We’re halfway through the year and still the Australian property market is turning in big monthly results.
CoreLogic’s latest home value index has reflected another +1.9 per cent increase in median property values around the country, and Queensland has stuck closely to that figure, both regionally and in metro Brisbane.
Undersupply meeting pumped up buyer demand and sustained record-low interest rates have kept the housing boom rolling on, but signs of easing growth look to be on the horizon.
We look into what the current numbers are telling us and where things could be heading in the Queensland market.
Brisbane’s market update
Monthly change: +2.2%
Monthly change: +0.7%
Brisbane’s movements mirrored the national market’s growth this month, and as a result the +1.9 per cent bump has brought the city’s median property price up to $586,142.
That’s around a $11,500 increase in the space of just 30 days.
Units close out the financial year with gains of +5.3 per cent, while houses blazed ahead a fiery +14.8 per cent over the last 12 months, a full $100,000 jump.
As has been the case all year, the boom has been driven by a shortage of housing stock to satisfy huge buyer demand.
According to SQM Research, the number of new listings coming to the market in June was nearly identical to May, yet total listings dropped by -4.0 per cent for the month.
That indicates that properties are still being bought up faster than new ones can be listed, and older stock that had previously struggled to sell is now being seen with fresh eyes as buyers spread their search wider and wider.
QLD regional market update
Monthly change: +1.8%
Monthly change: +1.8%
Aside from Victoria, where the Melbourne property market’s recovery has been stunted, Queensland is the only state where the regional market has outperformed its capital city over the past six months.
While Brisbane edged ahead for June, the Sunshine State’s regional areas have remained in high demand throughout 2021, particularly with interstate buyers looking for a lifestyle change in areas like the Sunshine Coast and Gold Coast.
It’s resulted in year-to-date growth of +11.8 per cent for regional Queensland, pushing the median home price up by just over $44,000 in just six months.
CoreLogic’s new Million Dollar Markets report, which tracks suburbs that broke through the $1 million median barrier between May 2020 and 2021, found that Queensland was the only state where the regional market had a higher number of new entries than the capital city counterpart.
The list more than doubled with 25 new million-dollar markets, all from the Sunshine Coast and Gold Coast. Burleigh Heads on the Gold Coast grew by 39.2% while Buddina on the Sunshine Coast grew by 31.2%
With Covid outbreaks in capital cities around the country in recent weeks, Queensland’s regional destinations seem to be as appealing as ever.
Brisbane and QLD rental market update
While the rental markets in Sydney and Melbourne are still in strife, the rest of the country is in a healthier state, Queensland included.
CoreLogic notes that property prices are rising faster than rents around the country, and as a result gross rental yields in Brisbane and regional Queensland have both taken a 0.1 per cent dip for June, ending up at 4.1 and 4.9 per cent respectively.
Rents are still rising significantly in Brisbane, though, where house rents are up +8.4 per cent over 12 months. Units posted a more muted +3.8 per cent rise.
“As with national home values, much of the increase in rental rates may be associated with government stimulus, increased household savings and a strong economic recovery from Covid restrictions” explains Eliza Owen, CoreLogic’s Head of Research Australia.
Looking at the latest figures on vacancy rates from SQM Research brings good news for investors.
Vacant properties in Brisbane have dropped by an average of 0.1 per cent every month since January, with May’s vacancy rate as low as 1.3 per cent.
What’s next for the Brisbane and QLD markets?
Having managed to avoid the kind of Covid outbreaks that have caused longer lockdowns in Melbourne and Sydney, property in the Sunshine State continues to be a very attractive proposition for interstate buyers.
However, CoreLogic has cautioned that affordability constraints could take some wind out of the market’s sails in the coming months, and they anticipate an easing in the rate of growth.
Given the unexpected strength of Australia’s economic recovery, the big banks are predicting interest rates to rise before the RBA’s 2024 forecast, some saying as early as 2022.
As a result, mortgage rates are beginning to creep up, and that’s another factor CoreLogic says could cool the market down in the second half of this year.
In any case, right now it still looks very much like a seller’s market in Brisbane and Queensland’s regional hubs.
Article Source: www.openagent.com.au