, it surged for very impressive 19.4%.
Yeah, that’s a big rate of growth over the last 12 months, isn’t it? Compared to the house market which experienced 13.5% growth over the last 12 months. You can really appreciate the difference in these two segments of the market, that inner city unit and townhouse market, and even that middle ring market for units and townhouses has really escalated and it has been driven off the back of affordability. So I think if you were a unit buyer 12 months ago, you’d be sitting on some strong equity given that market growth that has occurred in such a short period of time
And the median unit value for Brisbane $661,925.
And it’s the same as the house market. Brisbane is the second most expensive capital city market at a median value level, second only behind Sydney of course. So, unit values here in Brisbane, according to that median figure, more expensive than in Melbourne and in Canberra and all other capital cities as well.
Rental Market Insights
Still performing well, the unit market has for quite a while now. Can’t remember the last time. We haven’t said that actually the rental market. So obviously as we mentioned earlier, still very, very competitive vacancy rates at just 1.1%.
And look, vacancy has been fairly consistent around that one to 1.1% for many months now. So I will say that many tenants will be breathing with a sigh of relief, I guess you could say because the rate or the annual rate of rental price increases is slowing down. We are looking at an annual growth rate for rents now at 5.4% for houses and 5.1% for units. Now, if you’ll recall 12 months ago we were discussing 15%, 12% annual growth rates. So it really has decelerating. What this means is that rents are still going up, but they’re going up at a much slower rate. So tenants will find relief in these figures knowing that the massive increases that we’ve seen more recently are really starting to slow down.
As we mentioned earlier, I’ll just remind everyone there, so the gross rental yields in Brisbane currently sitting at 3.5% for houses, 4.6% for units.
Regional Vacancy Rates
That’s right, yes. Just a quick run through the regions in terms of vacancy rates in different parts of the city. So, in Beenleigh, there’s been no change between August and September. Vacancy rates still sitting at 0.8%, so that region is equally one of the most tightly held regions in terms of rental properties. The CBD tightened up a little bit. It was 2% vacancy in August that’s dropped to 1.9% in September. East Brisbane has not changed month on month. Vacancy rates in this region are sitting at 1.2% in the inner Brisbane area. 1.5% was vacancy rate in August. That’s dropped slightly to 1.4% throughout the month of September. Ipswich is actually the only region where we’re seeing vacancy rates slightly creep up. We’ve got 1.1% vacancy in August, and that’s increased to 1.2% in September. So, we’ll see what’s happening in that region when we look at the monthly data next month. Northern Brisbane unchanged 0.8%. So this is the other region that is equally the tightest held area in terms of rental properties. So that’s going to be one of the areas where there’s the fewest properties available along with the bean Lee region, Southeast Brisbane vacancy rates unchanged month on month sitting at one point, just 1% flat, sorry. And then we’ve got Southern Brisbane and Western Brisbane regions with vacancy rates unchanged between August and September. Both of those areas, vacancy rates are sitting at 1.1%, which is in line with the citywide average. So you can see there the only market showing more relief for tenants, more properties available for rent over the last month was in the Ipswich region. All other regions either remained unchanged or became a little bit tighter, meaning fewer properties became available to rent.
So as a bit of a wrap up for it, so obviously as we mentioned, dwelling values increased 0.9%, we saw unit markets still perform very, very well. Bit of a standout 1.2% good performance. I think it’s still a very, that supply demand, which you keep talking about, and obviously still some attractive yields for people investing. But yeah, I think that supply and demand side of it, more properties to come to the market hopefully in the coming months in the lead up towards Christmas as well.
Supply and Demand Analysis
Just for some perspective. In terms of those listing volumes, the long-term trend for Brisbane were for total listings to sit somewhere between 28,000 to 32,000 listings per month. However, in the last 12 months, probably since Covid, to be honest, the average volume of listings across all of greater Brisbane are sitting anywhere between 17,000 to 19,000. So we are still down around 30 to 40% below our long-term average. That’s a significant difference, and when you look at that in graphic form, you can really see the change that has occurred. Now remember, at the same time we’ve seen a huge increase in the number of people relocating to Brisbane from other locations around Australia. We’ve also seen an uptick in those immigrating to Brisbane from overseas, those international migrants. So it’s no wonder that we have a housing shortage throughout Southeast Queensland. There really is not much to rent, and that’s reflected in those low vacancy rates, but also there’s very little to buy, and that’s evident in terms of the low listing volumes, and that’s why we continue to see those prices escalate because there’s more buyers than there are properties available for sale that creates competition and competition drives prices upward.
Final Thoughts
Obviously construction costs also had a supply on that housing supply side of things. So yeah, that has had an impact Queensland election just around the corner. So obviously that will probably have some sort of influence on what’s happening in the Brisbane market, especially with a few changes that are going to happen there. Well, we think what might happen there anyway. And obviously there’s some peak bodies that are actually working to discuss things with government as well. So that’s just around the corner, obviously then the lead up to Christmas, and I think the property market’s still looking pretty positive in Brisbane.
Yeah, look, the school holidays are now over. We are back into the last term. We see a lot of activity typically in the last few months of the year as people are looking to make their big decisions and be settled and finalised prior to Christmas. So we do expect more market activity to occur, especially between now and early December. We’re hopeful that there’ll be some more sellers that will release their properties to the market. Obviously, there’s plenty of buyer activity, there’s a lot of buyers that are really fed up and desperate and they’ve missed out just too many times, and we hear that daily in the inquiry that we receive to our buyer’s agency service here in Brisbane. But ultimately, we believe that the market activity will remain strong, and unless we see some significant impact that’s going to reduce the demand or increase the supply of properties, the number of properties available for sale, the only thing that we can see is that there’ll continue to be that upward pressure on prices simply because of that imbalance that is occurring in both the supply and the demand sides of the market.
But yeah, positive times looking ahead in the build-up to the beautiful warm summer months that we’ve got coming up here in Brisbane. So that’s a bit of a wrap for today for the market update, some good information there. And if you need help for property, reach out the team at streamlined property buyers. We’re always here to chat to and to help people get into the market here in Brisbane. So I will let Melinda wrap it up as I normally do. Thanks very much for listening from myself. Take care, and bye for now.
Thank you once again for joining us on the Brisbane Property Podcast, and we hope that you have enjoyed another episode with all of the statistics to bring you up to date with what’s happening in terms of our market. If you’ve enjoyed this episode, please share with friends and family. We would love for you to leave us a review on whichever platform you are listening to this podcast. And until next week, we hope you have a fabulous time, and we’ll speak to you again then. Bye for now.