Million-dollar line in sight as Brisbane house prices hit record

Brisbane’s median house price has notched another record high, climbing 1.5 per cent in three months to mark a seventh straight quarterly rise.

The Queensland capital’s median hit $994,945 in the September quarter, the latest Domain House Price Report, released on Tuesday, shows. If it sustains that pace, it could hit the million-dollar mark within weeks.

Brisbane house prices are at a record high.Credit: iStock

Brisbane’s unit market has also overtaken Melbourne to make it Australia’s second most expensive capital to buy a unit, a milestone it hasn’t reached in 25 years.

The unit median surged by nearly $20,000, or 3.3 per cent, to $610,321 in three months, marking the strongest quarterly gain recorded in the nation’s capitals.

The latest hike follows an unprecedented growth streak in Brisbane’s unit market, which property experts say is a coming-of-age moment for the sector.

Domain chief of research and economics Dr Nicola Powell said that while price growth in the Queensland capital had cooled over the past year, the 3.3 per cent unit price gain spoke volumes about buyer capacity and the pressures facing the building sector.

“The gap between unit and house prices has narrowed to a three-year low,” she said.

“Affordability has been steering buyers towards units. But the building sector is still facing headwinds, and the supply pipeline looks very contained. We are 28 per cent below the five-year average for supply.”

Powell said a predicted interest rate cut would fuel demand for the entire market.

“House prices rose about one-third slower than the previous quarter, but they are absolutely still on track to hit $1 million by the end of the year,” she said.

Among several hotspots, house prices in Brisbane’s west jumped most, up 5.3 per cent in three months to a median of $1.3 million. The biggest gains in the unit market were in the Logan-Beaudesert region (up 8.2 per cent) and Brisbane’s west (up 6.9 per cent).

At the suburb level, houses in Manly were the year’s star performer. Prices there skyrocketed by 42 per cent to $1,597,500.

Ray White Collective CEO Haesley Cush said interstate investors and high build costs were key drivers behind Brisbane’s booming unit market.

“Melbourne should be more expensive than Brisbane,” he said. “Brisbane is an excellent story for all the obvious reasons that surround the [2032 Olympic] Games and infrastructure. But also, right now, people in Melbourne are scared about the additional taxes there.

“Developers aren’t building one- and two-bedroom units here any more and it seems to be because they can’t be confident they will make money in high rise apartments.”

Cush cited last Thursday night’s unit auction, an event where 37 registered parties vied for five homes. One local upsizer splashed $1,215,000 on a two-bedroom apartment at 2/22 Arthur St, Fortitude Valley, more than $200,000 above reserve.

Cush anticipates once-dormant suburbs such as Bowen Hills, Fortitude Valley and Spring Hill could have the sharpest unit price growth next. In the housing sector, he predicts the city will reach the $1 million median mark in the next eight weeks.

Courtney Caulfield, from Place Estate Agents, said the arrival of long-awaited infrastructure in the inner city, such as the Queens Wharf, had reignited appetite for high-end apartment living.

“Last quarter we also settled a penthouse in Alice Street in Brisbane City for $8,030,000 and the vendors paid $5 million for it in 2019,” she said.

“We also sold one in Thornton Street at Kangaroo Point for $9 million off the plan and the buyers were downsizers.”

Caulfield said a dearth of development approvals was placing the city in a precarious position that would only drive prices north over the next two years.

“We are even seeing one-bedroom apartments getting over $1 million in the inner city now. It’s often locals buying, recognising the value and paying the premium,” she said.

Arthur Conias principal Jeff Pickering said the Enoggera and Ashgrove region in the city’s west had shown astronomical growth.

In the unit sector, he said, first home buyer appetite was driving demand. In houses, appetite for postwar homes was strong.

“We have turned over more units in the last six months than I’ve turned over in my entire time in real estate,” said Pickering. “And in the suburbs that I work in, there are no new sites going up and the new ones that are getting built are so expensive.

“Somehow, we have to start building more.”

In Ashgrove, Pickering said this year alone price gains could be witnessed month on month.

“I sold a two-bedroom unit at 3/7 Ashgrove Ave, in July for $811,250. We were marketing it at offers over $650,000,” he said.

“In April, an identical unit with the same floor plan at 18/7 Ashgrove Ave sold for $617,000.”