Sydney, Canberra, and Melbourne have traditionally held the reputation as Australia’s costliest cities for real estate. Brisbane has risen in prominence following a three-year surge driven by the impact of COVID-19. Over the period since 2020, property values in Queensland’s capital have surged by 50%. It propels it to the position of the country’s third most expensive city, boasting a median dwelling price of $787,217.
Views from CoreLogic’s Data
According to CoreLogic data, this marks the initial instance in a decade and a half where residences in the Greater Brisbane area surpass Melbourne’s median price of $780,457. In response to Brisbane’s surging property market, Michael Deacon’s family adopted an inventive approach to navigate the challenges. They pooled incomes with his mother-in-law to acquire a residence accommodating three generations.
Faced with uncertainty, Mr. Deacon shared, “It was pretty daunting. We were unsure of our options.” It was his mother-in-law, Pat Smith, who proposed the idea to them. Describing their home, he mentioned, “It’s a two-storey house with complete dual living—upstairs and downstairs. It is ideal for our daughter.”
Pat Smith has no mortgage on her own home. The combination of increasing interest rates and the escalating property market stirred concerns about her family’s financial future.
Ms. Smith expressed, “We contemplated relocating from Brisbane to Yeppoon due to the relatively lower prices. But we ultimately dismissed the idea. The prospect of such a significant move was deemed too overwhelming.”
Brisbane remains seller’s market
Brisbane’s median dwelling price surpassed Melbourne’s in December. The median house price in Queensland is at $875,991. It remained more affordable compared to Melbourne’s capital at $948,041. Corelogic data also indicates that units in Brisbane were more budget friendly. There is a median price of $561,016, in contrast to Melbourne’s median unit price of $610,122.
Eliza Owen is the head of research at Corelogic. She explained that the higher proportion of units in Melbourne, constituting about a third of the market, contributed to a lower overall median. Brisbane, with approximately 25 percent of housing stock as units, experienced a different impact.
In the ongoing competition between Brisbane and Melbourne, Owen predicted Brisbane to maintain its lead in the short term. As property prices in Queensland’s capital continued to rise. In contrast, Melbourne was still experiencing a decline, with values decreasing by about 0.3 percent in the past four weeks.
While Brisbane retained its status as a seller’s market, the rate of property value increase slowed down. It drops from 1.5 percent in October to 1 percent in December. Owen also highlighted the potential impact of flood-affected homes, suggesting that individuals might opt to leave flood-prone areas, affecting demand and introducing more variation in capital growth.
Brisbane’s continual rent increases ‘unheard of’
Renters in Brisbane continue to grapple with sustained pressure as new figures reveal an unprecedented streak of rental increases in the most recent quarter. According to the Domain Rental Report released today, residents in Brisbane are now facing an average weekly rent of $600 for houses and $560 for units.
This marks the remarkable 10th consecutive quarter of growth in unit rents. Nicola Powell, Domain’s chief of research and economics, emphasized the extraordinary nature of this situation, stating, “Ten consecutive quarters of unit rental growth is pretty much unheard of. I think it really showcases the pressure that the rental market has experienced in Brisbane.”
The record-high rental prices underscore a severe shortage of rental properties on the market, with rental vacancies hitting an all-time low in February of the previous year. Although Brisbane’s vacancy rate has slightly increased since then to 0.9 percent, Powell noted that insufficient investment activity across the city contributed to this situation.
She highlighted that the demand is surpassing the supply due to a significant influx of people moving from interstate and overseas. While there is some hope for renters in the upcoming year, signs indicate a slight slowdown in the rate of increase, not only in Brisbane but across the country.
Domain’s report indicates that combined rents across Australia’s capital cities stabilized for the first time in almost three years, bringing an end to 10 consecutive quarterly increases. Nationally, the average weekly rent for both houses and units stands at $600. As of the end of 2023, Sydneysiders paid the highest average weekly rent for a house at $730, leading the nation. Hobart witnessed the most significant increase, with the average rent rising by $20 per week in the last quarter, reaching $550 per week.
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