Brisbane house prices: will they keep growing in 2024? This article tackles the question head-on, exploring the various factors – from demographic changes to interest rates – that could drive or dampen Brisbane’s housing market dynamics.
Without diving too deep into speculation, we provide a concise preview of the probable trends as Brisbane steps into another year of economic challenges and opportunities.
Brisbane’s Property Market Overview
The Brisbane property market has experienced substantial growth over the past decade, with an average annual increase of 5.2% in Brisbane property prices. A surge in population, particularly in the middle ring suburbs, has largely fueled this growth.
It has resulted in a significant rise in property development and construction, thereby increasing the demand for housing.
The market’s recovery is notably driven by supply and demand dynamics, as well as affordability. Although property prices are on the rise, the Brisbane housing market remains attractive due to its unique combination of growth and affordability.
This perfect storm of factors has led to the escalation of property prices, a trend that may continue into 2024.
Population Growth and Its Impact on Housing Demand
The positive correlation between population growth and housing demand makes it a crucial consideration for property investors.
Interstate migration has played a significant role in Brisbane’s population growth, adding tens of thousands of individuals to Queensland’s population change over recent years.
This influx of people, coupled with the city’s attractive lifestyle and affordability, has led to a higher demand for housing, consequently causing property prices to rise.
It’s a cycle that perpetuates itself – more people move to Brisbane in search of a better lifestyle, pushing up the demand for housing and, in turn, driving property prices up.
Price Growth and Affordability
In the past decade, Brisbane’s house prices have seen an average annual rise of 5.2%.
“This growth trend is expected to continue into 2024, with the average house price forecasted to rise by 13.9% and a projected growth rate of 4% in 2024 and 3% in the subsequent years.”
Even with escalating prices, the real estate in Brisbane market keeps an attractive level of affordability for buyers. The average house price in Brisbane is significantly lower than that in other major Australian cities like Sydney and Melbourne.
This relative affordability, combined with the city’s attractive lifestyle and growing population, makes Brisbane a compelling choice for property buyers and investors.
Factors Influencing Brisbane House Prices in 2024
Looking towards 2024, multiple key factors are likely to steer Brisbane house prices. The anticipated interest rate for Brisbane in 2024 is expected to remain relatively stable, potentially bolstering ongoing demand for housing and contributing to stable or rising property prices.
However, rising interest rates may diminish purchasing power and property demand, potentially leading to a decline in property prices.
On the other hand, the limited supply of housing in Brisbane, amid growing demand, has increased property prices, as the existing supply is inadequate to meet the demand for residential dwellings.
This increasing gap between supply and demand is expected to significantly impact Brisbane’s property prices in 2024.
Rising Interest Rates and Their Effect on Property Prices
The property market is significantly impacted by interest rates. As interest rates rise, the buying capacity of prospective purchasers can decrease, resulting in a decline in property demand.
“Historical changes in the official cash rate have shown that interest rate cuts generally stimulate property price growth, while interest rate rises typically slow price growth or lead to price declines.”
However, the Brisbane market has displayed resilience in the face of interest rate changes. Even in the context of rising interest rates, the market has bounced back from downturns and achieved record high prices.
While future rises in interest rates may potentially dampen the housing market, the robust demand for property in Brisbane could counterbalance this effect.
Buyer Demand and Market Trends
A surge in buyer demand in Brisbane’s property market in recent years has led to a rise in house prices and a scarcity of affordable housing. Interestingly, Brisbane buyers tend to favor houses over apartments due to the better capital gain potential of houses.
This preference, along with the robust demand for houses, has resulted in a 12-month growth of 9.7% for unit prices, indicating a growing interest in the apartment sector as well.
This strong demand and the market’s preference for houses over apartments and inner/middle-ring suburbs over outer suburbs are driving property prices in Brisbane.
As the demand for housing continues to outstrip supply, we can expect property prices to remain robust in 2024.
Housing Supply and Its Impact on Property Prices
The escalation of property prices in Brisbane can be significantly attributed to:
- Limited housing supply
- Lack of innovative solutions, such as modular housing and community land trusts
- Inability of housing supply to keep pace with demand
Specific areas of Brisbane that are particularly affected by this housing shortage include:
- Scenic Rim
- Bowen Hills
- Sunnybank Hills
This shortage of housing supply has resulted in a rental crisis in Brisbane, further exacerbating the upward pressure on property prices.
Brisbane’s Rental Market and Its Influence on House Prices
Another key driver of property prices is the rental market in Brisbane. The city’s rental market is experiencing a significant increase in demand, with rents for new tenancies in Brisbane surpassing a 17% increase over the past 12 months.
This increase in demand, coupled with a constrained rental market, has led to a surge in Brisbane house prices.
In Brisbane, rental demand can considerably impact house prices, as high rental demand is often associated with price growth.
Furthermore, there is a correlation between the affordability of properties in certain suburbs and the rental yield they generate, leading to potentially lucrative investment prospects.
Tight Rental Market and Its Effects on Property Values
Another factor contributing to the rise in property values is Brisbane’s tight rental market. Some reasons for this are:
- Low vacancy rates have the potential to drive up rents as a result of high demand
- Rental properties become more appealing to investors
- This leads to an uptick in property values.
Historically, Brisbane has experienced low vacancy rates and rising median rents, resulting in a significant increase in house prices. The increasing abundance and appeal of the suburb have resulted in a high demand for properties in the area, leading to an escalation of property values.
Rental Properties as Investment Opportunities
Investing in Brisbane’s rental properties offers opportunities for:
- Capital growth
- Attractive rental income yields
- Steady cash flow
- A persistent high demand for rental properties with scant vacancy rates
Rental yield is a clear measure of investment performance and can be calculated by dividing the annual rental income by the property value and multiplying by 100 to get the rental yield percentage.
Strong rental yields in the Brisbane property market are primarily influenced by:
- Increasing demand for rental properties, driven by the city’s robust population growth
- Strategic positioning of the investment property
- Stage of market cycles
- Low vacancy rates
- Substantial rental demand
Promising Suburbs for Property Investment in Brisbane
Certain suburbs in Brisbane are emerging as particularly promising for property investment. The following factors have all contributed to high capital growth in these suburbs.
- the city’s strong economy
- sustained growth in property values
- robust migration
- tight rental markets
- a shortage of housing
- affordable property prices
- attractive lifestyle
- significant population growth
- increased internal migration to the city
Suburbs such as Gumdale, Ellen Grove, New Farm, Norman Park, Indooroopilly, Camp Hill, East Brisbane, Graceville, Manly, and Taringa have exhibited high capital growth in recent years within the Brisbane area.
Meanwhile, the appeal of a suburb for property investment in Brisbane is often influenced by factors such as proximity to schools, parks, cost of living, closeness to family, coffee shops, and a thriving nightlife.
Affordable Property Options
Suburbs like Keperra and Chermside West offer growth potential and are suitable for investors seeking affordable property options.
In Keperra, the median property prices for houses are $825,000 and for units are $626,000. In Chermside West, the median prices are $875,000 for houses and $652,000 for units.
Despite a recent decline in median sale prices, Keperra is showing signs of potential for future appreciation. Similarly, Chermside West has experienced a significant 29% rise in the median house price in the past five years, indicating robust growth in property value.
The relative affordability of these suburbs, combined with their growth potential, makes them appealing options for property investment.
High Capital Growth Suburbs
Annerley and Woolloongabba are prime examples of Brisbane suburbs with high capital growth. Significant infrastructure developments and attractive features such as period-style homes and proximity to essential amenities have boosted their attractiveness for property investment.
Over the past year, there has been significant growth in median property prices in Annerley and Woolloongabba, with houses ranging from $1,203,500 to units at $565,500. With an average growth of approximately 30% over the previous five years, these suburbs hold considerable potential for further price escalations in the next five years.
Suburbs with Desirable Local Amenities
Buyers are increasingly gravitating towards suburbs with desirable local amenities. Ashgrove is one such suburb, where development includes:
- Tree-lined streets
- Numerous amenities and park areas
The proximity and quality of neighborhood amenities play a significant role in influencing property values in Brisbane. Factors such as the accessibility of schools, transportation options, and attractions are key elements that affect the desirability of properties and, consequently, their prices.
The increasing abundance and appeal of these suburbs have resulted in a high demand for properties in the area.
3 Strategies for Investing in Brisbane’s Property Market
A strategic approach is required when investing in Brisbane’s property market. Key strategies include timing the market, diversifying the property portfolio, and conducting thorough research and due diligence. Each of these strategies plays a crucial role in making well-informed investment decisions and maximizing returns.
While timing the market can significantly influence property investment returns, it’s a risky approach due to the potential for missed opportunities and potential earnings.
On the other hand, diversifying a property portfolio reduces an investor’s vulnerability to risk and enhances the potential for capital appreciation.
Furthermore, conducting comprehensive research and due diligence is essential in evaluating property potential and understanding local trends and forecasts.
1. Time the Market – Capitalise During the Growth Spurts
In Brisbane, timing the market can greatly affect property investment returns. By strategically capitalizing on the periodic property growth spurts that occur every few years, investors have the potential to double their investment returns.
Certain times of the year may offer more favorable property prices in Brisbane. From March to May, the market experiences an increase in listings and buyers tend to withdraw from the market in June, leading to a buyers market.
Furthermore, the period before or just after winter can present opportunities for more favorable negotiations as homeowners are less inclined to sell their properties.
2. Diversify Your Property Portfolio – Houses, Units etc.
Diversification of a property portfolio is crucial in reducing an investor’s risk exposure and enhancing the likelihood of capital appreciation. A diversified property portfolio in Brisbane should encompass a range of residential properties, including:
across multiple suburbs.
By diversifying across suburbs and property types, investors can:
- Spread their risk
- Take advantage of different market conditions
- Benefit from various wealth opportunities
- Facilitate the attainment of long-term financial objectives.
3. Conduct Thorough Research and Due Diligence
To make well-informed investment decisions, it’s crucial to conduct comprehensive research and due diligence.
By thoroughly examining the market, evaluating property potential, and understanding local trends and forecasts, an investor can mitigate risks and enhance the likelihood of a successful investment outcome in Brisbane’s property market
- Carefully inspect the property and the neighborhood
- Research the title and ownership of the property
- Obtain a professional inspection to check for any structural damage or potential problems
- Understand the zoning regulations outlined in the Brisbane City Plan 2014 to make informed investment choices
Brisbane’s property market presents a wealth of opportunities for both home buyers and investors. The market’s ongoing growth, fueled by factors such as population growth, affordability, strong buyer demand, and limited housing supply, suggests that property prices are likely to continue their upward trajectory into 2024.
By strategically timing the market, diversifying their property portfolio, and conducting thorough research and due diligence, investors can mitigate risks and maximize returns. As Brisbane’s property market continues to evolve, keeping abreast of the latest trends and forecasts can help investors make informed decisions and capitalize on the opportunities that this vibrant market presents.
As we explore the dynamics of the Brisbane property market and its expected trends into 2024, it’s also valuable to consider how similar forces are impacting other Australian cities.
For instance, the Newcastle property market offers a contrasting yet complementary perspective on how regional markets are evolving in response to similar demographic shifts, interest rate changes, and supply-demand imbalances.
Understanding these parallel trends can provide property investors and buyers with a broader view of the real estate landscape across the nation.
Suggested reading: Before you go further, get a comprehensive understanding of the property market cycles in our top-tier hub article. It’s a must-read for all enthusiasts!
Frequently Asked Questions
What is the property forecast for Brisbane in 2024?
The property forecast for Brisbane in 2024 indicates a continued upward trend due to favorable market conditions and increasing demand, especially in inner and middle-ring suburbs.
Which Brisbane suburbs will boom in 2024?
In 2024, inner and middle-ring suburbs in Brisbane such as New Farm, Paddington, and Ascot are expected to experience substantial price growth, according to property market forecasts.
What will property prices be in 2025 Brisbane?
Property prices in Brisbane are expected to remain steady, with unit values rising 3.1% by June 2025 and the median house price forecasted to be around $810,000 by the same time.
What factors are driving the growth of Brisbane’s property market?
The growth of Brisbane’s property market is driven by affordability, population growth, strong buyer demand, and limited housing supply, making it an attractive investment opportunity.
How are rising interest rates likely to impact Brisbane’s property market in 2024?
Rising interest rates may reduce purchasing power and property demand in Brisbane, but the city’s robust property demand may counterbalance these effects.
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