APPD Market Report Article

Brisbane

May 31, 2022

6.5%

AUD 490

Rents
Rising

Demand continues to strengthen for Brisbane apartments

  • Smaller scale/high-end developments, predominately targeting owner-occupiers continued to perform well and are achieving strong sales rates. Indeed, several projects that launched in the second half of 2021 have almost or completely sold out in a matter of months.​ Demand also continues to broaden, with investors also increasingly entering the market.
  • Quarterly sales volumes in 4Q21 were 75% higher than in 4Q20 (CoreLogic). Around 5,750 apartments transacted in 4Q21, compared to less than 3,300 units in 4Q20.​ Annual apartment sales volumes rose 89% over 2021 (CoreLogic). Reflecting more than 19,600 apartment transactions in 2021, compared to just 10,400 in 2020.​

Limited new supply will continue to support the apartment market

  • Construction delays have led to many project completions being delayed into 2022. As such, notwithstanding further delays, supply is expected to rise in 2022 for the first time since 2016. However, despite the rise, the level of completions will stay moderate for at least several more years.
  • Rental vacancy across Greater Brisbane remains a very tight 0.7% in March 2022 (SQM Research). While vacancy is more elevated in the CBD (1.7%), it has been trending down for some time and has tightened significantly. Low vacancy has led to strong rental growth with momentum expected to continue in 2022. ​

Brisbane unit price growth is the strongest of east coast cities

  • Brisbane existing apartment prices continue to gain momentum, rising 4.6% over the three months to March 2022 to be 15.1% higher in annual terms (CoreLogic).​
  • Rental yields fell moderately (-10 bps) over 2021 (CoreLogic). This is largely due to downward pressure on rents at the onset of COVID-19 and a slightly faster recovery of prices than rents.​

Outlook: Strong fundamentals to support market momentum in 2022

  • Increasing interstate migration has undoubtedly supported demand already, but population growth is expected to gain further momentum in 2022 now that international borders are open. Investor demand should also rise, supported by strong fundamentals, low interest rates and attractive investment yields.
  • Rental vacancy rates are likely to fall further now as international borders open and rental growth to intensify quickly. Continued growth in apartment prices is also likely to be supported by demand shifting from houses to apartments as interest rates rise, with a relatively wide price differential between detached house and apartment prices at present.​

Note: Brisbane Residential refers to Inner Brisbane apartments. Pricing data sourced from CoreLogic. Vacancy data sourced from REIQ. Rental data sourced from The Queensland Rental Tenancy Authority.

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