The latest CoreLogic Hedonic Home Value Index shows that from a national perspective, the housing price recovery is well underway. And from a wider economic standpoint, the country is bouncing back faster than expected.
Truth be told, Brisbane has weathered the storm better in comparison to the larger markets of Sydney and Melbourne, and in November, housing values in the city reached new record highs. Experts and industry pundits have agreed that the city, as well as some parts of regional Queensland are on a trajectory of strong growth into 2021.
Agents in the state are also reporting a ‘frenzy of interstate buyers’, with properties selling very quickly and often above reserve. Lifestyle factors, affordability and high prices in Sydney/Melbourne continue to drive buyer interest, with ANZ projecting that house prices in Brisbane could grow by +9.5 per cent over 2021.
ANZ are projecting that house prices in Brisbane could grow by +9.5 per cent over 2021
With this positive news as a backdrop, let’s take a look at how markets performed over November. And if you want a sense of what is happening nationally you can read our Australian property market update - November 2020.
Here’s what’s happening in the Brisbane property market
Overall the Brisbane market advanced +0.6 per cent over November to leave it up +1.5 per cent for the quarter and +3.2 per cent for the year to date (YTD). The median dwelling value is currently $515,267 across the city - which is a record. For this amount you get significantly more for your median money than Sydney ($860,967), Melbourne ($672,172) and Canberra ($672,866).
As Property Observer points out, ‘Highly-ranked, well-located suburbs in this city often have median house prices in the $800,000s and $900,000s’ - which to a Sydney-sider or Melbournian is a bargain!
The big change over November has been the uptick in unit prices, rising +0.2 per cent, after being negative for much of the year. Just a few months ago, the Australian Financial Review was reporting on a shift to the supply-demand equation for apartments, leading to an oversupply. So for many owners, this growth comes as welcome news.
Houses are still in positive territory, advancing a steady +0.7 per cent over November, +1.7 per cent for the quarter, and +3.3 per cent for the YTD.
The other big banks are also bullish on Brissie, with the NAB Residential Property Survey tipping the city to top dwelling price growth next year, though they are more conservative than ANZ with a projected +7.4% annual rise for 2021.
If you are looking for specific hotspots, Property Observer research identified 12 suburbs in Brisbane North and 13 in the neighbouring Moreton Bay Region with, ‘consistent sales activity across multiple successive quarters’. These include Murrumba Downs, Ashgrove and Bellara - but they also recommend researching Logan City in the south.
Now let’s take a closer look at regional Queensland.
Regional Queensland property market movements
The real action has been in regional Queensland where property prices rose +1.6 per cent overall over the month. This leaves values here up +3.2 per cent for the recent quarter and +5.4 per cent for the YTD.
These are figures many other markets can only dream about, testament to the pull that certain regional centres have, bolstered by an uptick in demand in resource led postcodes. Units are up +1.8 per cent for the month, with houses advancing a respectable +1.5 per cent over the month.
The real action has been in regional Queensland where property prices rose +1.6 per cent overall over the month
Our agents on the ground report strong interest for properties in Burleigh Heads, Ipswich and Bald Hills. According to CoreLogic analysis areas currently reporting declines include, ‘Cairns units and units in Central Queensland’ - over the 12 months to October.
Brisbane and Queensland rental market update
CoreLogic's October Hedonic Home Value Index reports that asking rents in Brisbane are up +1.2 per cent for houses but weaker for -1.9 per cent for units over the March - November period.
SQM Research reports that overall vacancies in Brisbane were at 2.0 per cent in October, with the Real Estate institute of Queensland (REIQ) reporting that many Gold Coast postcodes had rates under 1 per cent in September - including Burleigh Heads (0.4 per cent), Coolangatta (0.2 per cent), Currumbin (0.6 per cent), Palm Beach (0.1 per cent) and Miami (0.4 per cent). Further north Townsville is currently experiencing, ‘its lowest vacancy rates in more than 10 years’ (0.7 per cent) while Cairns is currently at 1.3%.
Overall REIQ reports that Queensland’s overall quarterly vacancy rate improved from 2.44 per cent to 1.49 per cent.
The REIQ reports that Queensland’s overall quarterly vacancy rate improved from 2.44 per cent to 1.49 per cent
The outlook moving forward
So what to expect as we say goodbye to the old year and welcome 2021? Let’s check in with some leading financial houses and property analysts.
According to CoreLogic’s we could, “...see a recovery from the COVID downturn as early as January or February next year.” This is largely based on broadly positive economic data, including a +3.3 per cent rise in GDP over the recent quarter. COVID restrictions are also easing as state borders open or will soon reopen - and interest rates remain at record lows - which should stimulate activity and support the housing market.
Meanwhile the WestpacMelbourne Institute sounds a slight note of caution regarding the recent pandemic related job losses, believing that: ‘Consistent above trend growth will be required to lower the unemployment rate’.
The Property Investment Professionals of Australia’s (PIPA) Annual Investor Sentiment Survey 2020 found that 67% of investors still want to purchase property, with Queensland ‘rated highest for investment prospects’ and a significant 36 per cent ‘keen to look for regional opportunities’.
On that optimistic note, we look forward to more positive property data from Brisbane and the Sunshine state in our December update!