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This article explores what the seasonal trends are in Brisbane property prices and the causes for these differences.  Research has suggested that the most expensive month to buy in Brisbane is January with 0.5% to 0.78% increase in house prices due to seasonality changes.

graph of rental yields to determine where to buy an investment propertyThis has been broadly attributed to the alignment with the start of the new school year and the commencement of public service contracts (especially in education) and the end of the summer holiday period. Others have maintained that often decisions about moving are made during the Christmas break, so listings increase soon after.

But it could be argued that local drivers of supply and demand may be different this year as we have been experiencing very low listing volumes over recent months, and this has already been limiting the supply side of things throughout the spring season.

To get an understanding of what is happening in terms of supply and demand locally, I provide the following commentary…

Throughout 2019, Brisbane has been coming out of a period of oversupply in the inner city unit market, which dampened property values in the medium to high rise unit space and also caused a softening of rental returns and higher vacancy rates in all properties close to the CBD as discussed previously.  More recently we are seeing a return to growth in rental returns throughout Brisbane and vacancy rates tightening due to most of that apartment stock being absorbed due largely to accelerating population growth over recent times.

In the sales area, we have had very low listing volumes for several months and there has certainly been a growing trend of a lack of quality properties available in certain locations throughout the city – putting a limit on the supply available. Since mid-2019, however, there have been a growing number of buyers driven by both local and interstate interest, increasing the demand for properties and starting to push prices up in some locations around the city.

There are examples at auctions we have attended where there were 19 and 21 registered bidders in two locations (one south-side and one northside) in November – illustrating the huge buyer demand for quality properties in desirable locations throughout our city.

Going into 2020, construction commencements are down so new supply will continue to be limited in the foreseeable future.

Sales Agents are more optimistic about new listings early in 2020, so we are hopeful that we see more sellers providing their homes for sale in the new year which might have a more immediate impact on supply in line with the findings in relation to seasonal trends – but that is yet to be confirmed. It seems many Brisbanites are holding on to their properties – a reflection of an increase in the number of years property owners tend to own a property before selling on.

In terms of the First home loan deposit scheme available for first home buyers from 1 January 2020, in Brisbane only properties valued up to $475,000 will be eligible and this will most likely push any of those buyers into LGA outside of the Brisbane City Shire if they are considering a house on a block of land, or alternatively, it will enable a purchase in an inner city or inner ring suburb apartment or a townhouse in a middle ring suburb.

I’m unsure if we are likely to see any significant change in the demand for property as a result of this scheme due to its limit to 10,000 borrowers – but I guess time will tell.
From our own internal enquiry we are certainly seeing a spike in interstate investment interest in the Brisbane market driven largely by our affordability and desirable rental yields. There seems to be a lot of optimism around Brisbane – and has been for some time.

Time will tell what will eventually unfold in terms of Brisbane property prices. In the meantime, we have a seller’s market in Brisbane where there are a lot more buyers then there are sellers. This is likely to have a positive effect of price growth unless we see more sellers bring their properties to the market to level out the supply and demand equation.

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