The Brisbane Property Market in 2020
Brisbane is coming off a sustained period of moderate growth – approx. 3.2% per annum since the last trough in March 2013. So what’s in store for 2020? Will we finally see the long-awaited surge in prices?
Firstly, what are the experts predicting?
SQM Research is predicting between 3-6% increase in prices and 3-5% increase in rents.
BIS Oxford is predicting 20% growth over 3 years, however 2020 is expected to be the weakest of the three years. Both reports generally marry up with each other, each noting that there is too much stock currently on the market for a major property boom in Brisbane
National settings are favourable for growth, with employment high, population growth strong, interest rates at record lows, and banks now making it easier to borrow. Looking at the key statistics for Brisbane, they indicate a broadly positive trend in 2020 without the market getting carried away.
Vacancy Rates have declined from their peak in 2017, following the surge of construction from 2015 onwards, particularly in the apartment market. This is starting to flow through into increased rents, although the effect so far has been modest.
Stock on market has remained steady, it’s increased slightly in numbers over the past decade but this mirrors the growth in the total number of properties in Brisbane. It looks like the apartment oversupply issues of the last few years have been absorbed into the market, but the number of listings will need to come down more before we see a genuine boom in prices.
Detached Houses are the strongest market in Brisbane, although the unit market has now bottomed and offers excellent value for the right kind of property.
What’s happening on the ground? I’m seeing increased activity in the inner city housing market, particularly in the more affordable $600,000-800,000 dollar mark. First home buyers seem particularly active. Detached housing between $400,000-600,000 is steady, with demand matching supply in most areas. The higher end is relatively soft, as are units, although we appear to have hit the bottom of that market, and the right stock is being picked up quickly.
There are two x-factors in the market at the moment, both of which play into each other. The first is investor activity. After a long period of underperformance compared to Sydney and Melbourne, investor numbers in Brisbane are much lower. A big increase in these numbers is needed it there is going to be a serious and sustained boom
The second x-factor is COVID-19. This is a short-term phenomenon rather than a long-term one, so it shouldn't really have an impact on buyer and seller behaviour, which is determined by long-term considerations. However, with the stock market in free-fall and people still struggling to gauge the virus’ true impact, will buyers stay on the sidelines? I personally don’t think
So what’s my advice for 2020? If you’re jumping into the market for speculative growth, you’d be better off buying in Sydney or Melbourne, both of which are tipped to rise faster in 2020. But if your focus is on the long-term, and you’re looking to acquire a property with strong fundamentals, then Brisbane still offers excellent value.
I recommend focusing on securing properties with a large component of high performing land, in as good a suburb as you can afford. This can be a house, a townhouse or an apartment – all are at the right stage of the property cycle – but if you’re buying a townhouse or apartment, make sure it’s in a high-quality inner suburb with limited future supply.
You should get some decent short-medium term growth, and you’ll be positioned well for the long-term, where high-quality and scarce land in the right locations has consistently proved to be the best performing type of property asset.