Brisbane house prices hit record high median of $1.2 million
The cost of a typical Brisbane unit has risen by almost $40,000 in three months to surpass the $800,000 mark.
Brisbane’s average unit price rose 4.9 per cent from the March quarter to $800,500; That’s a record figure, according to Domain’s latest House Price Report, published on Thursday.
Prices are approaching Sydney prices, where the average unit costs $848,227, as entry-level demand, tight supply and worsening affordability are rapidly reshaping the market.
In five years, Brisbane’s average unit price has almost doubled; This is in stark contrast to wage growth of only 15 to 18 percent.
House prices in Brisbane also hit a new high, climbing $49,311 (or 4.2 per cent) in the quarter to $1,212,195.
This represents an annual increase of more than $200,000, with home prices nearly doubling in five years.
The result is a market being reshaped in real time by affordability pressures, with buyers being pushed further down and up the price ladder in a desperate scramble to get a foothold within 40 kilometers of the CBD.
Even the city’s prestige sector felt this change; traditionally cheaper suburbs recorded the biggest gains adjacent to the most expensive areas.
In the Logan area, the Springwood-Kingston SA3 average unit price rose by $74,000 in the three months to $620,000, up 13.6%, up 37% year-on-year.
At the suburban level, Redcliffe homes were among Queensland’s best annual performers, rising 42 per cent to $980,000; Auchenflower homes increased by 34.7 percent to $2.1 million.
Domain research and economics chief Dr. “The key takeaway is that units continue to outperform housing and that is a trend we have seen over the last two years, which is quite unusual,” Nicola Powell said.
“And the unit price difference between Sydney and Brisbane is the lowest we have ever seen.”
Sydney units rose just 0.6 per cent in the quarter, while Melbourne units fell 0.4 per cent. Both cities experienced a decline in house prices in the March quarter.
But while Brisbane remains one of the strongest performing capital cities, Powell said momentum was waning.
“So we’re seeing some loss of momentum, but the problem is there’s still demand and there’s still a lack of inventory.”
Domain’s report showed that the sharpest growth was concentrated at the lower end of the market, with smaller homes leading the way. One-bedroom units rose 27.5 percent in one year to $670,000.
“There’s been significant growth even for smaller homes, and that really suggests to me that borrowing capacity is really tightening and demand is being driven to a lower price point,” Powell said, adding that it could also reflect the federal government’s first-home purchase plans that allow for lower deposits.
Despite ongoing supply constraints, Powell expected price growth to moderate further.
Paul Perde, chief executive and director of One Group, said the market had cooled in recent weeks and the coming quarter would offer a clearer read on conditions.
He said a strong start to the year had nearly ground to a halt in early April due to global uncertainty, interest rate pressures and the Easter slowdown, but he expected conditions to stabilize.
“The main challenge we all face is a lack of stock, and while our days on market are increasing, we still have nowhere to live,” he said.
“And that will ultimately create more stress in the market. But right now, we have a short-term opportunity and I think we’ll have some breathing room on growth.”
Perde said one-bedroom units are coming to the fore, while the rise in prestigious listings could start to put pressure on prices at the higher end.
“I think the thing the market will have to react to the most will be interest rates… and if we see three, four or five, that could drive buyers out of the market,” he said.
Despite signs of a slowdown, the city’s top end still made strong gains for the year; The median home price in 11 suburbs now hovers at $2 million or more.
New Farm remains the most expensive; While house prices increased by 14.9 percent over the year to $3.35 million, Ascot increased by 26.4 percent to $2.55 million.
Auchenflower has outperformed both, driven by a wave of high-end development that has capitalized on the long-overlooked appeal of the suburbs and moved ahead of neighboring Paddington, where the median house price is $2,054,500.
Ray White Collective’s Josh Brown set a new suburban price record in March. 58 Thomas StreetIt was sold to a local buyer for $6.5 million. Auchenflower takes years to grow, he said.
“This is a suburb supported by great transport and a high level of amenity in neighboring suburbs,” he said.
“And confidence in the market and the suburbs grew to the point where developers were happy to spend the money there.”
Ray White agent Ben Campbell at Redcliffe said downsizers were the main driver of growth in the unit.
But while the peninsula’s growing appeal is bringing more buyers from other parts of the city, Campbell admitted the price increases still surprise him.
“I bought a unit here three years ago and paid $470,000 for it then, now it’s worth close to $800,000,” he said.
“The first quarter of the year was one of our strongest ever… We are also seeing more buyers from north of Brisbane and the lifestyle is attracting them here.”
