The biggest news in this market is the drop in Brisbane’s median house price to below $600,000 – to $580,000 – after a brief flirtation of just one quarter at this benchmark.
The small drop, of 3.3 per cent, is largely due to flatter activity in the prestige market following a robust final quarter of 2014.
The first quarter of the year is historically a quieter time for sales activity and that held true in 2015 with total house sales activity down eight per cent.
The long-term trend in sales volumes however remains strong with activity up on the same time last year. This steady growth in sales volumes bodes well for property buyers in the state’s capital city, as price growth has remained in check.
Brisbane’s rental market remains healthy with vacancy rates at the end of March down since the end of 2014. Concerns of an oversupply in the inner city rental market may be eased with new data from the Residential Tenancies Authority pointing toward demand keeping relatively apace of supply.
Over the quarter, Brisbane’s median house price was down 3.3 per cent on the back of a drop in activity most notably in the upper end of the market. Sales in the $500,000 and $1 million-plus price points recorded larger drops in preliminary numbers than was seen in the more affordable price points.
However, figures for the year ending March 2015 clearly show that Brisbane’s house prices are starting to lift, with the median house price up 7.2 per cent compared to the previous year.
The proportion of profit-making sales also continues to trend upwards with 92 per cent of vendors in Brisbane over the year to February achieving a sale price higher than what they originally paid.
Along with improving days on market and vendor discounting rates, listing numbers have also now vastly improved as more vendors recognise that now is the time sell. Particularly for up-graders as any price increase they may make on the sale of their current home will also mean paying a higher price for their next home purchase.
In line with general trends during an upswing in the market, it’s the inner city suburbs that are taking the lead in terms of median price growth. The likes of Highgate Hill, Teneriffe and Balmoral top the list with more than 30 per cent growth in the median house price compared to five years ago.
While the house market took a breather over the quarter, unit and townhouse sales were up, with both inner and outer ring suburbs performing well. Inner suburbs of Kangaroo Point, Morningside, Indooroopilly and St Lucia all saw an increase in buyer activity while Chermside and Eight Mile Plains both recorded 11 more preliminary unit sales compared with the previous quarter.
Time on market also continues to improve for Brisbane’s unit and townhouse market. Unit listings are spending on average two weeks fewer on the market compared with a year ago, while vendors now only have to drop their original list price by an average 4.7 per cent.
Buyer activity was also most prominent in the $350,000- plus price point, up 41 sales compared to the December quarter, as was the $500,000-plus price point. This combined with steady sales in the prestige market saw the overall median unit and townhouse price increase 1.4 per cent over the quarter.
At the end of March, Brisbane City recorded a vacancy rate of 2.5 per cent, with both the inner and outer suburbs recording a drop compared to the end of December.
According to local agents, the outer ring suburbs are receiving increased tenant demand from those being priced out of the inner suburbs or simply wanting to get more for their money.
The continued supply of new apartments in the inner city remains a concern however REIQ analysis of approximate new dwelling counts from against the increase in total bonds held by the RTA show that tenant demand is there.
Local agents in the inner Brisbane area also say that minimising vacancy levels is paramount to the viability of the residential letting agency business managing each new apartment. Good relationship management with their new landlords, coupled with offering rental incentives to prospective tenants, is said to contribute significantly to keeping vacancy levels low