The Urban Developer’s latest Brisbane housing market insights reveals that the city’s house prices have increased by a staggering 32 per cent in the past 12 months.
This resource, updated periodically, will collate and examine the economic levers pushing and pulling Brisbane’s housing market.
Combining market research, rolling indices and expert market opinion, this evolving hub will act as a pulse check for those wanting to take a closer look at the movements across the market.
^Source: Corelogic - March 2022
Brisbane had another bumper start to the year for both houses and apartment prices, while the markets in Sydney and Melbourne were on the way down.
Dwelling prices kept increasing at a steady pace up 7.2 per cent for the quarter to March, the fastest rate of any capital city.
Although the pace of price growth was slower than 2021, there were no signs property values would drop as increased interstate migration, low stock and heightened demand were expected to continue.
Brisbane’s house prices have increased by a staggering 32.1 per cent in the past 12 months, with the median price now $856,731.
Across all suburbs in Brisbane, not one has seen a drop in quarterly or annual prices for houses, while unit prices have dropped by less than -1 per cent in some places.
Overall, apartment price growth was up on 2021 levels, increasing at 14.4 per cent in the year to March, this compared to 12.7 per cent in the year to December.
According to Corelogic, a typical Brisbane house is about $47,000 more expensive than it was at the beginning of January, while units were up $21,000.
However these properties were providing sellers with a gross yield of 3.4 and 4.8 per cent respectively, making apartments a better prospect for investors.
Favourable conditions have been forecast for Australia’s smaller cities including Brisbane in the year to come, due to comparative affordability and a lack of supply.
Meanwhile the 2032 Brisbane Olympics are expected to push prices higher in the next decade.
This will be supported by new infrastructure including those signed off in the $1.8 billion south-east Queensland City Deal.
Nine new train stations between Ipswich and Springfield are planned along with multiple residential growth areas to address housing supply issues.
Despite recent flooding in the region Brisbane suburbs including Rocklea and Fairfield saw an average increase in land valuations by more than 20 per cent in the latest State Government assessment.
This compared to the 2011 floods, where affected regions plummeted 15.6 per cent while unaffected areas increased between 18.2 and 34.5 per cent.
Rail, growth areas signed off in $1.8bn SEQ City Deal
Nine new train stations, residential growth areas and a $450 million interchange next to the Gabba Olympic Stadium are south-east Queensland’s top priorities, according to the latest city deal.
Rail connectivity was a major component of the plans with the $450-million Brisbane Metro Woolloongabba Station at the heart of the city deal.
While the city deal was for the wider region, other Brisbane based projects included the $190.2-million Kangaroo Point Green Bridge, $40.5-million Brisbane Valley Highway upgrades, $3-million First Nations Cultural Centre business case and a $1-million transport study for South Bank.
Housing stress bites
Concerns are continuing to mount for housing affordability across the country particularly for renters in Brisbane.
Brisbane lord mayor Adrian Schrinner called on the state government to commit a third of the 2000 apartments planned for the new Olympics precinct to affordable housing to address the issue.
The Property Council of Australia also found federal electorates in Bowman, Forde, Wright, Petrie and Oxley were experiencing the highest levels of housing stress.
Olympics to push Brisbane market’s limits
Brisbane house prices could more than double by the time the 2032 Olympic Games roll around, taking median home values above $1.4 million, economists predict.
The growth rate would be consistent with the market’s past performance during the G20 summit in 2014 in Brisbane, when dwelling prices surged 112.7 per cent over 12 years from when the event was announced in 2003 to 2015, a year after it was held.
Head of Research
“Brisbane dwelling values continue to see strong capital growth, with values seeing a further 2 per cent in the month of March, despite the shock of recent flooding events.
“Sales and rental listings declined over the month, but it is difficult to isolate the impact of flooding from a usual seasonal slowdown in transaction activity.
“South East Queensland more broadly has benefitted from strong interstate migration flows over the course of the pandemic period, where housing demand has seen upwards pressure from those in the southern states moving to the sunshine state, as well as fewer moves away from Queensland through the pandemic.
“While growth rates have eased from a peak late last year, Brisbane is expected to remain a relatively resilient market amid potentially higher interest rates.”
“After 22 per cent growth in national average home prices last year, average home price growth this year is expected to be around 1 per cent and we expect a 5 to 10 per cent decline in average prices in 2023.
“Top to bottom the fall in prices into 2024 is likely to be around -10 to 15 per cent, which would take average prices back to the levels of around April last year.
“This is likely to mask a continuing wide divergence though: Sydney and Melbourne already look to have peaked; but laggard cities like Brisbane and Adelaide and possibly Perth and Darwin which are less constrained by poor affordability are likely to be relatively stronger this year with gains likely to persist into the second half of the year.”
“We’re experiencing the perfect storm of low housing supply levels, incredibly high interstate and intrastate migration particularly to our regions, longer length tenancies as tenants choose to stay put for greater security and certainty, and less shared tenancies as people want more space now they’re working from home.
“Demand for rental properties in Queensland will continue to rise along with the rising population and that growing population needs a roof over its head.
“Queensland needs additional housing supply to ease these tight conditions and accommodate the masses relocating to the state, and this supply simply can’t come soon enough.”
“When I consider the current election stances for the major and minor parties, there is a dearth of specific policy in addressing the issues surrounding housing affordability.
“Clearly, we are not going to resolve this overnight, but I do hope the various state and territory governments will ramp up their rental assistance packages in order to cushion the rental accommodation emergency we have here and now.”
ANZ has tipped house prices to jump by 9 per cent this year in Brisbane before falling by 4 per cent in 2023 as the post-pandemic boom cools.
CBA now expects Brisbane house prices to increase by 9 per cent this year before plunging by 8 per cent in 2023 when the Reserve Bank ramps up interest rates.
NAB is forecasting Brisbane house prices to rise by 5 per cent during 2022 as impact of low rates and strong income support begin to fade.
Westpac updated its property forecasts, with Brisbane real estate prices tipped to surge 10 per cent in 2022 before dialling back -1 per cent in 2023.
|Week||Clearance rate||Total Auctions|
|Week ending 5 March 2022||42%||92|
|Week ending 12 March 2022||53%||106|
|Week ending 19 March 2022||69%||75|
|Week ending 26 March 2022||64%||99|
^Source: Corelogic — March 2022
Brisbane’s auction market is currently red-hot with the proportion of sales by auctions tripling in the past ten years.
There was an upswing in the proportion of homes sold by auction from around 3 per cent between 2007 to 2020 to 6 per cent according to Domain.
However Brisbane still has the lowest percentage of auctions in comparison to Melbourne, Sydney, Canberra and Adelaide.
Since the end of 2021 the auction clearance rate has fallen steadily, in November the clearance rate was at its highest point 80.4 per cent and has since dropped to 57 per cent in March.
Meanwhile the total number of auctions remained elevated from 410 to 372 reported in the same period.
Some of Brisbane’s most active auction markets currently include Indooroopilly, East Brisbane, Everton Hills, Stafford, Carindale and Red Hill, after nearly 40 suburbs in greater Brisbane recorded house price growth of more than 30 per cent last year.
The floods at the end of February and beginning of March however have taken some steam out of the market with the city’s auction clearance rate for March just 57 per cent, a significant drop from a month earlier when it hit a record 75 per cent, after thousands of homes were inundated.
Domain chief of research and economics Nicola Powell said the floods had been a reset for buyers and sellers to wait a while.
“In the last weekend of March we saw the highest number of auctions scheduled so far this year, however, we did see over a quarter of auctions withdrawn, perhaps reflecting how the recent floods delayed or changed decisions for some sellers.
“It’s very telling of the sentiment in the city. Decisions may have been changed or delayed.”
The most expensive homes sold at auction in Brisbane in recent months included a four-bedroom house in Wilston which sold for $3.33 million and a five-bedroom house in Bardon which sold for $3.17 million.
On the other end of the spectrum, the most affordable homes were a three-bedroom townhouse in Mount Gravatt East which sold for $535,000 at auction along with a two-bedroom unit in New Farm for $420,000.
|City||Vacancy rate||Monthly % change||Vacancies||Net change|
^Source: SQM Research - March 2022
Brisbane is recording the largest 12 month combined rental increase with asking rents jumping 15.2 per cent.
However, the city's tenants are now facing a worsening rental crisis, with competition for homes soaring as the proportion of vacant rental properties falls to its lowest level in years.
Inner Brisbane, which recorded a vacancy rate of 1.5 per cent, had one of the largest monthly falls of the capital city regions as did areas such as Indooroopilly, Sherwood, Nathan and Salisbury.
Rental demand had risen as Brisbane attracted more interstate arrivals and rapidly rising property prices left more aspiring homeowners renting for longer.
The recent floods have also further exacerbated the rental shortage in some markets.
Over the past quarter, Brisbane’s record-breaking streak continued, with house and unit rents rapidly rising to new record highs.
Bucking the national trend, house rents continued to increase at 4.2 per cent over the last quarter at almost twice the pace of units, which recorded 2.4 per cent growth.
It now costs a median price of $500 per week to rent a house in Brisbane and $430 for a unit.
This trend is likely to continue as Queensland recorded the strongest population growth of all the states, driven by interstate migration from young families seeking better affordability, lifestyle change, work-life balance, and the expanding job market in Queensland.
Brisbane, which has boomed during the pandemic from a surge in interstate migrants which saw its vacancy drop to 0.7 per cent in March with just 2400 properties available.
Residential vacancy in Queensland’s capital has been on a general decline since December 2016 when the rate was at 4.1 per cent. The last time vacancy rates in Brisbane were lower was in 2006 at 0.8 per cent.
|Type||Rent||Monthly % change||Annual % change|
^Source: SQM Research - March 2022
House rents across Brisbane have soared to a record high of $590 a week, the steepest annual increase in the city’s history.
According to SQM Research, rent prices for a house in Brisbane jumped 26 per cent—or $122—in the 12 months to March, and 6 per cent for the quarter, as experts warn the Sunshine State capital could be heading for a rental crisis.
It’s particularly tough in Brisbane with Queensland seeing the strongest rate of population growth, with people coming from Victoria and NSW, as well as the people displaced by the floods having to enter the rental market.
Unit rents in Brisbane have also risen to a record high of $416 a week, the steepest annual increase in 13 years.
Low stock, delayed development and interstate migration continue to throw fuel on the city’s rental fire, and industry insiders say the latest price rises will not be the last.
Houses across Brisbane East had the biggest annual rent rise of 18.8 per cent, sending median weekly rents to an unprecedented $570.
In Moreton Bay South, house rents jumped 15.1 per cent to $495 a week, while, in Logan, Beaudesert house rents climbed 15.8 per cent to $440.
The highest performing suburb was Ascot, where house rents surged by 25.9 per cent to a staggering $850 a week.
|Dwelling||Approved||Monthly % change|
^Source: Australian Bureau of Statistics - February 2022
Australia’s new home building boom is set to continue well into 2023, with about 190,000 homes—including 121,000 houses—tipped to be built nationally this year.
Approximately 25,000 new houses and 18,000 units will be constructed in Queensland in 2022, according to the Housing Industry Association.
Brisbane’s house building construction costs, however, increased by 8 per cent across 2021.
Over the first quarter of 2022 it has however recorded the lowest quarterly increase in construction costs at 2.2 per cent, while South Australia saw the highest quarterly growth 2.5 per cent.
New South Wales, Victoria and Western Australia each rose 2.4 per cent, in line with the national growth rate.
Corelogic research director Tim Lawless said the annual change in construction costs is approaching double digits, with the impact multi-layered.
“Construction cost growth adds a further element of uncertainty to new building projects and renovations as well as inflationary pressures to the economy,” Lawless said.
“While the most obvious impact from high residential building costs are with builders, new home buyers and renovators, another important consideration is the sum insured by home owners.
“With construction costs up more than 25 per cent. over the past five years, it’s important for home owners to reassess their insurance terms and make sure they are adequately covered should they need to make a claim.”
|Type||Lending ($bn)||Monthly % change|
|New loan commitments for owner occupier housing||4.02||5.0%▲|
|New loan commitments for investor housing||2.21||4.9%▲|
^Source: Australian Bureau of Statistics - February 2022
New home loans fell by 3.7 per cent month-on-month in February with a decline in owner-occupier housing lending by 4.7 per cent, according to ABS data.
Lending for new home buyers declined the most, by -7.2 per cent, lending for new home builds grew, by 3.1 per cent, owner-occupier lending for existing housing fell, by-6.2 per cent, and investor lending declined, by -1.8 per cent, for the first time since October 2020.
Home lending fell in Queensland by -2.9 per cent.
Investor lending is up year-on-year by 55 per cent, with ANZ predicting that rising immigration will support it in the short term.
First home buyer lending continued to decline by 9.7 per cent month-on-month and 29 per cent year-on-year.
Business construction lending declined by 40.2 per cent in February, and is down 9.4 per cent on a year ago.
The rise in inflation has likely brought forward the timing of an increase in the cash rate, the Reserve Bank of Australia has warned.
Capital Economics economist Ben Udy predicted that the slowdown in house price growth will turn into a decline.
“We still expect price growth to slow sharply in 2022 and we think that slowdown will turn to outright declines in the eight capital cities before long,” Udy said.
“We think the RBA will begin hiking interest rates from June [and] that will increase mortgage rates and reduce affordability, which is starting to look stretched.”
CBA head of economics Gareth Aird said that while higher interest rates would affect house prices, there would be a lag.
“The cash rate is forecast to lift in June 2022 because the economy will be at full employment and annual wages growth will be on an accelerating path to the desired level of 3 per cent,” Aird said.
“Stronger wages growth will provide a partial offset to rising interest rates on the property market.”
As we head into the next election, both the Labor party and the Coalition have also included some expansion of the First Home Loan Deposit Scheme in their policy platforms.
Labor has proposed a First Home Buyer Support Scheme, which will review price caps on a six-monthly basis, and extend 10,000 government guarantees to regional Australian applicants.
The Coalition would also reserve 10,000 home loan guarantees for regional Australians, but would expand eligibility in the regions to non-first homebuyers, and limit purchases to new homes.
The Coalition would also increase the current 10,000 regular FHLDS places to 35,000 per year. The family home guarantee would also be increased to 5000 places per year, creating a total of 50,000 new low-deposit guarantees in 2022 alone.
^Source: Australian Bureau of Statistics - March 2021 (series paused due to Medicare data issues)
Interstate migration into Queensland, growing at its fastest rate since late 2003, has remained a tailwind for housing demand.
Brisbane’s population grew by 1.9 per cent during 2019-20, recording the highest growth rate of all capital cities, according to Australian Bureau of Statistics data.
Queensland gained the most people, about 7000, from net interstate migration over the March 2021 quarter, while Victoria lost the most at almost 5000, followed closely by NSW at 4500 people.
In the March 2020 quarter, Queensland recorded the most arrivals across the country at 24,000.
The state also recorded the highest arrivals again in March this year, at 28,500.
Queensland’s population is expected to surge by more than a quarter of a million people in the next four years according to forecasts in the federal budget, as people flood in from other states.
Treasury boffins have predicted Queensland is set to gain around 20,000 people from interstate each year for the next four years—amounting to almost 85,000 new residents by mid-2025.
Next year alone, federal treasury estimates see Queensland gaining 23,800 new interstate residents, while Victoria is set to lose 1200 and New South Wales is tipped to shed as many as 15,500.
With a population of roughly 3.7 million, Queensland’s southeast is Australia’s fastest-growing zone.
Queensland’s population is predicted to hit 5.44 million by mid-2025, up from 5.17 million as of June 2020.