Brissie and parts of the Sunshine state continue to tempt Sydnesiders and Melbournians with cheaper property, bigger blocks and lower density living - as well as Queensland’s most famous commodity - the weather.
So it’s no wonder that property prices continue to advance at a steady rate over February, much as they did last month, when Brisbane’s market rose a respectable +0.9 per cent.
These monthly gains fall against a backdrop of a resurgent national market, with CoreLogic reporting a jump in home values of +2.1 per cent over February - the largest month-on-month change since August 2003.
Looking at CoreLogic’s combined annual growth trend for regional areas, this is +9.4 per cent higher than the combined capital city index, which only grew +2.6 per cent over the same timeframe.
But, are there other factors at play?
You can also thank record low interest rates, an improving economy, government spending and a relative shortage of properties for sale. All this translates into a mini property boom, some of which is down to the demand for regional lifestyle homes - call them COVID boltholes if you will.
With the national overview covered let's take a closer look at how Brisbane and regional markets in the Sunshine state performed over February.
Brisbane market update - February 2021
Overall property values in Brisbane advanced +1.5 per cent in February, which means this market is up +3.5 per cent for the quarter, +5.0 per cent for the YTD with a median dwelling value of $535,618.
These figures don’t create an accurate picture of what is happening on the ground as buyer demand continues to outstrip supply.
Data from Domain recorded a spike in prospective buyers attending open houses in Brisbane, with a rise of +69.4 per cent over January. There were also, +43.9 per cent more people at open homes than during the same timeframe last year.
Clearance rates for Brisbane are also in healthy territory, with CoreLogic reporting a rate of 74.2 per cent for the week ending 21 February 2021.
Data from Domain recorded a spike in prospective buyers attending open houses in Brisbane, with a rise of +69.4 per cent over January
Premier property agents Knight Frank’s Wealth Report 2021 also picked up on the uptick in Brisbane and the Gold Coast, with the upper quartile in both cities outperforming Sydney and Melbourne over 2020.
CoreLogic confirms the general trend with sales data indicating capital city values are up +4.1 per cent for prestige homes over the recent quarter, with the lower quartile lagging behind with a +3.2 per cent rise.
Regional Victoria market update
Regional markets in Queensland continue to fire on all cylinders, outperforming metro postcodes, up +1.9 per cent over the month. This takes them to +5.0 per cent for the quarter, +9 per cent over the past year with a median price of $421,432.
Regional markets in Queensland rose +5.0 per cent over the recent quarter, up +9 per cent over the past year for a median price of $421,432
Units price growth was back on level terms with houses, both up +1.9 per cent over the month. With the median house price in regional Queensland at $432,348, affordability continues to drive interstate migration - with CoreLogic highlighting that migration to the state was up 90 per cent in 2020.
Queensland rental market update
SQM Research reports that Brisbane’s vacancy rate tightened to 1.7 per cent over January 2021, down from 2.4 per cent a year ago. This figure does rise to 3.3 per cent if you drill down to the CBD, but in the six months to December 2020, rental vacancies were close to 5 per cent for the city centre.
SQM Research reports that Brisbane’s vacancy rate tightened to 1.7 per cent over January 2021, down from 2.4 per cent a year ago
Asking rents for houses in Brisbane are currently $478, which is +1.3 per cent higher than a year ago. Unit asking rents are $381 which is also marginally up +0.6 per cent year on year.
This is in line with the nationwide trend, with capital city average asking rents up +0.7 per cent in February for houses and units.
The outlook for 2021
So what does all this mean for this market as we move into 2021? Let’s see what property experts and financial institutions think.
Overall CoreLogic is positive, indicating that the property market is on, ‘...a firm footing, setting the scene for further price rises throughout the year’.
Their outlook highlights:
Increased buyer activity
An Australian economy in recovery
A decrease in mortgage repayment deferrals
Low interest rates that continue to support the housing market recovery
SQM Research is similarly optimistic, pointing out that, ‘new property listings were up 4.3 per cent nationally over January, with most cities recording year-on-year rises’. They also believe that the, ‘...shortage of stock in capital-city real estate markets was being driven by increased buyer demand rather than any significant drop in new listings’.
Looking to the medium term (2022 and 2023), Westpac Bank recently updated its property forecasts, tipping Brisbane prices to rise +20 per cent.
Michael Yardney, analyst and property commentator from PropertyUpdate agrees, indicating that, “Brisbane is likely to be the one of the best performing property markets over the next few years, while some locations in Brisbane have strong growth potential, and the right properties in these locations will make great long term investments, certain submarkets should be avoided like the plague;”
The latter areas he is referring to include inner-city apartment towers which investors have deserted, and where structural issues with the buildings are cause for concern.
The overriding theme is a positive outlook for this market, though CoreLogic does sound a word of caution - reminding us that a major resurgence or outbreak of the virus could derail all of the above.