Brisbane residential market kicking off

The Brisbane residential property market is strengthening – especially in the sub-$1 million price bracket, according to a leading agent.  

More than $80 million worth of residential property was sold in transactions negotiated by just two of Place real estate’s offices – in the city’s east and inner north – in October, making it a record month for sales.  

And, while the ‘heat’ is in the sub-$1 million price bracket in the Brisbane residential market, the top end is experiencing its best conditions in more than three years.  

Damien Hackett, Place CEO, said this showed the city’s residential property market was ‘’firmly on the way up’’, and that the data demonstrated that the sub-$1 million price bracket was where most of activity was taking place.  

“Greater than 80% of the 97 properties sold (were) in this category, which demonstrates it is undoubtedly leading the recovery in Brisbane’s residential market,” he said.  

“Fifty-two per cent of homes sold by Place across these two offices during the month of October were priced between $600,000 and $1 million, while a further 28% were under $600,000.  

“With only 17% of the houses priced over $1 million, it is evident buyers are most active in the more affordable price brackets - which makes sense.  

“These buyers are increasingly confident in the economy and their economic circumstances – their employment is relatively secure and their salaries are stable, and this, combined with record low interest rates, is propelling them into the market.”  

In addition to the strong sales figures recorded by Place in the inner east and inner north, the real estate agency has also found that time on the market for listed properties has significantly reduced, and their auction clearance rate has also increased.  

“The number of days homes in the sub-$1 million price bracket were sitting on the market in October was 41 - far less than the average for the six-month period from January to June, which was 68,” Hackett said.  

“Meanwhile, the clearance rate for auctions between the beginning of October and now is 81%, which is very high.  

“Essentially, the strength in the market that we are witnessing in Brisbane is contrary to recent reports that suggest the recovery is only taking place in Sydney. The Brisbane market is exceptionally strong, and we expect to see it only improve from hereon in, with all the fundamentals lined up for a solid 2014.”  

Hackett said the Brisbane market was benefitting from pent up buyer demand that has been building since the city’s floods in 2011.  

“Buyers were extremely cautious after that, and sellers were also reluctant to put their properties up for sale, fearing they would be sold under value, so, across the board, activity was subdued,” he said.  

“That period of uncertainty is now behind us. We have been seeing a gradual improvement in the market since it bottomed in 2011, but now it is clear that it has well and truly turned a corner.  

“In line with the rise in activity in the sub-$1 million sector, we are actually seeing values begin to rise again, which is extremely positive.”  

Recent sales in the sub-$1 million price bracket reflecting the recovery in the market include:

• A 3-bedroom, 2-bathroom house in Cannon Hill – The comparable sales for this property were between $470,000 and $499,000 and it sold within the first four days of being on the market for $550,000.

• A 2-bathroom, 1-bedroom cottage in Petrie Terrace – Two years ago it failed to sell for $540,000 yet recently it sold for $590,000 within the first week of being listed.

• A 3-bedroom, 1-bathroom house in East Brisbane – This property was bought for $620,000 last year and, after some minor improvements, it sold for $730,000 this year in a very short time frame.

Hackett said that while the ‘heat’ was in the sub-$1 million price bracket in the Brisbane residential market, the top end was currently experiencing its best conditions in more than three years.  

“There is activity in the $1 million-plus price bracket and stock is turning over – we have seen a number of sales even in the $4 million-$6 million dollar range,” he said.  

“But, despite the rise in activity in this sector, so far we have seen limited growth in values for top-end properties. The market is starting to move in this regard, but greater price growth will come in time when the global economy – including in Australia and elsewhere - is more stable.”