Updated: Jan 16, 2021
Brisbane’s property values proved resilient throughout 2020, especially given the economic impact of COVID-19, and are now forecast by many to perform strongly in 2021.
Queensland is experiencing strong demand for detached houses and outstanding demand for lifestyle areas are projected to deliver solid capital growth throughout 2021 across several sub-markets within South-East Queensland.
Corelogic reported in its end of year figures, a +4.14% change in its Brisbane Home value index over the last year, with houses +4.66% and units +2.33% (year on year). Further to this, Brisbane has seen its vacancy rate drop from 2.9% to 1.8% from the same time last year, according to SQM Research.
During recent months houses in Brisbane have enjoyed improved demand, and the number of transactions in the Brisbane housing market is higher than they were pre-Coronavirus.
Westpac Bank also recently updated its property forecasts, with some very strong capital growth expected across Brisbane, expecting prices to jump 20 percent between 2022 and 2023. Meaning Brisbane is likely to be one of Australia's best-performing property markets over the next few years.
Here is a look at some of the most recent forecasts that came out towards the end of last year:
Westpac forecast Brisbane property values could increase by 20% in 2022-23
ANZ Bank forecast Sydney property values could increase by 10% in 2021
NAB forecast Sydney property values could increase by 7.4% in 2021
SQM forecast Sydney property values could increase 4-8% in 2021
Riskwise forecast Sydney property values could increase 6-10% in 2021
While the overall figures for the Brisbane housing market remained relatively flat over the last few years the property markets in Brisbane are very fragmented. CoreLogic report that since arriving at the bottom of the cycle in June 2019, Brisbane’s dwelling values are up 3.2% over the last year and are now at new highs.
While digging deeper into the stats show that some properties have far outperformed others and freestanding Brisbane houses with 5-7 km of the CBD or in quality school catchment zones have grown in value substantially.
While some properties overperform, others will underperform. The worst performing segments of the market have been:
apartments in high rise towers and new and off the plan apartment sales.
properties in the blue-collar areas and new housing estates
While many locals have been affected by the coronavirus induced recession, other households and property investors whose incomes remain stable and secure are taking advantage of historically low interest rates and are upgrading their homes or buying investment properties as a result.
As you can tell, not all Brisbane properties will increase in value at the same rate. Considering there is almost always a flight to quality following challenging times.
“Investment-grade” properties and homes should keep increasing in value steadily and outperform.
B grade (average) homes should also increase, but not as strongly,
C grade (less than perfect) will be the hardest hit as there will be a flight to quality as the Brisbane property markets rebound.
Naturally, some locations in Brisbane will have strong growth potential, and the right properties in these locations will make even better long-term investments. At the same time, certain submarkets should be avoided at all costs.
Not only does it look like a great time to buy in Brisbane, but with the vacancy rate tightening, it's also a great time to assess your Brisbane investment properties to ensure you are achieving the maximum rent possible.
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