This changing of the guard was revealed by CoreLogic’s latest Home Value Index (HVI) released on Monday.
With Brisbane housing values consistently posting solid capital gains, the Queensland capital surged ahead of Canberra, where prices remain relatively stable, having the second-highest median dwelling value across the capitals in May.
The last time Brisbane held this position was in 1997, and for much of the last 20 years has been seen as a much cheaper alternative than its southern counterparts.
Following a 1.4% monthly lift, Brisbane’s median dwelling price currently stands at $843,231, $3,131 higher than Canberra’s $840,100 (also up 0.5% month on month).
The top spot is still held by Sydney, where the median property value surged by another 0.6% to reach over $1.156 million.
These noted price growths drove the nationwide HVI to rise 0.8% in May to $785,556, which in effect added $5,739 to the median home price recorded in April.
This latest price lift marked the index’s 16th consecutive month of increase and the largest monthly gain since October 2023.
The Sunshine State: Australia’s brightest property market
Brisbane has been enjoying its time in the sun being one of Australia’s strongest capital city housing markets.
While it might be a surprise to many, the city’s coming of age has been in fact years in the making.
In January this year, the Sunshine State surpassed Melbourne to take the third-highest median dwelling value among capitals.
“This was partly compositional, with the overall median dwelling value in Melbourne being weighed down by a high concentration of cheap units,” CoreLogic research director Tim Lawless said.
This time, however, Brisbane house values are also higher than the median house values across Melbourne for the first time since June 2008.
The median house value in Brisbane is currently $190 above Melbourne’s, while the median unit price in the former is $1,130 more expensive than the latter’s.
Coming into the pandemic Melbourne’s median dwelling value held around a 37% premium over Brisbane’s, and ACT’s median was approximately 24% higher.
However, Brisbane property prices have increased at more than five times the pace of Melbourne values since March 2020, with growth of 59.8% and 11.2% respectively.
Brisbane has also substantially outpaced growth in the ACT where values are up 31.8% since the onset of Covid.
Brisbane houses to skyrocket to $1m
Domain’s Dr Nicola Powell earlier forecast Brisbane to reach the $1 million median house price tag by 2025, given consistent growth over the past few years.
As per CoreLogic’s May HVI, the median house value in Brisbane is currently $937,479, or $62,521 away from hitting the $1 million mark.
“The boom Brisbane saw during the pandemic was one of those once-in-a-generation property booms, and now the market is gathering momentum and we’re starting to see rising competition,” Dr Powell said.
The research director cited strong immigration and significant infrastructure spending as drivers in cementing the city’s position as one of the nation’s hottest.
“Brisbane was one of the best performers during the pandemic and while Canberra and Hobart did see the biggest percentage gain in the pandemic upswing, Brisbane’s strength was calculated in how shallow the downturn was (during 2022),” she added.
“It was short and sharp, and the impact was quick, and the recovery was steady, but each quarter, it has gained momentum, and our other cities just aren’t seeing that.
No sign of slowdown in the apartment market too
Frustrated homebuyers priced out of the Brisbane house market will be disappointed to know that it is a battlefield in the apartment market as well.
According to Brisbane-based buyers agent Lauren Jones, buyer demand for units in the city has skyrocketed by 5% over the past 12 months, making it one of the most competitive markets in Australia.
According to CoreLogic, lower quartile dwellings – including units – have grown much faster than upper quartile homes across every capital city except Darwin.
Nationwide, upper quartile dwelling values are up 6.7% over the past 12 months, slower compared to the 13.4% gain across the lower quartile of the market.
“After recording a higher rate of gain through the early months of the growth cycle, conditions have faded across the upper quartile as borrowing capacity reduced and affordability constraints deflected towards middle-and-lower-priced properties,” Mr Lawless said.
This means unit values will continue to rise into the foreseeable future.
This is especially true for units located in Greater Brisbane, as Ms Jones’ research suggests the local market has shown better median price growth compared to Melbourne and Sydney over the past year.
“Week after week the LJBA (Lauren Jones Buyers Agency) team runs into the same buyers at open homes as they struggle to compete in the current crazy conditions of Brisbane’s property market,” Ms Jones shared.
Limited supply continues to push home prices up nationwide
As with previous indices, the increase in home values last month is driven by the mismatch between housing supply and demand.
Capital city listings are -16% below the previous five-year average and -2% lower than a year ago
Demand, on the other hand, has tracked 7.2% above the previous five-year average and is 2.8% higher than last year.
“It’s this disconnect between supply and demand that is trumping the downside pressures from interest rates, high inflation, and low sentiment,” Mr Lawless said.
“Despite worsening affordability pressures, from both a purchasing and a rental perspective, Australian residents still need to keep a roof over their heads.
And this imbalance is likely to persist, with new dwelling approvals once again dipping by 0.3% in April.
With only 13,078 dwellings greenlit for construction last month, the government is yet to reach the ideal rate of 20,000 a month to fulfil its goal of building 1.2 million homes over the next five years.
“With the federal government target of 1.2 million homes going live from July 1, we have seen a raft of policy initiatives supporting a housing supply response from both the federal and state governments,” Mr Lawless noted.
“However, considering the high cost of building, capacity constraints, and scarcity of labour, it is likely to take some time to deliver a material rise in dwelling completions.”
Photo by Valeriia Miller on Pexels
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