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Brisbane cracks top 10 global growth cities

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The remarkable levels of price growth seen across Queensland recently have launched Brisbane into the ranks of the world's fastest-growing property markets. 

Boasting a combination of relative affordability, idyllic lifestyle and strong future prospects, it's no wonder the Sunshine State has been experiencing some of the highest demand across the globe. 

With the Australian housing market beginning to turn, is this peak time for Queensland sellers? 

Brisbane's incredible run of growth is starting to wind down

The Q1 2022 edition of the Knight Frank’s Global Residential Cities Index, which tracks the markets in 150 cities around the world, has declared Brisbane to be the 10th fastest growing city in the 12 months to April 2022. 

An eye-watering +28.4 per cent annual growth puts Brisbane ahead of all other Australian capitals. 

A major factor driving the city's growth is a continued shortage of available stock on the market which is being met by consistently strong buyer demand. 

According to CoreLogic's latest figures, Brisbane listings are still -38.2 per cent below the five-year average, making for an exceptionally tight market that's still pushing prices higher. 

Even so, the tides are now turning for the Australian property market as a whole as interest rate hikes begin to hit hard. 

Brisbane homes grew by +0.8 per cent in May, still a strong result but a clear sign that the market is softening after many months of soaring gains. 

While still well in the green, Brisbane price growth has eased back in recent months. Source: CoreLogic

Sydney and Melbourne — two markets where affordability has been stretched to the limit — have been the first cities to see substantial declines in property prices. 

Brisbane and Adelaide remain at the other end of the scale but are still likely to reach a correction phase at some point. 

For those sellers looking to achieve a peak sale price, making a move sooner rather than later may net better results.

Regional Queensland has maintained impressive strength

The pandemic-driven 'race for space' trend simply hasn't stopped, and regional Queensland has kept pace with the best of them. 

As of May this year, the state's regional markets have seen annual growth of +23.9 per cent, a virtual dead heat with NSW for the second-highest growth behind regional Tasmania. 

South East Queensland in particular has been in red hot demand for well over a year now, and that's clearly shown in some longer-term data. 

Across the Sunshine Coast, eight suburbs have seen house prices more than double since 2017 including Marcoola, Sunrise Beach and Coolum Beach. 

House prices in Sunshine Beach have more than tripled over five years, soaring by +211 per cent. 

Regional Queensland won't be completely immune to the widespread downturn brought on by rising interest rates, and growth has softened in recent months. 

Even so, CoreLogic's Tim Lawless said "arguably some regional markets will be somewhat insulated from a material downturn in housing values due to an ongoing imbalance between supply and demand as we continue to see advertised stock levels remain extraordinarily low across regional Australia."

The Queensland rental market is also surging

It's not just property sales that have been sent sky high over the past 12 months. Rents are now rising at a staggering rate in Brisbane and parts of South East Queensland, according to SQM Research data.

In fact, Brisbane homes have seen the biggest increase in average weekly rent of any city in the country. 

Renting a house costs +21.8 per cent more than it did last year, beating out the capital city average of +16.3 per cent. 

On the Gold Coast, the average rent in June 2020 was $576. That's now been boosted up to $1000 per week. 

Despite this, rental yields are still relatively low as a result of property prices accelerating so fast, but Mr Lawless said "a recovery back to average levels may be relatively quick if housing values continue to fall while rents maintain this growth trajectory."

More investors should be lured into the market as rental yields rise and purchase prices soften. 

What's next for the Queensland property market?

There's been plenty of positive news for sellers across Queensland lately, while buyers have faced rising prices and stiff competition. 

With the RBA's latest 0.5 per cent interest rate hike, though, it's likely that even the Sunshine State's red-hot market is going to cool off as 2023 approaches. 

According to Westpac's latest forecasts, Brisbane is due the softest landing of all the capital cities, though they expect a relatively modest price correction of -4.0 per cent next year.

Brisbane is set to fare better than all other capital cities as the Australian property market enters a period of downturn. Source: Westpac

It all comes down to how fast and how far interest rates rise, a question that nobody can answer with certainty. 

Current conditions are still strong for sellers, with prices remaining at peak levels and demand still outstripping supply.