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Brisbane house prices surge again as southern cities take a breath

Brisbane house values surged 2.9 per cent in December and defying a national trend of slower growth

Jan 04, 2022, updated Jan 04, 2022
Home lending has improved in Queensland

Home lending has improved in Queensland

Brisbane’s monthly jump in prices was a record for the current cycle and lifted the annual growth for the city to 27 per cent, according to CoreLogic.

The Sunshine Coast topped the state with a 33 per cent increase.

But CoreLogic said Brisbane was also suffering from a supply crunch with houses for sale 35 per cent below the five-year average.

The real estate research company said Brisbane and Adelaide, along with regional Queensland, were the only broad regions where there was no evidence of value growth slowing, with the monthly rate of growth reaching a new cyclical high in December.

This was likely related to affordability issues in cities like Sydney and Melbourne and the continued strength in interstate migration to Queensland as well as supply.

While stock levels have been low, the total number of home sales in 2021 was approximately 40 per cent above the decade average. 

CoreLogic estimated there were about 653,000 house and unit settlements over the year, the highest number of annual sales on record.

CoreLogic’s research director Tim Lawless said nationally, housing values were 1 per cent higher in December, slowing from a 1.3 per cent rise in November. The monthly peak was 2.8 per cent growth in March 2021.

“As dwelling value appreciation slows, conditions are becoming more diverse amongst the capital cities and regional areas of Australia,’’ Lawless said.  

“Across the capitals, the monthly change ranged from a 0.1 per cent fall in Melbourne housing values (the first month-on-month fall in Melbourne housing values since October 2020), through to a 2.9 per cent surge in Brisbane dwelling values. 

“On the other end of the spectrum, momentum has slowed quite sharply in Melbourne and Sydney dwelling markets, with both cities recording the softest monthly reading since October 2020.  

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“A surge in freshly advertised listings through December has been a key factor in taking some heat out of the Melbourne and Sydney housing markets, along with some demand headwinds caused by significant affordability constraints and negative interstate migration.” 

Regional Australian housing values have seen some renewed momentum with a monthly rise of 2.2 per cent, the highest in nine months. Regional Queensland was the clear standout across the rest-of-state markets in December, with housing values up 2.4 per cent.

The most popular regional markets have seen housing values rise more than 30 per cent over the calendar year, with the Southern Highlands and Shoalhaven recording the highest annual rise in home values at 37.7 per cent, followed by the Sunshine Coast at 33 per cent.

After leading the upswing, it is clear the upper quartile of the housing market is now leading the slowdown.  Across the combined capitals, upper quartile dwelling values were up 2.6 per cent in the December quarter compared with a 3.7 per cent rise across the lower quartile and broad middle of the market.  

“We have seen this trend in previous growth cycles, where more expensive housing markets have shown greater levels of volatility; housing values tend to rise more through the upswing but record a larger decline through the down phase of the cycle,” Lawless said.

He said the slowing trend in Sydney and Melbourne can be explained by a bigger deposit hurdle caused by higher housing prices alongside low-income growth, as well as a recent surge in advertised inventory levels and weak demographic trends. 

“In Brisbane and Adelaide, housing affordability is less challenging, advertised stock levels remain remarkably low and demographic trends continue to support housing demand,’’ he said. 

He said that since March 2020, housing values across regional Australia are up 32 per cent compared to the 20 per cent lift in values seen across the combined capitals.  

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