Brisbane property prices rising faster than expected in 2024
Brisbane property prices are rising faster than expected, prompting experts to revise 2024 forecasts, but there’s some relief ahead for buyers struggling to keep pace.
Brisbane property prices are rising faster than expected, prompting experts to revise 2024 forecasts, but there’s some relief ahead for buyers struggling to keep pace.
The PropTrack Property Market Outlook Report, released Thursday (June 27) and published twice a year, lifted Brisbane’s 2024 annual growth expectations by one percentage point off strong demand and “exceptionally tight” housing supply so far this year.
MORE: Historic Brisbane home where walls disappear
Surprisingly cheap rent for music star’s beach house
‘Reduce overseas investors’: New housing backlash against migration
PropTrack economic research director Cameron Kusher said “we’re now seeing that prices are likely to rise by the end of this year by 4 to 7 per cent”. The earlier prediction was for a 3 to 6 per cent annual rise.
Mr Kusher said there was no doubt the pace of price growth in Brisbane was slowing, given it logged a 12.2pc increase between July 2023 and May 2024.
“One of the big drivers of really strong price growth over the last couple of years has been that there hasn’t been much stock coming to the market and very little stock sitting on the market. We do expect that the number of properties coming to the market will lift and that will take some of that fear of missing out (FOMO) out of it and lead to slower price growth.”
“Brisbane prices are higher than Melbourne prices and we’ve had these sustained gains in property prices for several years now,” he said. “Prices will continue to rise. They’re just going to be slower paced.”
Mr Kusher said the growth seen over the last five years was not sustainable.
“I think it’s reasonable to expect we’re going to see slower price growth over the coming years.”
Mr Kusher said housing affordability was a big challenge now for Brisbane and South East Queensland with borrowing capacity quite stretched.
“You’ve got a finite number of people that can continue to bid up prices in the market when borrowing capacities are falling so much,” he said. “The rental returns are not looking as attractive as they have been.”
He said “interest rates are the highest they’ve been in 12 years. They are low on a historic basis, but when you consider the amount of debt that households have and how expensive property prices are, a 4.35 per cent cash rate today is probably like a 10 to 12 per cent cash rate at the start of the 90s.”
SEE THE LATEST PROPTRACK HOME PRICE INDEX
He warned the Reserve Bank would not take housing affordability into consideration in its battle with inflation.
“Unfortunately the RBA only has that tool (cash rate rises) and what they’re trying to do is get inflation back into that 2 to 3 per cent range.”
The latest Australian Bureau of Statistics data released Wednesday showed inflation rose to 4 per cent in May.
“Interest rates are going to stay higher for longer,” Mr Kusher said. “We’ll probably see more mortgage stress, more people fall into mortgage arrears and that might weigh on people’s buying intentions.”
Originally published as Brisbane property prices rising faster than expected in 2024