Brisbane House Market Recovery

The Brisbane housing market continues to recover following a lengthy period of subdued buyer activity.

Brisbane’s median house price increased by a solid 7.3 percent over the 2013-14 financial year, which was just below the previous highest financial year result of 7.9 percent recorded over 2009-10. Brisbane’s June quarter 2014 median house price finally surpassed the previous peak level recorded over the June quarter 2010 – a lengthy recovery period of four years. Low interest rates, a gradually improving local economy and rising confidence have generated increased buyer activity and prices growth in the greater Brisbane housing market, although results have been mixed between prices sectors, buyer types and regions.

Inner and middle Brisbane suburbs have recorded the highest growth in prices over the past year as value perceptions gradually activated mid-price range, changeover buyers. Investors have also re-entered the Brisbane market as price growth re-emerged with relatively high and stable gross yields and low vacancy rates.

First home buyer activity in Brisbane has been low as a consequence of government changes to local incentive schemes but is set to gradually increase, particularly given relatively high local rents.

Brisbane’s outer suburban, budget-priced regions remain subdued with median house prices in the cities of Ipswich, Logan and Moreton Bay still well behind the previous peaks recorded in 2010.

Brisbane price growth levels peaked over the December quarter and although the peak impact of low interest rates has moderated, Brisbane is nonetheless set to continue to record solid and consistent price growth through the remainder of 2014 and into 2015. Confidence has returned to mid and upper-price range changeover buyers who will become increasingly active particularly in suburbs closer to the city. Investor activity is also set to rise, driven by the prospect of emerging capital growth, rising rents and high stable gross yields.

Brisbane’s outer suburban budget markets, however, will continue as the underperformers in the local housing market revival with much depending on the performance of the local economy.

Although signs had emerged of an improving Brisbane economy, this improvement remains modest with continuing subdued growth and stubbornly high levels of unemployment. Despite continued economic headwinds, the Brisbane housing market will produce another solid result over the 2014-15 financial year with prices growth similar to that recorded over 2013-14.

With buyer confidence largely restored, Brisbane will be one of the leading capital city performers with house prices increasing by between 5 and 7 percent this financial year.