Brisbane’s growth holds promise for post-virus future
Brisbane remains the most affordable city on the East Coast and was showing strong and steady growth in property values when the coronavirus struck. And with Queensland the first state to start to lift lockdown restrictions, it augurs well for the market’s return.
New research shows property values in the city increased by 3.1% in the 12 months to March 2020, pushing the city to record highs.
Values in the first 12 weeks of this year rose 1.3%, showing a strong demand immediately before the coronavirus lockdown and subsequent economic fall-out.
Regional Queensland also put in a strong performance for the year to March, growing property values by 3.9%. It was second only to regional Tasmania, which was up 9%.
Brisbane properties registered a slightly longer period on the market, moving from 52 days in March 2019 to 55 days. Regional Queensland was also consistent but on the right side of the ledger, reducing its median average from 68 days to 63.
Vendor discounting was down in Brisbane, dropping from 4.8% to 4.1% for the year to March 2020.
An influence on this outcome may have been a 12% drop of new listings in March, compared with the corresponding period in 2019. A total of 3,857 new properties were offered for sale in Brisbane, while 4,812 properties entered the regional Queensland market.
First-home buyer activity was also healthy, up 2.6% across the state compared with the previous year.
Investor purchases have remained steady for the past two years. They represented 25.2% of all transactions in January, according to CoreLogic. Gross rental yields in Brisbane stood at 4.4%, outstripping Sydney (3%) and Melbourne (3.2%).
The strength of these overall results for Brisbane and regional Queensland are unlikely to be matched for a few months given the economic impact of the pandemic. Fears for job security and double-digit unemployment are dampening market sentiment currently.
One early indicator of the pandemic’s impact is the national auction performance. The number of properties under the hammer dropped 50.2% while clearance rates were 37.3%.
More significantly, 66.7% of properties due to go to auction were sold before they went under the hammer. This is an unusually high percentage and indicates vendors were taking offers and buyers remained sufficiently confident in the future to commit to a purchase.
Excellent buying exists in Brisbane and regional Queensland at the moment. Fewer buyers are competing for the properties that remain on the market. This is an ideal scenario for those with a long-term view who know the disruption caused by the virus will not last forever, and the market will rebound.