The Brisbane prestige property market has performed strongly throughout 2020, even in the face of the coronavirus pandemic. We look at where the top end of our local market is at right now and what’s keeping property prices growing.
The resilience of the Brisbane Prestige property market
The Brisbane property market has been experiencing more favourable conditions than property markets in many other parts of the country. In fact, while property values in Sydney and Melbourne have fallen -3.7% and -1.7% over the past three months according to CoreLogic, it’s not been the same here in Brisbane.
The real gains have happened in the prestige areas of Brisbane. For instance, realestate.com.au data shows the median value of houses in Hamilton lifted from $1.49 million in January 2020 to $1.625 million by the end of September 2020 which is an increase of 9.4%. The median value of a house in Chelmer rose from $1.1 million to $1.2 million over the same period. Meanwhile, the median house price in New Farm lifted from $1.525 million to $1.715 million in just the five months since September 2020.
It’s worth noting that prestige property has been performing strongly in other parts of Australia too – often decoupling from other parts of the real estate market. One of the main reasons for this is that the prestige market can be less affected by economic downturns. That’s because sellers are often in a financial position where they can afford to hold off until the right offer comes in.
As we speak to buyers and sellers, we’ve observed 5 key trends driving the prestige market Brisbane now.
1. Locals are upgrading
At the same time, we’re seeing a lot of locals looking to take advantage of current conditions to upgrade.
Even though we’re in the midst of a coronavirus-induced recession, the economic fallout hasn’t hit everyone evenly. There is a large part of the market have been relatively unaffected to date.
For those with stable employment, today’s low interest rates make it cheaper than ever to take a step up the property ladder. These buyers can often afford to be bullish given the RBA has said it intends to keep interest rates at record lows for some time.
2. Interstate buyers are looking north
As one of Australia’s premier lifestyle destinations, Brisbane has always attracted interstate buyers looking for a better life. Many of these buyers are heading towards the end of a successful career, the kids have left home and they’re looking for the best place to enjoy their retirement.
Even with border closures, these mature interstate buyers represent one of the main demographics in today’s prestige market. Most are discerning and prefer to be close to, or even on, the water. After all, that’s exactly what they’ve moved to our part of the world for.
Technology such as virtual tours, FaceTime and live video walkthroughs has allowed us to engage with these buyers despite any travel restrictions.
24 Glen Rd – Toowong SOLD for $7.3 Million at Auction nearly $1 Million over reserve price
3. Telecommuting professionals have become a market force
The COVID-19 pandemic has forced many to change their work patterns and more people are working remotely, especially in fields such as professional services. As a result, they no longer need to be within a short commute to their workplace. Their jobs have become geographically independent.
Brisbane has been a real beneficiary of this trend and we’re fielding a lot of enquiries from people currently working in major cities, especially Sydney and Melbourne, who want to relocate here with their families to enjoy a different lifestyle.
Often these buyers are quite senior in their roles or run their own businesses, so they have a reasonable budget. However, they recognise that Brisbane offers far better value than comparable suburbs in the southern capital cities. For instance, the median price in Mosman is $4.35 million compared to $1.4 million in Ascot.
4. Expats are again a factor in the market
Brisbane generally doesn’t attract the same number of overseas buyers as the Sydney or Melbourne property markets. However, one group of overseas buyers we do see – and are now seeing in increasing numbers – is expat buyers.
These buyers are professionals usually based in a global financial centre such as New York, London, Singapore or Hong Kong and they’re looking for somewhere to live when they return home.
Given Queensland has escaped the worst of the pandemic, many are eyeing a return home sooner rather than later.
5. Stock levels remain very low
Real estate prices are ultimately set by the law of supply and demand and low stock levels are having a real impact on the supply side.
This is not necessarily COVID-specific but has been a feature of our property market for the past few years. SQM data reveals there were a total of 26,643 listings in Brisbane over December 2020 and 32,678 in December 2019.
That means there are now almost 20% fewer properties listed for sale.
This lack of supply has been underpinning pricing and, if current market conditions prevail, could put upward pressure on home values.
The Brisbane Prestige real estate market has held up well, even in the face of the current pandemic. We expect as the economy emerges from the recession and Australia begins to open up, prestige property here in Brisbane will become more desirable still.
If you’re interested in buying or selling in Brisbane’s prestige property market, contact me today Jason Adcock 0418727788