Buoyant Brisbane Market

We have seen another strong start to the year for both houses and apartment prices, while it’s no secret that the Sydney and Melbourne markets are starting to cool down. Remember, the southern cities are ‘cooling’ from extreme highs, so their price pressure will be slowly released in the short to medium term.

Dwelling prices kept increasing at a steady pace for our first quarter, the fastest rate of any capital city. It may be that we are heading towards price consolidation after phenomenal but unsustainable annual price growth of 25% + over the past 12 months.

Many homeowners and potential Sellers are wondering are there signs property values will drop? We can’t see this happening in the short term as we continue to field strong enquiry from interstate and operating in a low stock environment. As I drive around the city Brisbane looks in good shape, turbocharged as Queensland’s largest building projects are in full swing, including Queen’s Wharf and Cross River Rail.

We are also fielding a lot of questions about the Olympics and what impact, if any, this will have on property prices. We can expect the eyes of the world to be on Brisbane in the run up to the games and, of course, during them. The Olympics provides cities with a great tool for promotion and for urban marketing. It is an extraordinary opportunity for Queensland and Brisbane to leverage a short-term event into a positive long-term legacy.

As property owners in the city, you will have a ring-side seat to the action. Economic benefits will flow from ticket sales, licensing, jobs, sponsorships and much more. There will be more and better facilities and infrastructure. And then there are all those intangible benefits – excitement, inspiration and entertainment.

What can we expect with regards to house prices? If we look at what happened in Sydney, and more broadly across Australia, during and after the 2000 Olympics, it seems there are benefits there too. According to a report by urban researcher Associate Professor Constantine Kontokosta published in 2011, house prices in Australia had experienced minimal growth in the years leading up to the Olympics. Between 1990 and 1996 prices grew slowly in Sydney but then soared from 1998 as preparations for the Olympics approached their peak. After the Olympics, across Australia, house prices grew overall by 13.9 per cent, with Sydney achieving a 60 per cent increase between 2000 and 2004.

Some recent market observations:

• Desirable locations are always tightly-held so we will continue to see strong sale prices in the best neighbourhoods;
• Seller’s price expectations have magnified during the boom, Buyer’s now wary of overpaying;
• Following the Brisbane Olympics announcement, inner city apartment investment activity to increase;
• Vacancy rates have now fallen below 1% in Brisbane, extremely difficult conditions for renters;
• Media focusing on interest rate rises and narrative around the market slowing.

Thanks for reading, as always if we can assist with any of your property needs, either buying, selling or leasing we would love to hear from you.