Why are Brisbane property prices going up by so much during a pandemic?
A perfect storm of low stock, even lower interest rates, wage growth and a global pandemic have catapulted Brisbane’s typically slow-moving property market into the stratosphere, sparking a once-in-a-decade boom that experts say could fuel a further 10 per cent rise in house prices in the coming year.
While detached property prices rose in every capital city except Darwin and Perth over the January quarter, according to figures released by Domain, the almost magical mix swelling Brisbane’s usually stable market has been brewing for two years, says Brisbane-based market analyst and owner of Propertyology, Simon Pressley, with the red-hot industry showing no signs of slowing.
“All of Australia without exception – in every single location – is strong and it’s the first time the country has seen this for about 18 years,” Mr Pressley said.
“So, it’s a case of rising tides lifting all ships – but not everyone is rowing in the same boat.
“We had a series of events for a couple of years before COVID that meant progressively there was less and less resale stock (here in Brisbane), and it was getting tighter and tighter. Then in the six months leading up to COVID, we had auction clearance rates through the roof, prices rising primarily because we had not enough supply for sale and not enough rental supply and then we had four interest rates cuts.
“And that was all before COVID.”
But while the stars were aligning for a Brisbane property boom well before the pandemic struck, Mr Pressley said the virus further fuelled the fire as Melbourne and Sydney bore the brunt of the nation’s coronavirus chaos.
“We saw in Melbourne they lost 10,000 people (to interstate migration) in six months, and that was before the lockdown,” Mr Pressley said.
“So, there’s no question in my mind that Brisbane will outperform Sydney and Melbourne for quite some years.
“What we are going to see throughout 2021 is an increase in properties listed for sale, but at the same time, buyers will regain more confidence. We’re calling it the biggest single property boom in 15 years Brisbane … and we could see double-digit price growth [over the next 12 months].
CEO of Brisbane’s Place Estate Agents, Damian Hackett, said the launch of major infrastructure projects within the state capital had further seasoned the property boom dish – making the city a particularly enticing destination for interstate migrants fleeing lockdowns and bad weather.
Infrastructure projects have helped underpin Brisbane’s growth, says Damian Hackett. Pictured: Howard Smith Wharves, now two years old.
“2020 was always going to be strong for Brisbane, but the increase in demand outside of Brisbane [off the back of the pandemic] has just accelerated it,” Mr Hackett said.
“I’ve looked back over my 30 years (in this industry), and I’ve spoken to a lot of people who have been in it for the same amount of time and for us the acceleration of the market and how fast it came out of nowhere makes it the most prolific market we’ve seen.
“The last boom in 2007 built up over time, and then the GFC happened but as far as the pace [goes] – particularly in January this year – the rule book has been rewritten.
“In January we saw the strongest numbers (for sales) we’ve seen (in a long time) … people really shot out of the gate, and just for contracts written, it was up 85 per cent on January last year.”
While Mr Hackett said the writing for a Brisbane-wide boom was on the wall, like many, he had worried COVID would stop the market in its tracks with early predictions the economy would take a devastating nosedive.
Instead, Australian Bureau of Statistics figures released in November last year revealed Queensland enjoyed one of the nation’s highest quarterly wage growths (of 0.6 per cent) amid reports of sky-high buyer activity.
Why not when the market’s hot: Brisbane’s most expensive one-bedroom unit is back on the market for $2.95 million. 4103/71 Eagle Street, Brisbane City, is located in Riparian Plaza. Photo: Place Estate Agents
The city has since undergone two consecutive quarters of house price growth, with suburb price records smashed every other week in a remarkable show of strength Mr Hackett said felt a world away from March last year, when they were desperately restructuring the business and preparing for the worst.
“Looking back at this time last year we were talking about how it was going to be Brisbane’s year because we hadn’t seen much growth with Brisbane being fairly steady – not like Sydney and Melbourne. Interest rates were low, and the government hadn’t put negative gearing in like everyone thought, and people were feeling really confident,” Mr Hackett said.
“Then came Sunday, March 22, and it was like, holy hell. Everyone went through predictions like ‘what if we don’t sell a house for six months’; it was really worst-case scenario plans that we had in place.
“Then at our auctions last month we had a 100 per cent hit rate — and that’s unheard of in Brisbane.
“It was always going to be Brisbane’s time (because of that perfect storm) but what’s surprised me the most out of the past few months is if you’re talking about where we sat 10 months ago and what the predictions said, is just how fast it changed and how dramatically it changed …it’s the confidence people have had to jump into the market.”
CEO of Ray White Queensland Jason Andrew put that confidence in Brisbane’s market down to more than just affordability and a top lifestyle, but a rising need for somewhere safe to live in a time of heightened volatility.
“In a time of need, the safety of a home has emerged as something unbelievably important in our lives … so, while there’s no question that affordability of money plays a part in this [boom] there’s great energy right across Queensland, and a lot of people have looked at Queensland as a place of comfort and safety,” Mr Andrew said.
“When you look here, there is no market that isn’t experiencing some form of growth and we’re experiencing a shortage of inventory within the property market. Within the rental sector, you’re looking at a vacancy rate of less than 1 per cent.”
“And then there’s the interstate migration. I think all of that has driven that to where we are now.”
Mr Andrew said while Brisbane and Queensland, in general, had long been a popular destination for southern buyers, the city had never undergone lengthy market booms like its southern state capital counterparts.
He said what had stopped it before was a handful of missing ingredients such as infrastructure projects and wage growth, with the final addition of COVID-19 resulting in a boom that could change the city’s landscape.
“We’re seeing a real demographic shift here. Previously, in Queensland, it was more conservative, buyers would go up to retire, but it’s not that demographic anymore. Now you are seeing more and more 30-year-olds bidding at auction.
“[The pandemic] has highlighted what a wonderful piece of the world we have … and it’s exciting for Brisbane because our market was undervalued.
“I think it (COVID-19) has expeditiously moved us towards the path we were going towards.
“Now, numbers at open home are unheard of, and prices will continue to increase.”
Chelmer: Why locals won’t leave this riverside Brisbane suburb
It’s a telling sign when families stay put in a certain place over multiple generations, where one’s childhood is made so complete, those who grow up there yearn to pass down this same upbringing to their own family.
This is certainly the case for Chelmer, a scenic suburb encased by the Brisbane River on three sides and known for its grand, quintessential Queenslander homes and laurel tree-lined streets.
According to Alex Jordan of McGrath Paddington, many locals in the area have been living in their homes for more than 40 years.
Often these homes are bought by the younger families who grew up in the area and are drawn back by the fond memories they hold.
“It’s very much a family-focused suburb; it’s the type of place where children still ride their bikes around the neighbourhood and families go for walks to simply admire the charming streets,” says Jordan.
Median house prices in Chelmer have increased by 47.1 per cent year-on-year. Photo: Supplied
“The natural beauty, varied demographic, and desirable lifestyle are the key factors in Chelmer’s desirability, along with the great local schools and its own train station.”
Domain’s latest House Price Report reveals Chelmer’s median house price is $1.765 million, rising 47.1 per cent year-on-year.
In Jordan’s opinion, the suburb’s wonderful sense of community and growing amenities are what keep the buyers strong and unwavering.
“There are many restaurants and cafes to enjoy – such as Botellon Tapas & Wine Bar, Boucher French Bistro, Hunter & Scout Cafe – with most businesses being owned by locals who live in the area,” Jordan explains.
“The number of nice parks, including Graceville Memorial Park and Gordon Thomson Park, leads many local families to become members of a variety of sporting clubs, ranging from cricket to rugby, which of course only adds to the area’s team spirit.”
Originally from country Victoria, Andrew Thomson has lived in Chelmer virtually all of his adult life, moving to the area 20 years ago, where he would buy a house and raise his family.
Having grown deep roots in the area since, Thomson is now the president of the local Australian rules football club – the Sherwood Magpies – a great hub for kids and adults alike, regardless of whether they play football.
“Chelmer’s strong sense of community is an integral part of this area, particularly during the devastation of the 2011 floods and the recent repeat of that on a lesser scale in 2022. When the clubhouse was threatened by rising floodwater, all it took was one quick post on social media and 100 people were there within 30 minutes ready to lend a hand,” recalls Thomson.
“It was amazing, though unsurprising to see, and it goes hand in hand with living in such a connected community and being part of a sporting club that sits at its heart.”
Given Chelmer’s abundance of green space and the clear separation thanks to the winding Brisbane River, Thomson notes how the area is akin to a peaceful peninsula, seemingly a world away from the city, but in reality, just a 10-minute drive from the Brisbane CBD.
“Ideal mornings may include a bike ride on the river loop or a stroll along the riverside, followed by a coffee stop at one of the many fantastic cafes,” says Thomson.
“Spring is particularly delightful, with great weather, the excitement of footy finals, and the smell of freshly cut lawns and suburban barbecues – it doesn’t get any better.”
Developers to swoop on one of the largest sites in the Woolloongabba Olympic precinct
A large development site in the heart of the Woolloongabba Olympic precinct is up for sale, with price expectations in excess of $45 million.
The 1.28-hectare rectangular shaped development site at 73 Ipswich Road in Woolloongabba is expected to attract apartment developers given its central location at the heart of the planned infrastructure in the precinct.
The site has three street frontages, to Ipswich Road and Henry Street and offers multiple development outcomes including residential, commercial, medical and hotel, subject to council approval.
Knight Frank agents Blake Goddard, Christian Sandstrom and Matt Barker in conjunction with Nathan Moore of Ray White Commercial Bayside on behalf of the vendor, a local private.
Goddard said the property was one of the largest privately owned infill sites within a two-kilometre radius of the Brisbane CBD and was expected to be hotly contested by buyers.
“We expect a wide range of developers to be interested in this site, including residential, commercial, mixed-use and build-to-rent developers, due to its flexible zoning allowances,” he said.
“It is one of the largest privately-owned properties situated in the heart of the Woolloongabba Olympic precinct, close to the Cross River Rail and the redevelopment of ‘the Gabba’ stadium, and one of the most significant development opportunities to have hit the market in the last few years.
“Quality development sites are sought after in the current market, but this site will be even more attractive to a wide range of buyers due to the rarity of size and location. The Gabba stadium and surrounding precinct is set to undergo major transformation in the coming years with over $1 billion allocated to the precinct.”
Moore said the property benefitted from its three-street frontage, easy access to major. arterial roads including Ipswich Road and the M1 Pacific Motorway, and the fact that a majority of it was undeveloped.
“The property is set to benefit from its prime location underpinned by exceptional future development opportunities in the area surrounding the 2032 Olympics,” he said.
The site is surrounded by nearby amenity including The Gabba, the Logan Road dining precinct and the Cross River Rail station upon completion.
“The three-street frontage site enjoys a strategic location within Woolloongabba, offering unrivalled amenity along with extensive surrounding transport infrastructure and development,” he added.
Residential Landscaping Ideas to Increase Your Brisbane Property Value
One of the top trends in home renovations this year is to improve outdoor living – transforming spaces into inviting areas to maximise outdoor living and entertainment activities. Residential landscaping, which can boost the value of a property in Australia, is one of those important transformations.
If done right, it can even increase the value of your real estate by up to 28%. From planting grass to creating a vegetable garden, there are several landscaping ideas that could make your backyard a delightful green oasis.
Well-Maintained Turf A well-maintained landscape offers several benefits. It improves the curb appeal of a home and is pleasing to the eye. In addition, it immediately increases the value of a home. Landscaping involves planting and maintaining grass on your lawn. A manicured lawn is not only a sight for sore eyes, but it also enhances the overall appearance of a property.
However, before planting anything on your property, it is vital to prepare a coherent design and plan because a landscape that is assembled in piecemeal looks cluttered and unappealing. Hence, if you can afford to hire a professional landscape designer, do so because they can come up with a master plan that will make your yard look organized and beautiful.
It is also possible to do the landscaping yourself if you’re willing to do the extra work and effort. Even with a small budget, you can present a lovely landscape that looks well put together. Once you identify where to put your grass, ensure that it remains verdant and properly maintained.
Regular mowing, watering, weeding, and fertilisation are what it takes to keep your turf lush and green. Having the right type of grass also matters. For example, Buffalo and Couch are some types of grass that grow well in Australian conditions.
Trees and Shrubs Second to a well-manicured lawn, potential buyers will also look at the maturity of a garden. Thus, plant trees and shrubs in strategic places, but before choosing the vegetation, ensure that you know which locations are sunny and shady in the garden. You can then choose the appropriate plants for those conditions. It’s also a good idea to opt for native plants.
They are easy to grow and are suitable for the challenging Australian climate. In addition, local plants support a healthy environment because you won’t need fertilisers and pesticides to keep them healthy, not to mention preserving biodiversity through a native garden.
Trees also make your home look fabulous in addition to providing shade, offering privacy, attracting bees, and creating shelter for birds. Consider planting a crepe myrtle, a hardy tree that gives stunning summer flowers and bright autumn foliage. It can be grown in the ground or pot.
Other species that will give a gorgeous vibe to your garden include the ornamental prunus, evergreen magnolias, frangipani, and blueberry ash. Don’t forget to make flower beds which can be a mixture of annuals and perennials to make your garden pop with colour.
Landscaping your property entails a concerted approach and effort to ensure a harmonious outcome. Maintaining a verdant lawn, planting trees and shrubs, and including flower beds are some ideas to improve the look of your outdoor space.