What's Happening in the Brisbane Property Market?
Historically Brisbane has performed about on par with Sydney and Melbourne, and ahead of Perth, Adelaide and Hobart.
Of course, in the past few years Melbourne and Sydney have outpaced the rest of the country by some margin, including Brisbane.
Since 2013 Brisbane houses have seen steady but not sensational growth of between 20-30%. The city has been affected by the hangover from the mining boom, which has limited job creation and dampened demand for property.
Rental yields are better than in Sydney and Melbourne, but these are also being suppressed by the lack of job creation.
So what's going in with the different property types in Brisbane?
The detached house market is the strongest property type in Brisbane at the moment. Why? Because most people would still prefer to buy a house over anything else, and because supply of good houses in the right locations is limited.
The hottest markets at the moment are in the middle-ring of Brisbane - between 10-20km of the CBD and priced between 500-600K. Houses here are still affordable for buyers on reasonable incomes, and there is very little new supply to satiate this demand.
Demand for Townhouses in Brisbane isn't quite as strong, in large part due to the effect of the apartment glut. Prices and rents are holding but generally not increasing. The right townhouses, particularly ones that are well-located with plenty of space, are being snapped up quickly. Design and complex size are very important when looking at buying a townhouse.
The Brisbane apartment market deserves its own segment. The basic issue is supply and demand - too many apartments have been built and demand is not sufficient to absorb all of the new supply. The result that we're seeing is falls in prices and rents, as the spike of new developments in 2015 and 2016 come onto the market, and buyer sentiment turns against the units in Brisbane
So the current outlook isn't great, but we're not talking about a collapse here like we've seen in mining towns. We've reached the peak of the unit construction cycle, the Brisbane economy remains steady, and there is an underlying floor of demand for apartments which prevents them dropping too low. So I believe we'll see a 5-10% fall over the next two years before the market starts to recover.
Brisbane has some real strengths as a city. It has most of the lifestyle opportunities of Sydney and Melbourne, but is more accessible and has great infrastructure for its size. You can buy great properties in the best suburbs of brisbane for a million dollars or less, which is unthinkable in Melbourne and Sydney. There's simply not enough differences between the east coast capitals to warrant the current price differential, so I expect to see steady growth in Brisbane while Sydney and Melbourne come off the boil.
This growth will speed up if Brisbane's economy really starts to ramp up in the next year or two.
Brisbane Property Market - Key Statistics
Brisbane Property Sales
Jun 2017 - Houses: 16,420 - Units: 10,814
June 2014 - Houses: 18,675 - Units: 15,501
Brisbane Median Property Prices
June 2017 - Houses: $650,000 - Units: $443,500
June 2014 - Houses: $550,000 - Units: $431,000
Brisbane Stock on Market
Houses: 5948 out of 272,437 = 2.18%. Trend is static.
Townhouses 1275 out of 42,115 = 3.02%. Trend is static.
Units 4718 out of 86,018 = 5.48%. Trend is upward.
Brisbane Rental Yields
Units 5% Trend downward
Houses: 3.8% Trend downward
3.4% trend - slightly downward