‘Very strong market’: Brisbane ascends as property prices continue upwards march

Source: The New Daily

Brisbane has become Australia’s second most expensive capital city for property, according to new figures that reveal home values are growing at the fastest pace in more than six months.

CoreLogic figures published on Monday showed a 0.8 per cent rise in the closely watched Home Value Index (HVI) in May – the 16th straight month that the property market has shot upwards.

But it’s not Australia’s two largest capitals leading the surge, with relatively subdued conditions in Sydney and Melbourne being offset by big increases across the medium-sized capital cities.

Brisbane is the standout, with values rising 1.4 per cent in May to top Canberra as Australia’s most expensive market behind Sydney, where values rose a comparatively slow 0.6 per cent.

On CoreLogic’s data, Melbourne’s median values were overtaken by Brisbane earlier this year, but others think slightly differently.

My Housing Market chief economist Dr Andrew Wilson suggested that Melbourne values are still slightly ahead, at least for the time being.

Either way, it’s clear there has been a big shift towards Brisbane and surrounding markets since Covid-19, with buyers searching for more affordable housing in Australia’s north.

“Brisbane is a very strong market,” Wilson said.

“By contrast, the Melbourne market is still underperforming.”

Brisbane surges, Melbourne subdued

CoreLogic’s data clearly demonstrate the shifting fortunes between Melbourne and Brisbane.

Before Covid-19 the median dwelling value was about 37 per cent higher in Melbourne than Brisbane, but since then values in the northern city have grown at five times Melbourne’s pace.

Brisbane values have risen almost 60 per cent, while Melbourne has risen by only 11.2 per cent.

In dollars, median house values in Brisbane are currently $937,479, some $190 above Melbourne.

Meanwhile, units in Brisbane are $615,429, also higher than Melbourne’s median of $614,299.

CoreLogic has suggested that part of the story is Melbourne’s median being weighed down by a larger number of units – which are cheaper – but there are myriad other factors at play as well.

CoreLogic research director Tim Lawless said that low supply across Brisbane, Perth and Adelaide during the recent market upswing has been a key reason each city has surged.

“The number of properties available for sale in Perth and Adelaide remain more than 40 per cent below the five-year average for this time of the year while Brisbane listings are 34 per cent below average,” he said.

Wilson said Melbourne continues to struggle with a lack of confidence, partly because of a weaker economy than other states, but that land tax arrangements weren’t a relevant factor.

He suggested prices still have further to run in Brisbane and Australia’s other mid-sized capitals because there are still segments of those markets offering better affordability than in Sydney.

Sydney affordability

Australia’s most expensive housing market has now posted a 14.1 per cent rise in values since prices began increasing again in 2023, amid high levels of demand and persistently low supply.

But interestingly CoreLogic says affordability has increasingly weighed on the market, with upper quartile home values showing the lowest rates of growth over the past 12 months specifically.

“Conditions have faded across the upper quartile as borrowing capacity reduced and affordability constraints deflected demand towards middle-and-lower-priced properties,” Lawless said.

Topics: Property
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