How did property markets in Brisbane and regional Queensland perform over July?
While these monthly updates are essentially snapshots in time, we can begin to identify trends from them. CoreLogic data shows that property values have fallen nationally by -1.7%
since April, dropping -0.6% over the month. This followed a drop of -0.4% in May and -0.7% in June.
Overall this trend is not a surprise, given the impact of the coronavirus on the property sector and wider economy. Despite numerous doomsday scenarios from, pundits and analysts - including double digit drops in property values, these have not materialised. With so much uncertainty, and speculation in the media, we feel there's a need to focus on the most current data (and facts), so you can use these to help inform your property decisions moving forward. It is also important to point out that every postcode and/or suburb behaves differently, and needs to be analysed individually.
Impacts will vary from postcode to postcode
The first thing one thing should do is look beyond national indices and be mindful they aren't a good reflection of what's happening in your suburb. Any large city or regional centre will have many different markets based on location, price and property type.
A good example of this is Canberra, where values advanced +0.6% in July, while national values dropped -0.6% over the same timeframe. This shows how important it is to get granular and hyperlocal with data, so you can identify trends and track performance in your area.
It’s important to get granular and hyperlocal with data, so you can identify trends and track performance in your area
The advice we are getting from agents on the ground is that properties that are presented well and priced competitively are very likely to perform well in a campaign and achieve a good result.
Let’s now look at the Brisbane market and identify what has happened over the past month.
Here’s what’s happening in the Brisbane property market
A month on from our last property update for Brisbane, and the property market here has slipped ever so slightly over July, down -0.4% overall for a median property value of $502,167.
This brings Brisbane’s market down -0.9% for the quarter, but it is still positive +3.8% for the YTD. This market is still displaying lower volatility than Melbourne or Sydney, which dropped -1.2% and -0.9% over the same timeframe. It is important to note that all capital cities are down over the month, except Adelaide and Canberra.
Brisbane’s property market here has slipped ever so slightly over July, down -0.4% overall for a median property value of $502,167
Units dropped slightly more over the month, -0.5% versus -0.3% for houses. With unemployment rising, tourism on pause and the rental market experiencing rising vacancies, apartment values could fall further.
Here’s what’s happening in the regional Queensland property market
Domain reports that regional markets have been far more resilient than their metro cousins, largely because they are not as dependent on international arrivals and students. This is also true for the Sunshine State, which advanced incrementally +0.1% over the month to finish +4.7% for the YTD.
House price rises were the reason for the gain, with resource-driven towns like Isaac a standout performer in regional Queensland, growing +32.5% in the year to June 2020. Units were flat over the month for an unchanged median value of $366,017.
Our recent Covid-19 market activity update identified a number of areas of regional areas in Queensland with 5-6 weeks of consecutive sales volume increases, specifically the Mackay and Whitsundays.
Brisbane and Queensland rental market update
The rental market in Brisbane continues to be impacted by the drop in domestic and international tourism, as well as the broader national economic slowdown. Owners of short term rental properties have also transitioned these to long term lets, which has led to a rise in available properties.
SQM Research data identified vacancy rates of 2.4% in Brisbane over June, though it must be noted this figure has been as high as 4.1% in Dec 2016.
Regional centres vary quite widely, from the Sunshine Coast at 1.2% to the Gold Coast at 4.1 - a market considerably more exposed to a tourism downturn - and Cairns at 2.4%. Asking rents in Brisbane are also slipping, down -0.3% for houses and -0.1% for the period March 31 to July 31.
Rental specialists Rent.com.au believes that overall, “...a fall in median rents is likely across Australia”, and indicates that government assistance will be critical in alleviating the economic impact on the sector.
What does this mean for the property market and what can you expect in the future?
CoreLogic’s Head of Research, Tim Lawless believes, ‘...housing markets have weathered the COVID storm much better than originally anticipated’, pointing out that the, ‘...decline in home values has been orderly, with only modest reductions in most areas’. This is especially true for Queensland, which has so far avoided the public health crises experienced in Victoria.
CoreLogic’s Head of Research, Tim Lawless believes, ‘...housing markets have weathered the COVID storm much better than originally anticipated’
There is also cause for optimism, with National buyer's agency Propertyology pointing out that major infrastructure projects could have a "significant" influence on property markets across the Sunshine State, specifically the:
- Hells Gate Dam, a $5.3 billion project (Cairns, Townsville)
- Queens Wharf, a $3.6 billion entertainment precinct project (Brisbane's CBD)
- Maroochydore City CBD, a $430 million commercial, retail and medium density residential developments (Maroochydore)
- Australia-Singapore Military Training Hubs: a $2.25 billion investment (Townsville and Rockhampton)
- Inland Rail Project, a $10 billion rail project (Toowoomba)
This is not to say that there are not major concerns for the future, particularly in light of renewed outbreaks of the virus across Victoria and the slowdown in tourism. This has prompted the Real Estate Institute of Queensland (REIQ) to petition the state government to introduce mitigation measures, including a 75% reduction in stamp duty and extending the First Home Buyers Grant to established housing.
If you are thinking of selling your property in Queensland, take the time to research your local market and speak to an experienced local agent - for an insider's view on current market conditions. As we mentioned, performance varies widely down to street level - so if your property is in an area that’s attractive to homebuyers and/or investors, you could still get a good result as stock levels are still relatively low.