Brisbane's rental market, Brisbane's sales market

What’s next for Brisbane’s sales and rental markets?!

It’s almost a national obsession. Real estate. “What’s happening to the price of my home?” “Will my rent keep going up?” It’s often the topic at Australians’ social gatherings, and definitely more so now than at any time in my recent memory.

With skillful avoidance of any major predictions (because no-one can really do them with any creditability!) here’s a quick dive into the latest data for Brisbane’s sales and rental markets, some insight from the Bees Nees team, and hopefully enough info to stock you up for your next social outing!

Let’s talk about rents first, because some of the latest stats are newsworthy: Brisbane’s inner city had a 6% leap in median rents over the June quarter alone. The RTA report on the raw numbers for new bonds lodged with them for each postcode (by far the most accurate reading on the market) and they reflect a huge rise in demand for our housing. Supply has actually risen – by 4,000 dwellings or 7% – across our inner suburbs in the past year alone. But it’s not keeping up with demand.

Brisbane's sales and rental marketsOverseas arrivals are up and by heaps. Bees Nees Realty’s Leasing Manager Josh Lewis: “There is large demand for furnished properties, and I’ve had quite a number of international students and skilled workers coming to Brisbane looking for this type of property. Two bedrooms under $500/week in the inner-city are seeing strong amounts of enquiry and typically rent within the first 1-2 inspections.”

Josh says there is some evidence of rents at least cooling a fraction. “The rest of the market still needs to be priced fairly as more tenants are sticking to their budgets and can be conscious of price as inflation rises.”

The RTA data shows inner-Brisbane’s rents up 11% over this past year as we’ve come out of the COVID fog. But it’s also worth looking back to see that these “record high rents” are not part of some long upward trend that’s filled the pockets of greedy landlords. Our median rent for a 2 bed apartment first hit $490 way back in 2012 and we were still at that level last year. Brisbane’s property investors (who supply a third of our housing) need some appreciation for waiting a decade for an increase in their returns…

Many market watchers love the ‘property clock’ and the latest update from valuers Herron Todd White saw them move Brisbane houses from “approaching peak” to 12 o’clock and “peak of the market”. Interesting their big hand hasn’t moved on our units, still at 9 o’clock and “rising market”: Writing about inner city apartments in places like Newstead and South Brisbane, HTW say: “Our expectation is that those units geared towards owner-occupier users (as opposed to purely tenants) should enjoy a value uptick in the next six months or so. A mix of young professionals and downsizers are fuelling demand, particularly as detached housing is beyond their budget”

CoreLogic’s end of July data showed further divergence between dwelling types in Brisbane, our unit prices up 2.8% these past 3 months while houses dipped 0.3%. But a deeper look at the numbers shows houses have outperformed for most of the recent market surge: annual growth has been over 23% with units now up 15.7%.

Writing in Australian Property Investor Magazine, Melinda Jennison from Streamline Property Buyers: “The shift in demand over recent months away from housing and towards quality townhouses and units has been stimulated by affordability constraints due to the rapid growth in Brisbane house prices over the last 18 months. A $500,000 budget used to be sufficient for a reasonable house on its own lot within 30km of the CBD but that budget typically now needs to be a lot higher.”

Our Bees Nees Realty sales team say the market is still vibrant, especially for quality apartments and those with views, though it has eased since interest rate rises became monthly headlines. Sales Manager Rebecca Herbst: “Still strong enquiry from buyers though not at the extremely high level we have seen in the first half of the year. We are still seeing a range of first home buyers, downsizers and investors, and all styles of homes are in demand. House prices are staying steady with some increases still being seen in the apartment market for 2 and 3 bedroom properties.”

While auctions are most common for our houses and not nearly a big enough part of the Brisbane sales market to represent any meaningful barometer (remember that when you see those Sydney/Melbourne-focused news reports!) this city’s bidding action is back to something more normal. Justin Nickerson from Apollo Auctions: “The auction market held firm last week in the face of another interest rate rise returning an overall clearance rate of 54.8%. This was largely on the back of an increased number of registered bidders per auction… It seems as though the market has now found its new ‘normal’ with many buyers and sellers focusing on transacting today rather than theorising as to what could lie ahead tomorrow.”

It’s a good reminder – getting on with our plans to buy, sell or invest, regardless of what the market might do tomorrow. I’m saving that line for my Saturday BBQ!