Brisbane Market Update - The Real State of Real Estate
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Brisbane Market Update The Real State of Real Estate
Agenda • National Consumer Confidence • Home loan affordability index • Update from the Reserve Bank of Australia • PRD Property Market Sentiment Indicator • Eastern seaboard median price comparison • Brisbane Market Update • Median property price comparison • Property clock • Rental market and investment analysis • Project development activity
Australian Consumer Confidence
120.0
Feb-20 Overview
105.0 • 95.9 index points at Feb-20
Consumer Sentiment Index
• A reading above 100.0 indicates
positive sentiment
90.0
• 12-month average of 97.8,
meaning consumer confidence
75.0 is sitting slightly below positive
• Cautious consumers may result
in less spending in various areas
60.0
– retail, goods and services, and
Feb-2014
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Feb-2022
May-2022
Aug-2022
Nov-2022
Feb-2023
May-2023
Aug-2023
Nov-2023
Feb-2024
may have an impact on real
estate related decisions
Australian Consumer Sentiment Six Months Moving Average
Last updated February 2019.
Prepared by PRD Research. Source: Westpac-Melbourne Institute.Home Loan Affordability Index
70
Overview
• Higher readings indicate greater
affordability
Home loan affordability indicator
53
• NSW up by +1.2 to 36.7 in 12
months to Sep-19
35
• AUS up by +0.9 to 32.8 in 12
months to Sep-19
18
• QLD affordability index has
strengthened, giving an
opportunity for first home buyers
0
• An increase in home loan
Dec-91
Sept-92
Jun-93
Mar-94
Dec-94
Sept-95
Jun-96
Mar-97
Dec-97
Sept-98
Jun-99
Mar-00
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Dec-15
Sept-16
Jun-17
Mar-18
Dec-18
Sept-19
Jun-20
Mar-21
Dec-21
Sept-22
Jun-23
affordability index is good news
New South Wales Victoria Queensland Tasmania Australia
for those wanting to enter the
market
Prepared by PRD Research. Source: Real Estate Institute of Australia.Reserve Bank of Australia – Housing Market
Overview
• The market continues to be in “recovery mode” with the
established housing market strengthening further.
• House price growth has picked up in most capital cities
and regions. Despite speculation this is due solely to
lower interest rates, wide variation in prices nationally
suggest fundamentals (population growth, income, &
supply-side constraints) remain the key drivers.
• Auction clearance rates picked up at the end of 2019.
New listings have increased & price rises encouraged
sellers to enter the market. Housing turnover rate has
increased notably since mid-2019, and total households
expecting house prices to rise in 2020 have increased.
• Owner-occupiers still dominate the market, with owner-
occupier loan commitments outpacing investors.
Source: Reserve Bank of Australia. Prepared by PRD Research.Reserve Bank of Australia – Cash Rate
Overview
• Central banks globally suggesting
monetary policy will be left as-is for
now, though advanced economies
have signalled they are prepared
to lower the cash rate if necessary.
• The RBA can go down with two
cash rate cuts (to 0.25%) before it
reaches an uncomfortable position
for international financial market
trading/dynamics.
• When the cuts would will happen
is not certain, but the 1st review is
expected for April, once Q1 2020
has passed, to see the full effect of
Source: Reserve Bank of Australia. Prepared by PRD Research.
the bushfires and coronavirus.PRD Property Market Sentiment Indicator
60% 12 Month Overview
• NSW positive sentiment declined
by 3%, from 40% in 2H 2018 to
45% 37% in 2H 2019
• QLD positive sentiment
30%
strengthened by 6%, from 36% in
2H 2018 to 42% in 2H 2019
• VIC positive sentiment significantly
15% strengthened by 16%, from 41% in
2H 2018 to 57% in 2H 2019
• Victoria and Queensland shows
0%
National QLD NSW VIC stronger positive sentiment growth
2H 2018 2H 2019 when compared to NSW
Disclaimer: Office, State, and National market sentiment figures refer to areas analysed in PRD Market Update reports only. Sentiment is based on percentage of upward/downward
arrows which capture house/unit total sales, median sale price growth and median rental price growth. Prepared by PRD Research. Source: Real Estate Institute of Australia.Eastern Seaboard Median Price Comparison
$900,000 Overview
• QLD median house price show
steady growth over the past 10
$675,000 years
Median House Price
• Over the last 12 months, QLD
median house price softened by
$450,000
-2.2%
• NSW median house price
$225,000 softened by -3.5% and VIC
softened by -5.5%
• QLD proves to be a more resilient
$0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 market compared to NSW and
QLD Median House Price NSW Median House Price VIC Median House Price VIC
*2019 medians are only for the period Q1 2019 – Q3 2019 due to dataset limitations.
Prepared by PRD Research. Source: Pricefinder.Brisbane Median House Price Comparison
$700,000 Overview
• Over the past 10 years, Brisbane
Metro* has outperformed both
$525,000 Greater Brisbane** and
Queensland in regards to median
Median House Price
house price growth
$350,000
• Brisbane Metro’s* median house
price was stable over the past 12
months, indicating market
$175,000
resilience throughout a cooling
period
$0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Brisbane Metro* Greater Brisbane** Queensland
Disclaimer: *Brisbane Metro is comprised of all the suburbs within the Brisbane City Local Government Area (LGA).
**Greater Brisbane is an amalgamation of the following areas: Brisbane City LGA, Ipswich City LGA, Logan City LGA, Moreton Bay LGA and Redland City LGA.
Prepared by PRD Research. Source: Pricefinder.Median Property Prices – Brisbane Metro*
$700,000 20,000
2019 Overview
• House $689,000
$525,000 15,000 o 1Y: $0 (0.0%)
o 5Y: +$99,000 (+16.8%)
o 10Y: +$189,000 (+37.8%)
$350,000 10,000
• Unit $445,000
o 1Y: -$5,000 (-1.1%)
$175,000 5,000 o 5Y: -$1,450 (-0.3%)
o 10Y: +$52,000 (+13.2%)
• Vacant Land $405,000
$0 0
0 o 1Y: -$7,000 (-1.7%)
House Sales House Median Price Unit Sales Unit Median Price Land Sales o 5Y: +$67,500 (+20.0%)
Land Median Price
o 10Y: +$125,000 (+44.6%)
Disclaimer: *Brisbane Metro is comprised of all the suburbs within the Brisbane City LGA.
Prepared by PRD Research. Source: Pricefinder.Brisbane Metro Property Clock – 2nd Half 2019
Property Clock - Houses Property Clock - Units
• Both the house and unit markets
Peak
Peak have bottomed out, now leaning
towards an upswing position
• Consumer confidence has
increased since Federal election
in May 2019
Upswing Downswing Upswing Downswing
• Over the 7 years to 2018,
Brisbane experienced population
growth of 15.2%
• Population growth, low interest
Bottom Bottom
rates and lenient lending by
banks will have a positive spill-
over effect to the property
market’s recovery
Prepared by PRD Research.Rental Performance – Brisbane Metro*
4
2019 Overview
• Over the past 12 months to Q4
3
2019, median house rental price
strengthened by 4.0% to $473 per
week
2 • Median unit rental prices have
been stable over the same period,
at $378 per week
1
• Overall, Brisbane’s rental market
has been resilient, supported by
low trending vacancy rates
0
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
Unit Rentals
Disclaimer: *Brisbane Metro is comprised of all the suburbs within the Brisbane City LGA.
Prepared by PRD Research. Source: Pricefinder.Vacancy Rates – Comparison
4.0%
Dec-19 Overview
• Brisbane Metro* 2.9%
3.0%
• Sydney Metro 3.6%
• Melbourne Metro 2.5%
2.0%
• Overall, Brisbane Metro and
Melbourne Metro vacancy rates
1.0% have decreased over the past 3
years, whereas Sydney Metro’s
vacancy rate continues to climb
0.0%
20132013 201420142015 201520162016 201720172018 20182019 201920202020 202120212022 202220232023
Brisbane Metro* Sydney Metro Melbourne Metro
Disclaimer: *Brisbane Metro is comprised of all the suburbs within the Brisbane City LGA.
Prepared by PRD Research. Source: SQM Research.House Rental Yields – Comparison
5.0%
Dec-19 Overview
• Brisbane Metro 3.8%
3.8%
• Sydney Metro 2.7%
• Melbourne Metro 2.7%
2.5%
• Brisbane Metro* offers higher
returns than Sydney Metro and
1.3% Melbourne Metro, at a far more
affordable entry price.
0.0% • Investors are encouraged to take
2013 20132014 201420152015 20162016 20172017 201820182019 20192020 202020212021 20222022 20232023
Brisbane Metro* Sydney Metro Melbourne Metro
this opportunity to enter the
Brisbane property market.
Disclaimer: *Brisbane Metro is comprised of all the suburbs within the Brisbane City LGA.
Prepared by PRD Research. Source: SQM Research.Brisbane West Suburb Performance Comparison
Suburb
Median House
Price 2018
Median House
Price 2019
Annual Price
Growth
Rental Yield Vacancy Rate Overview
Auchenflower $1,200,000 $1,065,000 -11.3% 2.9% 5.1% • Brisbane’s West**, on average,
Bardon $1,000,000 $986,000 -1.4% 4.0% 2.8% outperforms the Brisbane Metro*
in both median house price and
Chapel Hill $825,000 $800,000 -3.0% 3.6% 5.1%
price growth.
Indooroopilly $880,000 $930,000 5.7% 3.3% 4.3%
Kenmore $733,000 $710,000 -3.1% 3.6% 5.1%
• Over the last 12 months, Brisbane
Metro* overall has sustained its
Paddington $1,160,000 $1,190,000 2.6% 3.6% 3.2% median price through an
Red Hill $900,000 $847,000 -5.9% 2.9% 5.9% economic downturn.
Saint Lucia $1,140,000 $1,154,000 1.2% 3.0% 9.1%
• Investors in Brisbane’s West**
Taringa $875,000 $900,000 2.9% 3.5% 4.3% area are encouraged to secure
Toowong $885,000 $900,000 1.7% 2.9% 5.1% long term tenants as vacancy
rates are higher than the average
Brisbane West** $892,500 $915,000 2.5% 3.3% 5.0%
Brisbane Metro*
Brisbane Metro* $689,000 $690,000 0.1% 3.9% 2.9%
Disclaimer: *Brisbane Metro is comprised of all the suburbs within the Brisbane City LGA.
The area **Brisbane – West is based on an average of the median house prices of the suburbs: Auchenflower, Bardon, Chapel Hill, Indooroopilly, Kenmore, Paddington, Red Hill, Saint Lucia, Taringa and Toowong.
Prepared by PRD Research. Source: Pricefinder, SQM Research.Development Pipeline – Brisbane Metro*
1st Half
2015
1st Half
2016
1st Half
2017
1st Half
2018
1st Half
2019
1st Half
2020**
1st Half
2021**
Overview
• Large project developments
Commercial $5.3B $3.2B $1.1B $0.9B $911.1M $1.3B $1.0B
expenditure is being injected into
Brisbane’s economy.
Industrial $500.0M - $200.0M - $210.8M $117.7M $66.6M • Major Infrastructure investment set
for 2020 (Cross River Rail Integration
Infrastructure $13.4B $2.0B $1.9B $900.0M $392.3M $2.0B $729.0M
and Systems Package , $1.0B).
• Major Infrastructure investment set
Mixed-use - $1.0B $700.0M $700.0M $1.5B $614.8M $1.1B for 2021 (Brisbane Live Indoor
Entertainment Arena, $2.0B).
Residential $9.2B $1.8B $1.4B $1.3B $1.4B $1.2B $652.6M
Total $28.4B $8.0B $5.3B $3.8B $4.4B $9.4B $3.6B
Disclaimer: *Brisbane Metro is comprised of all the suburbs within the Brisbane Local Government (LGA). Estimated values are based on construction value provided by the relevant data authority and does not reflect commercial and/or re-sale value.
Commencement year quoted for each project is an approximate only, as provided by the relevant data authority. **2020 and 2021 values are based on known data as provided by Cordell Connect, as per January 2020 data download. Prepared by PRD
Research. Source: Cordell Connect Database.Project Development – Annual Comparison
Overview
2020 2021 • There has been a shift in focus
0.0143
within the Brisbane Metro*
0.0426
• 2020 – Combined focus on
0.2647
infrastructure and commercial
0.1714
0.2621
Commercial
Residential
spending
Mixed-use 0.3952
Infrastructure • 2021 – Predominantly
0.1912
Industrial infrastructure spending
0.1913 0.2394 • This results in improving
0.2279
amenities, productivity and local
employment opportunities
• Positive spill-over effects for the
Disclaimer: Estimated values are based on construction value provided by the relevant data authority and does not reflect commercial and/or re-sale value. real estate market
Commencement date quoted for each project is approximate only, as provided by the relevant data authority in January 2020, PRDnationwide does not hold
any liability to the exact date. Prepared by PRD Research. Source: Cordell Connect Database.2020-21 Development Map- Brisbane West*
Location Project** Type Estimated
LEGEND Value***
Commercial
Infrastructure 1 Tricare Taringa Stages 1-2b Commercial $50,000,000
Industrial
2 Aura Retirement Facility -
Mixed-use Commercial $50,000,000
Somerset
Residential
3 Moggill Road Roundabout
Infrastructure $25,000,000
Upgrade
4 Auchenflower Station
Infrastructure $1,000,000
Accessibility Upgrade
5 High, Jephson & Sherood Sts
Mixed-use $100,000,000
Development Stages 1-3
6 Coronation Drive & Archer
Mixed-use $39,000,000
Street Mixed Use Building
7 Grace On Coronation (555
Residential $200,000,000
Units)
8 Keating Park Residential
Residential $35,000,000
Development (98 Units)Stay up to date with the latest property research PRD.com.au/research
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