By Michael Yardney, March 23, 2024
Key takeaways
- Brisbane continues to be one of Australia’s strongest capital city housing markets and is likely to remain so throughout 2024, with dwelling values continuing to go from strength to strength.
- Brisbane's housing market skyrocketed over the last few years with 53.5% price growth since the onset of COVID-19 and is currently at a new peak in price.
- Like everywhere else in the country, Brisbane’s rental market is in crisis with historically low vacancy rates and skyrocketing rents.
- At the same time, demand for apartments is likely to remain softer, but more and more Queenslanders are turning to townhouses in Brisbane's inner suburbs as a preferred style of accommodation.
- ANZ Bank forecasts a 9-10% property price rise in Brisbane in 2024.
Are you wondering what's ahead for the Brisbane property market in 2024?
Brisbane continues to be one of Australia’s strongest capital city housing markets and is likely to remain so throughout 2024, with dwelling values continuing to go from strength to strength.
Brisbane's housing market skyrocketed over the last few years with 53.5% price growth since the onset of COVID-19 and is currently at a new peak in price.
This remarkable growth has pushed up the city’s median home value to be higher than that of Melbourne.
Here is the latest data on the median property prices for Brisbane.
Brisbane’s property markets update
Despite more homes being listed for sale and rising prices making property less affordable, the Brisbane property market is expected to keep steaming ahead in 2024.
A slowdown in construction has hampered the supply of new housing, concentrating demand on existing properties.
Both buyer and seller confidences increased in the early part of this year, with the thought that potential rate cuts could boost borrowing capacity, giving buyers more money to spend.
We’re finding that strategic investors and homebuyers are back actively looking to upgrade, picking the eyes out of the market.
BRISBANE’S RENTAL MARKETS REMAIN EXCEPTIONALLY TIGHT
Dr. Andrew Wilson reports the Brisbane rental markets have commenced 2024 with more tough results for tenants with generally higher rents and continuing near record-low vacancy rates for both houses and units.:
- Brisbane’s vacancy rates for houses is 0.9% with rents rising 9.3% over the last year.
- Brisbane’s vacancy rates for units is 1.0% with rents rising 24.8% over the last year.
Like everywhere else in the country, Brisbane’s rental market is in crisis.
The city has seen significant investment in recent years, and many people have moved to Brisbane to take advantage of job opportunities and high quality of life.
But a migration surge has led to an increased demand for rental properties, which has kept the vacancy rate low.
While the current vacancy rate in Brisbane may be good news for landlords, it only serves to exacerbate the city’s already pressurised rental market with renters increasingly struggling to look for affordable housing.
2024 is unlikely to provide any relief for tenants with new home building levels remaining chronically recessed despite government policies designed to reduce surging migration.
Brisbane’s migration and population growth vs. property prices
Brisbane and Queensland can thank a huge influx of internal migrants for the robustness of their property markets – between the pandemic, lockdowns, and a surging property market many Australians, particularly from Victoria and NSW, flocked northwards to our Sunshine State in search of more affordable property in lifestyle suburbs.
And the lifestyle move is one that still holds true today, having picked up pace throughout 2023.
Popular areas of the Gold Coast and Sunshine Coast have enjoyed strong demand considering the increased flexibility of being able to work from home and commuting to the big smoke less frequently.
Queensland recorded a population growth rate of 2.6% in the 12 months to 30 June 2023, above the national average (2.4%) and third highest among all states and territories - behind Western Australia’s 3.1% increase and Victoria’s 2.7% increase over the same period, according to the latest ABS data.
What sets Queensland apart from the rest, though, is that while the volume of net overseas migration dominates figures (as it does elsewhere in other states)
Queensland’s volume of net interstate migration is significantly higher and made the largest contribution to population growth in Queensland in the 12 months to June 2023.
And there is more forecasted population growth on the horizon.
Federal government forecasts suggest that Queensland’s population is expected to grow by more than 16% by the time Brisbane hosts the Olympic Games in 2032.
And the population spread in Australia’s most decentralised state is tipped to sway towards the city, with most Queenslanders expected to live in Greater Brisbane by the time the Olympic flame is lit at the Gabba.
Greater Brisbane is expected to grow faster than the rest of Queensland, with a rate of 1.9% projected for the capital in 2022-23, compared to 1.4% for the rest of the state.
That means that Queensland’s population is set to boom in the coming decades, from the current 5.4 million people to as much as 8.27 million by 2046.
Brisbane’s fundamentals are very strong
It’s not just Brisbane’s population and migration growth that is holding up the state’s economy, the remainder of the city’s underlying fundamentals are also very strong.
Queensland made history by becoming the best-performing state economy for the first time in January 2023.
The CommSec State of the States report at the time showed that its economy grew at a faster pace than any other state in Australia, thanks to strong population growth, a solid job market, and overseas demand for energy resources, such as coal and natural gas.
It is worth noting that Queensland has the highest underemployment rate and lowest participation rate and employment-to-population ratio across the major eastern states.
And I would argue it has been this job growth that has fuelled record levels of migration because most will not be willing to make a life-changing move unless they have some form of employment on the horizon.
This is something that was sorely missing from the Sunshine State in the first half of the last decade.
Another appeal of Queensland’s property market is that property values still remain low relative to other major cities – and we know affordability is a key driver of migrants into the area.
The median dwelling price for our combined capital cities now sits at $757,746 - Brisbane’s strong growth means its prices sit at a slightly higher $787,217, but that’s still significantly below Sydney’s $1.12 million median and only just surpasses Melbourne’s $780,457 median price.
And the impending 2032 Olympics, hosted by Brisbane, will only serve to put even more pressure on the city.
The need for upgraded infrastructure and transport in Brisbane, the Gold Coast, and the Sunshine Coast will likely put a rocket under Brisbane’s property market.
Why?
Because infrastructure spending is one of the most powerful forces in residential real estate – it can transform local economies and generate real estate booms.
That’s because major infrastructure projects can elevate the appeal of locations by improving the accessibility or amenity of an area and they can also generate economic activity and jobs during construction.
Brisbane’s top performers 2023
And these are the Brisbane and regional Queensland suburbs with the top sales in 2023:
As you can see, Moreton Bay South and Brisbane City dominate the strongest markets for houses and units in Greater Brisbane.
And in regional Queensland, the Gold Coast and Sunshine Coast have seen an impressive volume of sales over the past 12 months.
And the expert consensus is that strong population growth and tight supply will continue to push property prices upwards as we move through this next stage of the property cycle.
Here are some of the most recent expert forecasts to take note of:
- ANZ forecasts a 9-10% property price rise in Brisbane in 2024.
- CBA forecasts a 6% property price rise in Brisbane in 2024.
- NAB forecasts a 6.5% property price rise in Brisbane in 2024.
- Westpac forecasts an 8% property price rise in Brisbane in 2024.
- PropTrack forecasts a 3-6% property price rise in Brisbane in 2024.
Key takeaways
Brisbane continues to be one of Australia’s strongest capital city housing markets and is likely to remain so throughout 2024, with dwelling values continuing to go from strength to strength.
Brisbane's housing market skyrocketed over the last few years with 53.5% price growth since the onset of COVID-19 and is currently at a new peak in price.
Like everywhere else in the country, Brisbane’s rental market is in crisis with historically low vacancy rates and skyrocketing rents.
The strong demand for detached houses in Brisbane, particularly in the inner and middle ring suburbs, and outstanding demand for lifestyle areas, are likely to lead to these locations outperforming cheaper properties in outer suburbs.
At the same time, demand for apartments is likely to remain softer, but more and more Queenslanders are turning to townhouses in Brisbane's inner suburbs as a preferred style of accommodation.
ANZ Bank forecasts a 9-10% property price rise in Brisbane in 2024.
https://propertyupdate.com.au/whats-ahead-brisbanes-property-market/