Queensland Market Monitor, June 2020 - REIQ

Housing values continued strengthening and the absorption of units from overbuilding was gaining momentum. Add to this an extraordinarily long list of large-scale infrastructure projects hitting their straps while interstate migration remained in an upward trajectory.

Given the city’s extended period of price under-performance since 2010, these elements were a welcome sign at the start of 2020. But then the coronavirus crisis took hold and the shutdown brought a screeching halt to enthusiasm. When restrictions around open homes and live auctions were added to the mix, things looked dire for the property sector. But the easing of restrictions over the past few weeks has brought renewed hope of a turnaround, and confidence is beginning to show through once more according to REIQ Brisbane Eastern Zone Chair Julie Harris who said houses proved particularly resilient after a rocky first response to the crisis.

“We had a number of listings scheduled to happen that didn’t. A number of vendors held back, but I have to say in general terms, the market has stayed consistent,” she explained, adding that buyers thought they’d be getting huge discounts on the back of negative media but that didn’t play out. “All the properties we’ve sold since this crisis started have been at ticket-price or better. We have not discounted one of them.”

Harris further highlighted that the unit sector had performed well too. “From September through to December 2019 we saw a really good jump in activity. Units started to move and prices started to creep up. Unfortunately, come March, property activity stopped…but even the units we’ve put on the market during lockdown have sold at higher than ticket-price.”

Local Economy and Infrastructure Investment
Despite the COVID-19 clampdown, major infrastructure projects have remained on the books and stand ready to restart the State’s economy. From Queen's Wharf to the Cross River Rail, there’s big expenditure earmarked for the capital. There’s also been new allocations set to assist at a local level. Brisbane City Council will receive $5 million from the State Government for shovelready projects from the $200 million COVID Works for Queensland program. The Palaszczuk Government said the allocation will deliver projects that will have longterm economic benefits and increase liveability in our communities. Furthermore, with the easing of restrictions along with the impetus to get people back to work, government bodies look set to continue supporting infrastructure as a major measure in the recovery.

House Market (<2400m2)
Up until late January, a generally positive outlook remained among industry professionals about the state of the Brisbane LGA housing market. Metrics looked promising for a strong 2020 prior to the coronavirus slowdown. And our overall analysis to March 2020 reflects this with the housing market considered to be in the steady-but-rising sector of the price cycle.

The median house price rose +0.7% in March Quarter 2020 to record a result of $695,000 across 2,328 transactions. On an annual basis, the detached house median price rose +1.5% to reach 690,000 across 12,903 transactions. In the time since these metrics were collected the crisis shutdown slowed momentum, but recent easing of restrictions has brought renewed interest to the house sector.

General Activity
General activity metrics paint the picture of a market that was seeing less stock while pricing held firm. These conditions normally precede value increases, although changed conditions brought on by the pandemic shutdown would have slowed this momentum.

Total annual listing numbers to March 2020 reached 19,133 which is a substantial fall of -9.7% compared to last year. Stock On Market also tightened from 6.8% in 2019 to 6.1% in 2020. Median days on market blew out slightly by four. For the year to March 2020, the result was 35, whereas at the same time last year it was 31 days. And, median vendor discounting held reasonably firm. The figure was -4.3% for the year to March 2020 as compared to -4.2% for the year to March 2019.

Unit and Townhouse Market
While absorption of Brisbane’s new-unit oversupply was well underway by the end of 2019, there were still concerns expressed by some industry experts about the investor-unit sector and its ability to turn prices around. Given this is a substantial portion of the market, particularly in the inner-city, it was thought investment stock might drag down overall attached housing values. In contrast, industry stakeholders saw owner-occupier stock performing well. Larger units with unique elements and in good locations were trading nicely.

In the wash out, prices have held up well across the board, although our overall metrics suggest attached housing remains in the steady-but-softening sector of the big-picture price cycle. Unit prices rose +0.6% over the March 2020 quarter to reach a median of $415,000 across 1,492 transactions.

Over the past year, the annual median unit price rose +1.2% to $420,000 across 6,782 transactions. Listing numbers over the year to March 2020 were 11,393 which was a -6.2% fall on the 2019 figure.

Stock On Market also fell, coming in at 6.3% for the year to March 2020 as compared to 6.9% in 2019. And, median days on market dropped by two to reach 48 to March 2020, while the median vendor discount increased by -0.5% to reach -4.4% in 2020.

Rental Market
Brisbane’s overall rental vacancy rate sits at 2.1% for the March 2020 quarter. The figure has remained below 3% for the past five quarters according to our analysis. The Brisbane LGA median rent for a three-bedroom house held steady at $450 per week for the year to March 2020. The three-bedroom townhouse median was $430 per week for the year to March 2020 which reflects a rise of $10 per week compared to the 2019 result. Meanwhile, two-bedroom units saw a $5-per-week increase in the median during the year to come in at $430 per week. The detached housing gross rental yield of 3.4 % for the March 2020 quarter was down just -0.1% on the previous quarter’s result. Units in the Brisbane LGA saw their median gross yield rise to 5.5% in the March 2020 quarter which was a +0.4% increase on the previous quarter.

BRISBANE LGA

House Market (<2400m2)
The median house price rose +0.7% in March Quarter 2020 to record a result of $695,000. On an annual basis, the detached house median price rose +1.5% to reach $690,000. In the time since these metrics were collected the crisis shutdown slowed momentum, but recent easing of restrictions has brought renewed interest to the house sector.

Unit Market
Unit prices rose +0.6% over the March 2020 quarter to reach a median of $415,000. Over the past year, the annual median unit price rose +1.2% to $420,000. Listing numbers over the year to March 2020 were 11,393 which was a -6.2% fall on the 2019 figure. Stock On Market also fell, coming in at 6.3% for the year to March 2020 as compared to 6.9% in 2019.

Rental Market
Brisbane’s overall rental vacancy rate sits at 2.1% for the March 2020 quarter. The figure has remained below 3% for the past five quarters. The Brisbane LGA median rent for a three-bedroom house held steady at $450 per week for the year to March 2020. The three-bedroom townhouse median was $430 per week for the year to March 2020 which reflects a rise of $10 per week compared to the 2019 result. Meanwhile, two-bedroom units saw a $5-per-week increase in the median during the year to come in at $430 per week.

GREATER BRISBANE

House Market (<2400m2)
The Greater Brisbane region experienced a +1% rise in the annual median price to March 2020 to reach $530,000. The Brisbane LGA saw its median increase while Ipswich’s stayed flat with 0% movement. Logan, Moreton Bay and Redland all saw their medians fall modestly over the year. Logan recorded a median of $395,000 (-1.3%), Moreton Bay a median of $447,750 (-0.3%) and Redland $525,000 (-1.5%). In terms of price movement across the March 2020 quarter, Greater Brisbane experienced no movement, recording $525,000 across 5,387 transactions. Of the outer LGAs, Logan saw its prices retract by -0.5% to come in at $397,000. Moreton Bay saw its house prices increase by +0.6% to reach $452,000.

Unit Market
The Greater Brisbane region saw its annual unit median rise +1% to reach $390,000 across 9,023 transactions. The Brisbane LGA unit market saw its annual median rise +1.5% to $420,000 to the end of March 2020. The remaining LGAs were conspicuous by underperformance. Ipswich’s median was the most dramatic, recording a -16.7% annual fall to come in at $225,000. Logan’s fell -6.3% to $225,000, Redland’s fell -4.3% to $356,000 and Moreton Bay’s fell -1.6% to $315,000.

Rental Market
The Greater Brisbane vacancy rate was at 2% in the March 2020 quarter – a modest tightening of 0.3% on the previous quarter’s result. It’s noted that the region’s vacancy rate has remained below 3% since March 2017 reflecting a generally balanced-to-tight market across Greater Brisbane. Of all the outer LGAs, Redland had the tightest vacancy rates at 1.5% for the quarter, but it’s worth highlighting that Moreton Bay, Ipswich and Logan vacancy rates were all between 1.7% and 2%.