Brisbane’s property market is shifting, but not in the way the headlines might have you believe.
In this Brisbane Property Podcast market update, you will learn what is really happening across the Brisbane property market, as Scott and Melinda report remotely from Nazaré, Portugal while staying closely connected to activity back home.
In this episode, they cover:
- Why buyer sentiment has softened across parts of the Brisbane market
- How recent federal budget announcements are impacting confidence
- What is happening with property values across various price points
- Why some segments are still performing strongly despite broader uncertainty
- The market trends buyers need to watch over the coming months
Whether you are a first home buyer, upgrading or downsizing, this episode helps you cut through the noise and understand what is really going on in Brisbane property right now.
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Transcript
0:00: It’s market update time with the Brisbane Property podcast, a special edition from Nazarein, Portugal.
0:06: We hope you enjoyed this update.
0:07: Yes, the Brisbane market has changed.
0:09: We’re going to give you all of the data as well as a summary from our team’s observations on the ground.
0:14: Hello everyone, and welcome back to another episode of the Brisbane Property podcast with Scott and Melinda Jennison.
0:20: And this time we’re recording this one a little bit remotely for you.
0:24: We’ve done this in the past, and we do, we’re very, very lucky that we’re privileged to travel around a bit to watch one of our, our sons play water polo.
0:32: and we’re currently in Nazare in Portugal, where he’s been playing in the under 18 World Championships for Australian in water polo.
0:40: And of course, you know, we’re very proud parents, so that is our number one priority.
0:44: But at the same time, we never lose touch with what is happening back at home, and especially in the Brisbane property market.
0:51: So whilst we are actually abroad, we’ve taken some time out of our schedule to ensure we provide you with this.
0:59: Really important market update because yes, times in Brisbane are different right now compared to a couple of months ago, and we want to be able to bring you factual information at a time where there is a lot of sensationalized media headlines out there.
1:15: And there’s a lot of scaremongering happening.
1:17: So we want to break it back down to the facts, and we also want to share with you what we are observing as a team across Brisbane in Certain segments of the market.
1:28: We obviously do like it, to keep it pretty neutral.
1:31: I must say, I, I’m not really 100% sold on everything that the, the government’s doing, and, and what it’s doing to the, the property market at the moment.
1:38: But, look, it, it is what it is.
1:40: We, we have to deal with it.
1:42: Encouraging home first home buyers, there’s a lot of people talking in, out there on, on social media as well at the moment, that some first home buyers now owe more than what they’ve actually borrowed, things like that.
1:53: So, Look, it, it’s a time, time will tell.
1:56: At the end of the day, the the market is continuing, and we’ve seen Brisbane grow again.
2:00: So dwelling values, and we’ll go through all the numbers as we normally do later on, but we’ve seen the increase of 0.3% over the month.
2:07: Unlike some other capitals, Melinda, where we’ve seen Sydney and Melbourne and Canberra all drop.
2:12: And look, we can underestimate the slowdown that has occurred here in Brisbane.
2:16: Momentum has definitely dropped off.
2:20: And although we’ve still seen positive price growth according to totality data in both the house market and the unit market, that magnitude or the rate of growth has really slowed down compared to where we were just a couple of months ago.
2:33: So yes, we’re definitely seeing demand side impacts as a result of federal budget changes.
2:40: That’s obviously reshaped a lot of the investor settings across all markets throughout the country.
2:45: Consumer confidence.
2:46: Confidence has taken a hit and we’re definitely seeing a lack of confidence in the market per se.
2:51: We’ve also got interest rate uncertainty continuing.
2:54: Obviously international unrest has been ongoing, although that appears to be settling.
2:59: Also we’ve had inflationary pressures putting increased cost of living pressures on housing.
3:05: So there’s a lot of headwinds.
3:07: Let’s not underestimate that impact on demand.
3:11: And if we want to be able to.
3:12: to you and what the data is showing.
3:14: Now, settled sales data up to the end of June is what we will be going through in today’s episode.
3:19: So that will reflect market activity throughout May.
3:23: So the federal budget was handed down on the 12th of May, we knew prior to budget night largely what was going to be introduced.
3:31: However, those changes have now had a number of weeks to play out in property market transaction.
3:38: Data and we’re going to be reporting on the 1st of that this month, given that the typical settlement period here in Brisbane is 30 days.
3:45: I think the biggest thing before we get into all the information and the and the details of, of the market update, I think from what we’ve observed, Melinda, is probably sentiment.
3:56: So the sentiment seems that people are a bit unsure, people are not really sure what to do in the market.
4:01: They’re, they’re not really sure, one, I guess the entities to buy in, because of all the changes through the, through the budget.
4:08: and also they’re a bit unsure of what the market’s going to do.
4:11: We do talk about property investing as a long-term play.
4:15: And I know that we’ve talked about this before, and, and we’ve done some seminars and, and live events with people as well.
4:21: And, and we talk about the fundamentals.
4:23: still staying there for Brisbane as well.
4:25: So I think it’s a, as I’ve said at the start, it’s a long-term play, wait and see what happens.
4:29: But the fundamentals are still there for Brisbane, for investing in property.
4:34: I think the big thing is people are still a little bit unsure of how to buy.
4:39: In their entities, what to buy, I don’t think it’s really changed in our side of things, not towards the brand new type of product, but obviously that long-term play for that capital growth as well.
4:49: And not every property buyer is an investor, as we all know, the majority of buyers in the market are owner occupier buyers, and these people are not impacted.
4:59: And in fact, buying your family home is now the most tax effective type of property.
5:05: So if you are in the market to buy a family home and you’re wanting.
5:09: To also ensure that it actually delivers on capital growth and helping you to build wealth into the future, of course, where what you buy can also have an impact on building wealth through the family home.
5:21: And that’s something that a lot of homeowners do keep in mind when they’re spending such a significant sum of money, even though it is a family home, it’s primarily not an investment property per se, but it becomes part of the wealth building strategy as a whole.
5:35: Your home can be your biggest investment.
5:36: I think that’s something we always talk about as well.
5:38: You, you Home.
5:39: I know people talk about it, and there’s the emotion of home buying and things like that as well.
5:43: But it, it’s probably, I know for us, it’s probably been one of our biggest investments in our life, is buying the right property in the right location.
5:52: yes, there’s all those emotional and personal things attached to it, with school catchments and work and access to public transport, all those things.
5:59: But it’s also can set you up then for future, buying the right home to purchase as well.
6:04: So I think there’s good opportunities on that.
6:06: As, as I said, the sentiment home.
6:09: Investors are a little bit hesitant at the moment.
6:12: For the home buyers, I actually think there’s not a bad, it’s not a bad time to be considering that, because there’s probably less competition at the moment, and there’s those opportunities there to buy the family home as well.
6:24: And now, I just want to break down where that demand has changed.
6:27: Now we have seen, because of the tax setting changes, we’ve seen investor confidence impacted, and a lot of property investors right now are sitting on the sidelines, they’re not moving forward.
6:37: So demand is actually.
6:39: Removed from the market, which is why there’s opportunity for those home buyers that are looking to purchase.
6:44: That said, we’re seeing some investors move counterintuitively, I guess that they’re moving because they see the opportunity that this presents because there’s less demand in the market.
6:57: We have seen some property investors, specifically those that have been purchasing in self-managed super funds, fast track those decisions simply because we now know that purchasing residential property.
7:08: In self-managed super funds has a timeline upon which that’s going to be a strategy that’s acceptable by the government as well.
7:15: So we have seen some fast tracking in in that movement.
7:19: But generally speaking, buyer numbers from property investors have actually decreased here in Brisbane.
7:26: Ironically, and this is something that’s really important to share with people, the very buyers that the federal budget, or rather that the federal government intended to assist through the budget changes.
7:38: That is the first home buyers, they’re also sitting silently on the sidelines, which is a shame for them because this is a great buying opportunity.
7:47: But of course there’s a lot of scary headlines out there about property values falling, about, you know, the Brisbane market’s going to, you know, decline in value.
7:57: The reality is the properties that are available for sale today, in the next 6 months, in the next 12 months, they’re not going to be the same properties that are going to be for sale 2 years from now.
8:07: I’m going to, Back the market in that, you know, in a couple of years we’re going to be seeing prices well ahead of where they are already today, so we might have an opportunity where there’s fewer buyers in the market, demand is lower, and so there’s better opportunity to negotiate on good properties.
8:28: And, and that doesn’t come very often.
8:31: The problem is that when it does come, buyers become very scared.
8:34: They tend to sit on the sidelines waiting for more positive news to come through.
8:39: And then in retrospect they look back and they say, damn, I wish I had moved at that time.
8:44: So just something to keep in mind, in mind, especially for those first home buyers.
8:48: This is your time because property investors are sitting on the sidelines.
8:52: You can buy without that competition that was previously previously there, and that’s of benefit to you.
8:58: There, there’s the other side of it which we, we don’t, we won’t dive into too much now.
9:01: Obviously there’s the commercial side as well.
9:03: And obviously, I mean, we don’t talk about this a lot, I guess, but with streamlined property buyers.
9:08: You know, we do help obviously the, the investors, the whether it’s residential, commercial and obviously home buyers being local on the ground here in Brisbane, so there’s also that play in that as well, where people can look at that sort of things.
9:21: If we jump back to the resi side of things, so obviously listings across Brisbane, we’ve, we’ve seen a bit of an increase as well.
9:28: Yeah, what’s interesting is that the number of properties available for sale has increased, certainly compared to 12 months ago, we’re 13.6% higher in terms of the total number of rather the, the total advertised.
9:41: Listings available, so buyers have more choice right now.
9:45: What is interesting though is that a lot of the listing volume increase is coming from old stock, that is the stock that’s been listed for sale but not yet sold, and this is a response to, a decline in buyer demand.
9:59: So we’re not necessarily, Necessarily seeing a huge spike across the board, generally speaking, in all listings throughout the city.
10:07: There are some areas where we’re seeing a sharp spike, and, and we’ve talked about that in a, in a recent episode on this podcast.
10:14: But generally speaking, it’s the old stock that’s contributing to that, that supply.
10:19: So what that means is that Days on market is increasing, simply because the buyer demand has dropped off.
10:26: And I think it also depends on location as well.
10:29: I mean, we look at different areas and different locations, and, and it really does vary quite a bit as well, the type of property, how it’s presented as well.
10:37: I mean, you, you, your well presented family homes are still very desirable, and they’re still, we’re still getting good results on those properties as well.
10:44: Yeah, I will say that different segments of the market, different product.
10:48: are all doing slightly different things.
10:50: So what’s interesting about our team has been out and about since the federal budget, every Saturday, and we have been monitoring what’s actually happening in the market.
11:00: How many people are turning up to different open homes.
11:03: And for some properties, we’re seeing only 1 or 2 people, but for other properties, we are still seeing 10 or 12 groups through.
11:10: Some properties are sitting on the market for a number of weeks.
11:14: Other properties.
11:15: Still selling fairly quickly, and they are still selling with multiple offers.
11:20: Now previously, whereas we may have had 10 offers on a property, we may only be seeing 2 or 3 offers under a multiple offer scenario, but it is still happening.
11:30: I also just want to touch on auction clearance rates.
11:33: Yes, the auction clearance rates in Brisbane have fallen sharply.
11:37: Now, that’s often a sign of the expectations between sellers.
11:41: And buyers actually growing further apart, so what I mean by that is, even though there may be willing buyers turning up to an auction, if those buyers are not meeting the expectations of the sellers, the property passes in and it becomes a passed in property, not a sale.
11:59: So we are seeing for quality properties, sellers are simply not moving on price.
12:04: We are seeing some sellers remove properties from the market.
12:08: And we’re also in our conversations with selling agents hearing that there are a number of sellers that simply are not going to be bringing their properties to the market at this time where the uncertainty exists because sellers also want to achieve the best possible price for their property.
12:23: Yeah, so I, I think.
12:24: I think in general, you could pretty much say then that the, you know, the, the confidence.
12:29: So when you’re looking at consumer confidence side of things, that’s the bit where people are still a bit pessimistic on it.
12:35: We’re not sure obviously then with interest rates, what’s going to happen on that side of things.
12:38: So, I think, I think the big, Factor behind everything, when we look at the, as you touched on the auction clearance rates, the amount of properties that are coming, what is actually selling, There’s the difference between, obviously, the, the confidence of the sellers.
12:53: People still want the high amount that they’re selling their property for, and buyers are thinking, Well, I’m not sure what’s happening in the market.
12:59: They’re a bit unsure.
13:00: So they’re just sort of staying low and just sort of sitting tight to say, Well, I’m not going to go and offer a large amount for it, I guess.
13:06: But the vendor’s expectations are still at that market.
13:09: So, I think it, I think it will take time to correct itself and to see what happens with people there.
13:15: as I said, there’s opportunity for home buyers.
13:16: I in certain locations.
13:19: But it’s a little bit uncertain, as we touched on earlier, about the amount of people we’re seeing at open homes and at auctions.
13:26: It, it, there’s no consistency in it.
13:28: I guess that’s probably the big thing.
13:29: That’s probably a great way to describe it.
13:30: There really is no consistency in it, and you need to be out and about observing what is happening in the specific location you’re looking to buy, to really understand that micro market, because Brisbane is not a single property market.
13:43: And although sentiment is weak, buying conditions have actually improved and for well prepared purchases, there is an advantage in the current market to be ready to buy when the right property presents itself.
13:56: So do not assume that the Brisbane market has slowed down completely across all product types, across all locations and across all price points.
14:04: That’s simply not the case.
14:06: We are seeing that in some pockets, in some price points, and in some segments of the market, but it’s not a uniform approach.
14:12: It’s back to what we would consider a more normal market or transitioning into a more normal market.
14:17: So let’s jump into some dwelling values, if you like.
14:20: So with Brisbane, obviously we’ve seen an increase of 0.3% in the month, quarterly, 1.3%. Median values, 1,118,306,000.
14:31: So annually we’re sitting at 7 17.4% increase there, and that’s in all dwelling values across Greater Brisbane.
14:37: So that is the totality data.
14:39: One thing I do want to actually highlight is the fact that prop track data for the month of June actually told a contradictory story.
14:47: They reported that dwelling prices fell 0.2% across Brisbane.
14:52: So it’s just a reminder to everyone that different methodologies can produce different signals from the same market.
14:59: We always discuss totality data.
15:02: It was formerly CoreLogic for the whole period that this podcast.
15:06: Has been running, we have referenced totality data, but we also like to just report on the fact that there are other data sets out there, and we just wanted to highlight that this month Prop track has shown that slight negative trend as well.
15:19: Different segments in the market, and we do talk about this as well.
15:23: So we’re still seeing that lower section increase the most, obviously, and the higher part of the market is not as high.
15:29: So higher part, sitting at 2.2%, and the lower part of, yeah, and the lower part.
15:34: 4.8%. So that’s the quarterly growth figures across all dwellings.
15:39: So it does incorporate both houses and units into the one data set.
15:42: 4.8% at the more affordable end of the market, 2.2% growth at the more expensive end of the market, with the middle segment of the market growing 3.9%. So we’re starting to see a slowdown across all segments of the market in Brisbane.
15:58: It’s not just a slowdown led by the top end only.
16:02: So, house values, and if we break it down now, house values, unit values.
16:06: So Brisbane house values are 0.2% in June, according to core totality.
16:12: I was going to say core logic again, it’s been a while.
16:14: So median house values now sitting at $1,225,350.
16:20: Quarterly growth eased to 1.1% from 3.3%. Annual growth has slowed to 16.8% from 18.6%. The previous month.
16:32: Yeah, the thing to take from this data is the fact that the rate of growth or the magnitude of growth is slowing, and that’s reported in those quarterly growth figures, easing from 3.3% quarterly growth to 1.1%. That’s a big shift and a big change, but the fact is we are still in a market that is not falling in value based on settled sales data at this point in time, despite what national news headlines might be saying about the Australian property market.
17:00: Brisbane.
17:00: is bucking the trend.
17:02: Compare Brisbane to the likes of, for example, Sydney, it declined-1.5% in a single month, and Melbourne declined-1.3% in a single month.
17:13: And that’s just in the housing market.
17:15: We also saw Canberra fall away-0.7% over the month of June.
17:22: So we are in times where different capital city markets are doing very different things at the same time, regardless of the broader.
17:30: Macroeconomic conditions, it’s those micro supply and demand metrics that are having the greatest impact on what’s happening to property values.
17:39: And the unit market.
17:40: So the unit market for the month of June, as we’re reporting on.
17:44: So unit values increased 0.6% to the median value of $885,132.
17:53: Only marginally higher, obviously than May, which was 884,881.
17:58: Quarterly growth slowed.
18:00: To 2.2% from 4.1%, and annual growth eased to 20.3% from 21.8%. Also, as you said, very similar.
18:11: Sydney, we saw 0.6%, Melbourne,-0.4%., but Brisbane, yeah, it’s an increase of 0.6% for the unit market.
18:22: Again, just focusing in on that quarterly change.
18:25: So, obviously, 4.1% at the end of May.
18:29: Quarterly growth and that’s dropped to 2.2% in the unit market up to the end of June 1 thing to note is that that’s still double the rate of growth that we’re experiencing in the house market, which you’ll recall over the quarter was 1.1% growth.
18:43: So the unit market here in Brisbane still bucking the trend, still outperforming the housing market, and remember it is a more affordable market segment with the unit value or median value still under that $1 million dollar price point, which is where a lot of those first home buyer incentive.
18:58: To certainly cut out in relation to the the 5% home buyer deposit scheme across our cities.
19:04: So it’s one of the reasons why we’re still seeing ongoing demand in that segment of the market, and we’ve had a lot of investor activity also in the attached dwelling segment.
19:14: So we might see the demand ease depending on how active those first home buyers, first home buyers become in that segment of the market.
19:22: And it’ll be interesting to see what then happens, I think, with the investment side of it.
19:26: So if investors are starting to sit a bit quiet and not get into the investment market as much.
19:31: What will that do to the rental market?
19:33: Now, in the month of June, we’ve seen that go from 0.8% to 0.9%. So still very, very, very tight, the vacancy rates.
19:43: So the rental market is really, really tight.
19:46: Annual house rent growth eased 6.6% in June from 6.7% in May, while the unit rent growth slowed 5.8% from 6.2%. So Very tight, it’ll be interesting to see what changes happen there if the investors do slow down, what’s coming to the market for people to rent, because still people still want to rent properties, and what will happen on that side of it.
20:09: Gross shields on that side of it then held steady, 3.1% for houses, and 3.9% for units.
20:17: So that’s really unchanged from one month prior, but the, The point in in this data to to keep in mind is that both house rents and unit rents are growing at a much faster rate annually than the rate of inflation.
20:29: So tenants will be feeling the pinch when their tenancy renewals do become available for renewal.
20:36: This is a result of an undersupply of rental properties with vacancy rates so tight, it’s likely we’re going to continue to see those.
20:43: House and unit rents increase across the city, and time will tell whether fewer investors in the market, creating more supply is going to impact that vacancy rate and then potentially also impact on house rents and unit rents as well, but it’s too early to tell whether that policy change has had a real impact on, on rental and or rental value.
21:07: Before we get into the summary, I, I do always have to do my weather update.
21:10: And it’s actually quite blue sky and warm over here in, in Portugal.
21:13: I know it’s cold back in Australia in winter, but we, it’s one thing we are enjoying at the moment is a bit of a warm summer over here in Europe.
21:20: it won’t be long, and we’re going to be back at Brisbane.
21:22: We’ll be saying it’s freezing cold, even though it’s probably not that bad at all.
21:26: But yeah, look, I think as a summary for the market, People are cautious, people are a bit uncertain.
21:31: And I think there’s just a few people that are sitting on the fence, I guess, unsure of what to do and when to do it.
21:38: understand what sort of setup and entity they like to buy in.
21:41: But as we’ve said, the fundamentals are all there for Brisbane.
21:44: I think things will settle down as well, and, and we’ll see people back in the market and moving ahead.
21:49: I’m actually going to call this more of a cyclical shift based on sentiment rather than evidence that the city’s long-term fundamental.
21:58: Have materially changed because in reality they haven’t.
22:01: We’ve been reading a lot of information about the fact that with self-managed superannuation funds now not able to invest in residential property due to, I guess, the, the inability to borrow money in a limited recourse borrowing capacity arrangement through that self-managed super fund now.
22:22: We’re going to see some developers who ordinarily rely.
22:26: Upon those self-managed super fund buyers to buy off the plan to start projects, we’re going to see some developers struggle to actually find those buyers to, I guess, qualify for the number of pre-sales that they need to get projects out of the ground.
22:40: So this could further impede future supply, which is not the intent of the budget.
22:45: Keep that in mind as I deliver that information.
22:48: I, I think the, the other thing is home buyers.
22:51: I, I think that’s probably one thing, as we’ve touched on earlier.
22:54: There’s opportunity for home buyers out there.
22:56: I, I think whilst that pressure’s not there for as many investors, I think there is opportunity for home buyers, definitely.
23:02: So, if you’re a home buyer out there and you want some local experts on the ground, reach out to the team at Streamline Property Buyers, we’re here to help.
23:09: And we, we know Brisbane like the back of our hands.
23:12: So it’s our little backyard, and we’re, we’re here to help people on that side of things as well.
23:16: Absolutely.
23:17: And a lot of people are asking what’s going to happen in the months ahead?
23:20: What, what’s going to happen to property prices.
23:22: Now, you know, if you’re buying a property today and you have to sell that property 6 or 12 months from now, is that property likely to lose value?
23:30: Fundamentally, I don’t think that the answer to that is yes.
23:34: I think what we may see, if we see median values track backwards, it may be the result of what is selling more so than anything else, because we’re seeing so many buyers hold firm on price.
23:46: I beg your pardon, we’re seeing so many sellers hold firm on price.
23:49: So even good properties.
23:50: Properties where we see opportunity to negotiate because we’re representing a buyer, we’re not seeing that same motivation from sellers who are willing to meet a motivated buyer’s price.
24:01: So because of that, properties do not transact and they don’t become part of the sale process.
24:07: Where there’s opportunity right now in Brisbane is where there is motivation to sell, where sellers do have a time frame in which they do need to offload their properties, and they.
24:18: There may be limited buyer demand at a time where you’ve got a motivated seller, that’s where the opportunity sits.
24:24: And if you can find something that sits in that sweet spot, you might actually be delighted with your purchase, 1218, or even, you know, 24 months from now, because I see that there’s going to be those types of buying opportunities across the city, and if you’re in a position ready to act quickly when those opportunities become available, I think that you can only benefit from that over the long-term.
24:47: Perfect.
24:47: Well, that’s another market update from the team, as at the Brisbane, the Brisbane Property podcast.
24:52: We hope you’ve enjoyed that.
24:53: I know that the audio and the visual sort of thing, it might not be at the quality that we normally produce, but I’m sure everyone will understand, and we’ll be back to the normal podcasts for you in the, in the future as well.
25:04: So, as norm, as I usually do, I will let Melinda wrap things up.
25:08: Take care, until the next time we, we chat, take care and bye for now.
25:12: Thank you once again.
25:12: Again for joining us on this episode of the Brisbane Property Podcast, all the way from Portugal over in Europe.
25:19: We hope you’ve enjoyed this market update, as always, please subscribe to the channel if you’re watching on YouTube, or you can leave us a review on your favorite podcast player.
25:27: We hope you continue to share episodes like this with friends and family who you think could benefit from hearing this information.
25:34: Until next time, we hope you have a good couple of weeks, and we’ll speak to you again soon.
25:38: Bye for now.