06/03/2022
PRICE GROWTH ACCELERATES
While restrictions to finance and the potential for a sooner than expected interest rate increase is leading to much slower housing markets in Melbourne and Sydney, Brisbane remains on a roll. In the final quarter of 2021, the city saw the highest level of price growth in almost 20 years. Prices were up 7.8 per cent in just three months. Price growth continues to accelerate as opposed to starting to slow.
There are a few things that are setting Brisbane apart. The first is stellar population growth, driven last year by interstate migration and further pushed along this year by reopening international borders. The second is a high level of positivity - Queensland’s economy’s going pretty well and will do better again as it continues to operate more normally in 2022. Add to this the Olympics - while still some time away, it has given Brisbane international status and this seems to have impacted premium markets in particular.
The third is that Brisbane remains affordable. This further exacerbates population movement given affordability challenges elsewhere but is also encouraging a high level of interstate investor activity. For $1 million, you can buy in Sydney’s highest crime suburb of Blacktown. For the same price, you can buy in Brisbane’s Kelvin Grove. Brisbane’s most expensive suburb for houses is now Teneriffe at $2.5 million, similarly priced to Sydney’s Collaroy Plateau - a nice suburb but far from being that city’s most expensive.
The outlook for Brisbane is particularly positive this year. In the first half of this year, it looks like price growth will continue to accelerate. And like the rest of Australia, rents are set to rise as international borders reopen - which is great news for investors but could get challenging for many renters, particularly in highly desirable suburbs.
