The fundamentals look solid across the country. But in Brisbane, they look amazing.
I’ve said many times over the years that of all the capitals, Brisbane has the most potential.
And it’s not that I just have a soft spot for the city. As a market, the numbers stack up.
But since saying that, Brisbane prices are up 35% on their pre-Covid levels. (To everyone who listened to me, you’re welcome.)
So is there still head room there? Is Brisbane’s time in the sun over?
Well, I don’t think so. In fact, I still reckon it has the best metrics of all the capital cities.
First up, the rental market remains incredibly tight, and is actually getting tighter, despite every other capital going the other way.
PropTrack’s latest rental report, released last week, showed that Brisbane was the only major capital city to experience a decline in vacancy rate over the month and quarter:
Brisbane’s rental vacancy rate (1.12%) is also the lowest of the east coast capitals. That tightness will translate into increased first-buyer demand, as young people look to escape the rental squeeze.
To wit, according to the Courier Mail, “open homes on weekends are overrun with buyers — an increasing number of whom are desperate long-term renters resorting to dipping into their savings or going into debt to try and escape the rental crisis”.
Ray White chief economist Nerida Conisbee told the paper that renters were realising there was no escaping soaring rents and many now see home ownership as their only alternative.
“Brisbane is also so much hotter than the rest of the market. It’s very different to Melbourne and Sydney because it’s seen such strong population growth, and now international migration is back, so that FOMO’s probably even more problematic (for buyers)”, Conisbee said.
CoreLogic’s daily dwelling values index confirm that Brisbane is entering a big bull market.
Brisbane dwelling values are already rising at the second strongest pace, behind Sydney, with values lifting 3.9% over the past quarter:
And the key driver here – the thing that is going to set Brisbane apart from the other capitals – is population growth.
Queensland (read Brisbane) led the nation’s population growth over the pandemic, thanks to strong internal migration:
And one of the key things pulling people north is the affordability dividend.
Brisbane’s dwelling values are still much cheaper than Sydney’s and Melbourne’s and should result in even more southerners moving north.
I mean, Brisbane’s median house price is only 57% of Sydney’s median house price, according to Domain:
Is living in Brisbane 57% less good than living in Sydney? Are wages in Brisbane 57% less than they are in Sydney?
No. So that differential can’t last.
And so because Brisbane housing is still relatively affordable, there should be more upside for Brisbane property values over the longer-term relative to its two larger southern cousins.
And just to slap a cherry on top, the 2032 Olympics will also spur infrastructure investment and cement Brisbane as a global city, which could lead to more interest from foreign buyers.
Seriously. What’s not to like?
I like Brisbane. I like Brisbane a lot.