For the first time in 25 months, Brisbane’s home prices have seen a decline, raising new questions about the future of the city’s housing market. According to the latest PropTrack Home Price Index, Brisbane’s median home price dropped by 0.04% in December 2024, following nearly two years of consistent price growth.
A Small Dip After Over Two Years of Growth
The December price drop was modest—house values fell by 0.02%, while unit prices saw a sharper decrease of 0.12%. However, while this signals a slowdown, the drop is unlikely to provide significant relief for homebuyers, as the housing affordability crisis persists.
Regional Growth Outpaces Brisbane
While the city saw a small dip, regional Queensland continues to surge ahead. The combined regions in Queensland experienced a 0.05% rise in home prices, with houses rising by 0.17%. In contrast, unit values in these regions fell by 0.38%.
Impact of High Interest Rates and Cost of Living
According to REA Group senior economist Anne Flaherty, the cooling of Brisbane’s market is likely a result of several factors. High interest rates (maintained at 4.35% for over a year) and persistent living costs have stretched many buyers’ budgets, leading to a decrease in purchasing power. Flaherty emphasized that while December is often a quieter month for the property market, the slight price fall could signal a slower rate of price growth moving into 2025.
Units Outperforming Houses in Brisbane
In a surprising trend, unit prices in Brisbane have outpaced houses in 2024. Over the past year, unit prices increased by 15.36%, while house prices rose by 10.63%. The surge in unit values suggests that more buyers are being priced out of the housing market and turning to more affordable units.
This shift is atypical, as houses usually see better price growth compared to units in most major cities, but Brisbane has bucked this trend.
Wealthier Areas vs. More Affordable Suburbs
Flaherty noted that the price drop in December was primarily driven by Brisbane’s wealthier areas, while the more affordable suburbs remain competitive, continuing to attract strong demand. More affordable areas in regional Queensland—including Townsville, Central Queensland, and Mackay-Isaac-Whitsunday—have seen exceptional price growth.
Strong Growth in Queensland’s Regional Areas
The top performers in Queensland’s housing market in 2024 include:
- Townsville: Up 26.25% to a median value of $499,000
- Central Queensland: Up 22.86% to $493,000
- Mackay-Isaac-Whitsunday: Up 15.97% to $516,000
- Ipswich: Up 15.62% to $718,000
- Darling Downs-Maranoa: Up 13.12% to $456,000
In contrast, Brisbane saw a rise of 11.35% to a median home price of $863,000. Cairns also outperformed the Gold Coast and Sunshine Coast, with home values rising 10.05% to $565,000.
Driving Forces Behind Queensland’s Growth
Flaherty explained that the population growth in Queensland has coincided with slower housing construction. This mismatch between growing demand and limited supply has been a key driver behind the price increases seen in regional areas, particularly in Townsville and Central Queensland.
Conclusion
While Brisbane’s home prices have seen a small dip, the overall housing market in Queensland, particularly in its regional areas, remains strong. The housing market in Brisbane is expected to continue adjusting to economic pressures, including interest rates and the cost of living, but with regional areas seeing significant growth, the broader Queensland property market shows no signs of slowing down.
With home values in Brisbane now more competitive compared to cities like Melbourne and Sydney, the market remains challenging for many buyers, especially as affordable options become increasingly scarce in the city’s high-demand areas.
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