Wondering what will happen to the Brisbane property market in 2022??
- Michael Yardley
Well… Brisbane was the strongest property market in 2021 exhibiting astonishing growth, with many locations experiencing 30+% house price growth.
And even though growth is slowing in other parts of Australia, Brisbane’s housing markets are likely to continue to perform strongly in 2022.
Sure it’s currently suffering from devastating floods, but history shows the resilience of the Brisbane property market which bounces back quickly.
Last year property values increased in almost every part of Brisbane – and that’s very unusual.
Moving forward, the various sectors of the Brisbane housing market will be segmented, which is a more “normal” property market.
Some locations will rise strongly, some will increase in value moderately, some locations will languish, and a few areas will experience falling property values, based on local supply and demand.
However, by the end of the year, it’s likely “overall” home values will be 10% higher than at the beginning of the year and unit values will be 7% higher.
Brisbane property values:
increased 0.5% over the last week
increased 0.2% as April starts
increased 30.1% over the last year
Currently, the Sunshine State capital is shining but it’s not too late to be early in this cycle – there is plenty of growth ahead – for the right properties as overall Brisbane is still very affordable compared to the other east coast capital cities.
What a turnaround from all the pessimistic forecasts all the banks made in the middle of 2020.
BRISBANE DWELLING PRICE TRENDS – Source: Corelogic April 2022
While there has been a shortage of good properties for sale, Brisbane showed positive signs for buyers in Queensland, with new listings increasing 8.4% MoM in Brisbane and 4.6% MoM in regional Queensland.
Source: Realestate.com.au Listings Report October 2021Will the Brisbane property market crash in 2022?
Now I know some potential buyers are asking “How long can this last? Will the Brisbane property market crash in 2022?”
They must be listening to those perma bears who have been telling anyone who is prepared to listen that the property markets are going to crash, but they have said the same year after year and have been wrong in the past and I will be wrong again this time.
Recently both Westpac and ANZ have updated their property price forecasts in response to the market’s resilience in the face of extended lockdowns.
Outstanding demand for lifestyle areas as well as extremely strong demand for detached houses in Brisbane, particularly in the inner and middle-ring suburbs has delivered strong price growth with Brisbane’s more expensive properties outperforming.
The resurgence of buyer interest in the Brisbane property market has meant that auction clearance rates have consistently been in the 70% range, which is unusual for Brisbane considering this city is not known for its auction culture like its southern cousins, but this is just another suggestion that there are more buyers than there are sellers and this always leads to higher property prices.
In Metropole’s Brisbane office we are noticing more investors are getting into the Brisbane market recognising that while there are no bargains to be found, in 12 months’ time the properties they purchased today will look like a bargain.
Increased demand for Brisbane houses has been underpinned by increasing consumer sentiment, historically low-interest rates, and internal migration considering the relative affordability of houses in Queensland compared to Sydney and Melbourne.
Similarly, popular areas of the Gold Coast and Sunshine Coast have enjoyed strong demand considering the increased flexibility of being able to work from home and commuting to the big smoke less frequently.
At the same time, property investor activity has been strong, particularly for houses, not only coming from locals but from interstate investors who see strong upside in Brisbane property prices as well as favourable rental returns.
But be careful…
There is not one Queensland property market, nor one south-east Queensland property market, and different locations are performing differently and are likely to continue to do so.
Houses remain a firm favourite of prospective home hunters, with demand rising post-lockdown and it remains significantly elevated compared to last year.
However, apartment demand has been sliding and, in general, apartments in Queensland are a higher risk investment than houses, particularly due to a high supply of apartments that are unsuitable for families or owner-occupiers.
To help you make an informed investment decision, I’m going to examine what’s going on in the Sunshine State in detail in this article.
But be warned…it’s a little longer than normal, so if you’re looking for a particular element of the Brisbane property market, use the menu at the top of the page to skip to the section you’re interested in.
And just to make things clear…I’m talking about the property market in Brisbane – not the Queensland property market.
That’s a very different animal!
Then there are multiple markets in the diverse sprawling city of Brisbane; divided by geographic location, price point, and property type.
If you’ve been following my property investment strategy, you’ll know I only invest in capital cities and that’s why I avoid the Sunshine Coast, the Gold Coast, and Queensland’s regional markets which have very different (and fewer) growth drivers than Brisbane and are therefore more volatile.
And not all Brisbane properties will perform well.
In Queensland, houses are the preferred style of accommodation over units, and investors who buy rental apartments in high supply areas are taking a high risk with both equity and cash flow risks materially increasing over buying the right house.