Queensland Market Monitor, October 2020 - REIQ

Queensland Market Monitor, October 2020 - REIQ

Brisbane real estate professionals – many of whom feared the worst a few months back – would agree the market reached June 2020 in far better shape than expected.

According to our analysis, median prices across houses and units increased on an annual basis, with house prices improving quarterly as well.

Best of all, the good news continued past mid-year, according to REIQ Brisbane Northern Suburbs Zone Chair Brendan Whipps.

“If I look at my open home attendee numbers as a lead indicator, then pre-COVID we peaked at 750 groups of people through our homes on a weekend. Then, during COVID restrictions, it dropped as low as 40 inspections a week,” he said.

“Ever since May, however, we’ve seen a nice steady increase back up, and last weekend we saw 715 groups through. So, we’re now back to really strong conditions.”

Mr Whipps said demand was being driven by local buyers.

“We get a lot of inquiry and engagement over the listing portals from interstate, but nobody can get here to take a look. There aren’t too many sight unseen sales at the moment. It’s a real mix of upgraders, downgraders and first home buyers.”

He said with interest rates being so low, those who had the ability to service a loan were able to take advantage.

“People have had enough time to work out if their job is going to be impacted by COVID, so the confidence to borrow money among those with a secure job is really high.”

Local Economy and Infrastructure Investment
Infrastructure works are steaming ahead in Brisbane as the government looks towards bolstering the economy beyond the crisis.

From Queens Wharf to Cross River Rail, there’s big expenditure earmarked for the capital and it’s hoped jobs from both construction and ongoing operation will assist in bringing strength to the Brisbane economy.

Of course, there are the flow on benefits to local businesses as well.

For example, the State Government recently reported work is underway to produce 25,000 concrete segments for the tunnels of South-East Queensland’s new underground rail system at the Wagners Precast facility at Wacol. This is just one example of how infrastructure is benefitting the region’s businesses.

House Market (<2400m2)
Our analysis of quarterly and annual median price movements indicates Brisbane houses are in the recovering phase of the cycle.

The median house price rose 0.7 per cent in June Quarter 2020 to record a result of $694,000 across 1897 transactions.

On an annual basis, the detached house median price rose 2.9 per cent to reach $700,000 across 12,344 transactions.

Our analysis factors in the period during which restriction began to ease as Queensland’s infection rates fell.

Mr Whipps said the housing sector since June has been doing well too.

“Almost every house is getting a multiple offer situation. There are big groups through opens, it’s competitive, there’s lots of demand and not much supply,” he said.

He does believe however that listings numbers may rise as we head into spring.

“I believe there’s a lot of vendors in that consideration phase at present who might list in the near future, and they’re watching the market carefully.”

General Activity
Our general activity metrics indicate a lack of listings was behind the price resilience to mid-year, with tighter vendor discounting a result.

Total annual listing numbers to June 2020 were 17,822 which is a notable fall of 10.4 per cent compared to last year.

Stock on market also tightened from 6.4 per cent in 2019 to 5.7 per cent in 2020.

Meanwhile, median days on market held steady. For the year to June 2020, the result was 34, whereas at the same time last year it was 35 days.

Median vendor discounting held reasonably firm. The figure was -3.3 per cent for the year to June 2020 as compared to -3.9 per cent for the year to June 2019.

Unit and Townhouse Market
A look at median price movements revealed unit values were steady, but still within the overall downward sector of the price cycle.

Unit and townhouse prices remained flat over the June 2020 quarter to record a median of $400,500 across 882 transactions.

Over the past year, the annual median unit price rose 1.9 per cent to $420,000 across 6326 transaction.

Listing numbers over the year to June 2020 were 9254 which was a 12.7 per cent fall on the 2019 figure.

Stock on market also fell, coming in at 6.0 per cent for the year to June 2020 as compared to 5.2 per cent in 2019.

Median days on market dropped by four to reach 47 to June 2020, while the median vendor discount fell by -0.9 per cent to reach -3.1 in 2020.

Mr Whipps said attached housing isn’t performing as well as detached housing.

“Units are definitely slower, as it’s typically the investor market buying into units and many of those purchasers would normally come from the southern states,” he said.

Rental Market
Brisbane’s overall rental vacancy rate sits at 3.2 per cent for the June 2020 quarter.

The figure had been below 3.0 per cent for the past five quarters according to our analysis. The current result is the highest vacancy rate since September quarter 2017.

The Brisbane LGA median rent for a three-bedroom house held steady at $430 per week for the year to June 2020.

The three-bedroom townhouse median was $420 per week for the year to June 2020 which is no change from the 2019 result.

Two-bedroom units saw a $5-per-week increase in the median during the year to come in at $415 per week.

The detached housing gross rental yield of 3.2 per cent for the June 2020 quarter was down just 0.2 per cent on the previous quarter’s result.

Units in the Brisbane LGA saw their median gross yield fall to 5.4 per cent in the June 2020 quarter which was just 0.1 per cent less than the previous quarter.
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