The property market in Brisbane and Queensland has long had a reputation for being stable, and in the face of Covid-19 and an economic downturn, housing values across the Sunshine State have certainly shown resilience.
Over the month, dwelling values in Brisbane are reaching record highs, with positive movements across regional Queensland as well.
There is no single factor causing this, but rather a combination including low interest rates, affordability, a laidback lifestyle and a largely virus-free state. And like elsewhere, lifestyle markets are finding favour with local and interstate buyers as people embrace remote working and look for less-dense locations to settle in.
With this as a backdrop, let’s dig a little deeper and look back at what transpired over October in Queensland.
Brisbane market update
The most obvious trend for Brissie’s market is the relative weakness of apartments, which are down a fraction -0.1 per cent over October, to leave them down -1.2 per cent for the year. Domain highlights that buyers are currently paying, ‘2014 prices for a unit,’ which is great for first-time buyers entering the market, but not so great if you’re an owner.
Houses on the other hand are getting snapped up, driving prices up +0.6 per cent over the month, and +2.7 per cent for the year to date. This is likely to continue as affordability, lifestyle and lots of sunshine continue to draw interstate buyers to relocate permanently.
A lower entry point for first-home buyers is also a prominent feature of recent market activity.
The relative affordability of housing is significant, if you consider that the median house price in the city is $564,531, against Sydney’s $993,927 and Melbourne’s $780,574.
Units show a similar trend, with the median value $389,583 in Brisbane, against Sydney’s $735,350 and Melbourne’s $561,881.
Regional Queensland market update
The pandemic has changed our lives in many ways, most obviously with the move to remote working, which together with a desire to escape dense city living has provided a shot in the arm for regional markets across the country. Domain calls this a ‘sea and tree change’ phenomenon which is being played out to varying degrees across the country.
The Sunshine state is no exception, with strong demand for beach-friendly properties on the south-east Queensland coast - with the Sunshine Coast and Surfers Paradise current hotspots with buyers.
Houses have advanced +1.6 per cent (Sunshine Coast, median $650,000) and +0.6 per cent (Gold Coast, median $669,000) over the September quarter.
Look at other locations over a longer timeframe and you move into double figures, with resource-rich Isaac up +22.7 per cent, agriculture-based Burdekin up +19.3 per cent and sun-kissed Noosa up +15.3 per cent year-on-year.
Queensland rental market update
CoreLogic's October Hedonic Home Value Index reports that asking rents in Brisbane are up +0.6 per cent for houses but weaker for -1.7 per cent for units over the March - October period. SQM Research reports that vacancies in the city have dropped to 2.0 per cent (September), down from 2.8 per cent in April. Bear in mind this varies greatly by postcode, as the Brisbane CBD recorded vacancies as high as 14 per cent in June of this year.
Contrast this with other parts of the state where vacancies are much tighter, with the Real Estate Institute of Queensland (REIQ) highlighting Burleigh Heads (0.4 per cent), Coolangatta (0.2 per cent) and Currumbin (0.6 per cent) as areas where demand for rental properties is high.
The outlook moving forward
The outlook moving forward for the real estate sector in Queensland is largely positive, though there are risks.
REIQ chief executive Antonia Mercorella believes, “We’ve done remarkably well to maintain relatively stable property market conditions across Queensland throughout this pandemic.”
She does however caution that, “...despite relatively stable market conditions, low interest rates and high levels of demand...the government can do more to sustain new residential construction.”
Looking longer term there are a number of infrastructure projects in the pipeline across the state, including Cross River Rail, a second airport runway and the Adani Coal Mine.
Property analyst Michael Yardney points out that Brisbane house prices are up +0.5 per cent over the last two months - which he believes is a sign this market is turning a corner.
He also highlights sales data from Brisbane, which shows strong demand for houses - with spikes in week-on-week sales in October. As we have seen there is also a clear case to be made for some regional markets becoming alternative nodes for development, a phenomenon that the pandemic has only helped to accelerate.
More broadly rock bottom interest rates, together with incentives in the recent Federal budget are also likely to stimulate growth in the housing sector here as the economy - and state borders - begin to open up.
The latter point is particularly crucial as the state needs visitors back on their beaches and spending to stage a fuller recovery, something which is looking likelier as we move toward 2021.