Brisbane’s housing market was the strongest performer in 2022, with a 32% increase in the median house price. This was in comparison to 22% nationally.
Since the pandemic began, Brisbane’s dwelling values increased by 42.7% from trough to peak, according to CoreLogic.
Despite enduring major flooding earlier this year, Brisbane continued to outperform most capital cities throughout 2022. An influx of interstate migrants from the southern states has put pressure on dwelling stock. A strong dwelling stock deficiency emerged in 2021/22.
Brisbane’s affordability, relative to Sydney and Melbourne, assisted the migration, although this gap is tightening.
What is going to happen to the Brisbane Housing Market?
Unlike other capital city markets, there are many positive signs for Brisbane’s housing market which won’t disappear any time soon.
This includes strong population growth, affordability, and dwelling stock balance which will help the Sunshine State capital outperform most others in the short run.
The vacancy rate in the city is just 0.8%, according to SQM Research.
However, there are concerns about the outlook of the Brisbane housing market.
Credit conditions have tightened, and, like other markets, lower borrowing capacities are expected to impact affordability and drag prices down.
With new house and land sales materialising into completions, this will help lift new dwelling supply.
As mentioned earlier, the relative affordability advantage of Brisbane to Melbourne and Sydney has shrunk over the last 12 months, but is expected to stabilise over the three years to 2024/25.
The median house price in Brisbane is forecast to sit at around $819,000 in June 2025.
Brisbane Unit Market
Along with houses, Brisbane’s unit market has outperformed the national average, recording a 13% rise in 2021/22 compared to 3% nationally.
As of June 2022, the median unit price in Brisbane was $505,000.
This has been caused by investors flocking back to Brisbane thanks to strong rent rises. ABS data shows that the value of investor lending in Queensland is up fourfold in two years.
The unit rental market in Brisbane has been tightened by high levels of net interstate migration, especially from younger families, and changes in household formation. This has lifted rents from a bland growth profile that has existed since 2014. As of June, the rental vacancy rate has remained at 0.97%, the lowest since March 1988.
This has pushed rents by an estimated 8% for units and, in the three years to June 2025, rents for units are forecast to grow by another 19%.
“The full return of overseas migrants and continued interstate inflows will place further pressure on the rental stock whilst investor appetite remains strong,” noted QBE’s recent Australian Housing Outlook 2022-2025 report.
The recently proposed land tax changes, which were poorly received by many property commentators, have been shelved. These changes would have been a potential downside risk to the outlook for unit prices.
Additionally, the 2032 Olympics and associated infrastructure is expected to boost developer and buyer optimism. A growing apartment pipeline also suggests strong growth in the high-density sector.
The median unit price is forecast to be around $507,000 in 2025 after reaching a mild trough in late 2023.
Regional Queensland Housing Outlook 2022-25
A shift in preferences towards increased space and more lifestyle-focused locations has boosted the population growth of regional Queensland.
Although Greater Brisbane has half of the state’s population, lifestyle factors and affordability to the southern markets guarantee growth across the Sunshine Coast and the Gold Coast
Notably, Toowoomba is set to witness solid population gains going forward, with long-time underperformers Cairns and Townsville expected to be supported by returning domestic and international travellers. These areas will also benefit from robust commodity prices.
Article source: Queensland Property Investor
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