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Affordable & Liveable Property Guide 1st Half 2021 - Brisbane

Overview

Median property prices in Brisbane Metro increased by 11.5% for houses to $725,000 from Q1 2020 to Q1 20211, and by 0.2% for units at $455,000. Across the same period, total sales in Brisbane Metro increased by 1.9% (to 4,555 sales) for houses, and by 7.6% (to 1,802 sales) for units. Brisbane Metro’s median price activity has been driven by interstate migration to the city, creating more demand alongside record low interest rates.

Brisbane Metro’s median price growth occurred amidst increased sales activity, giving confidence in the local market’s real returns in capital investment. This is further confirmed by a decline in average days on the market by -23.6% (to 42 days).

A key finding in this report was that all affordable and liveable suburbs identified were diversified within the north and south side of Brisbane Metro. In previous reports, there has been a large focus on the northside for affordable and liveable suburbs.

Another interesting finding is that majority of the chosen affordable and liveable suburbs are located within the middle-outer ring of the Brisbane CBD. This is a clear indication of the large move out of the CBD due to flexible working arrangements, further confirmed by record low vacancy rates in middle-outer ring areas.

Table 1 highlights top suburbs in Brisbane Metro, based on price growth and total estimated value of projects commencing in the 1st half of 20212.


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Access to Market

The dominant proportion of homes sold in Brisbane Metro across 2020/211 were in the premium price bracket of $850,000 and above (28.7%). Units recorded a dominant lowest price bracket of less than $399,999 (36.3%). There is a split market in both property types, with premium and lower end markets making up sales almost equally. Overall, this suggests that there is a home for all budgets.

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Affordable & Liveable Suburbs

To identify affordable and liveable suburbs, premiums of 49% for houses and -4% for units were added to the Queensland (QLD) average home loan, which were below those required to reach Brisbane Metro’s median prices (65% for houses and 4% for units). Thus, the chosen suburbs have a median price below that of Brisbane Metro’s, meaning that the suburbs identified within this report are more affordable for buyers.

Considering all methodology criteria (property trends, investment, affordability, development, and liveability), Tables 2 and 3 identify key suburbs that property watchers should focus on.

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Investment Opportunities

In March 2021, house rental yields in Brisbane Metro were recorded at 3.8%. In the 12 months to Q1 2021, the median house rental price increased by 7.7% to $490 per week, coupled with average days on the market declining by -30.8% (to 18 days).

In March 2021, Brisbane Metro recorded a low vacancy rate of 1.5%, well below that of Sydney Metro (3.4%) and Melbourne Metro (4.4%). Vacancy rates in Brisbane Metro remained well below the Real Estate Institute of Australia’s healthy benchmark of 3.0%, even throughout COVID-19. Furthermore, Brisbane Metro’s vacancy rate has shown a declining trend since peaking in April 2020 due to COVID-19, signifying a healthier rental demand and quicker cashflow for investors.

Overall, the Brisbane Metro rental house market has shown strong growth and resilience throughout COVID-19. This provides greater confidence to investors considering Brisbane Metro.

Methodology

This affordable and liveable property guide for Brisbane Metro analyses all suburbs within a 20km radius of Brisbane CBD. The following criteria were considered:

  • Property trends criteria – all suburbs have a minimum of 20 sales transactions for statistical reliability purposes. Based on market conditions, suburbs have either positive or as close as possible to neutral price growth between 2019 to 2020/211.
  • Investment criteria – as of March 2021, suburbs considered will have an on-par or higher rental yield than Brisbane Metro, and an on-par or lower vacancy rate.
  • Affordability criteria – identified affordable and liveable suburbs have a median price below a set threshold. This was determined by adding percentage premiums to the Queensland (QLD) average home loan, which was $438,1313 as of Q4 2020. Premiums of 49% for houses and -4% for units were added, which were below those required to reach Brisbane Metro’s median prices (65% for houses and 4% for units). This places the chosen suburbs below Brisbane’s median prices, meaning that the suburbs identified within this report are more affordable for buyers.
  • Development criteria – suburbs identified must have a high total estimated value of future project development for the 1st half of 20212, as well as a higher proportion of commercial and infrastructure projects. This ensures the suburbs show signs of sustainable economic growth, in turn positively affecting the property market.
  • Liveability criteria – all identified suburbs have low crime rates, availability of amenities within a 5km radius (i.e. schools, green spaces, public transport, shopping centres and health care facilities), and an unemployment rate on-par or lower in comparison to the QLD average (as determined by the Department of Jobs and Small Business, December Quarter 2020 release).

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PRD Affordable and Liveable Property Guides 1st Half 2021 - Brisbane