The surging housing market in Brisbane, the capital city of Queensland, has made it the second-most expensive city to buy a house in Australia, surpassing the nation’s capital Canberra. This is a position that Brisbane hasn’t held since 1997. The reshuffling of real estate market rankings in Australia is primarily due to a lack of housing supply, rising prices, and an influx of migrants, both domestic and international, in the post-pandemic period.
According to a recent CoreLogic report released on June 3, the median house value in Brisbane now stands at $937,479, just $190 above the median in Melbourne. The unit value in Brisbane is also higher than Melbourne, sitting at $615,429 compared to $614,299. This is a significant shift since before the pandemic when Melbourne had a 37 percent premium over Brisbane’s median dwelling value.
The growth rates in Brisbane have outpaced Melbourne and the Australian Capital Territory (ACT) since the beginning of COVID-19. While Melbourne saw growth of 11.2 percent, Brisbane experienced an impressive growth rate of 59.8 percent. Similarly, Brisbane’s growth surpassed that of the ACT, where values increased by 31.8 percent since March 2020.
Experts attribute this difference in growth rates to extremely low levels of housing supply in the strongest markets. Tim Lawless, the research director at CoreLogic, explained that inventory levels in Perth and Adelaide are more than 40 percent below the five-year average for this time of year, while Brisbane listings are 34 percent below average. The low supply combined with high market demand is driving prices upward.
Eliza Owen, the research head at CoreLogic, further emphasized the disparity between population growth and housing supply. She noted that population growth happens quickly, but housing supply takes time to catch up. The inability of developers and councils to keep up with the population surge is creating a sense of urgency and pressure on prices in the Brisbane market.
The population growth in Queensland has been significant, with a jump of 2.7 percent within a year from September 2022 to September 2023, according to data from the Australian Bureau of Statistics. This growth rate is the highest on record in absolute terms. The Queensland government’s Department of Development and Infrastructure predicts that the state’s population will continue to boom, reaching between 6.4 and 8.27 million by 2046, up from the current 5.4 million.
The population growth in Queensland is expected to be driven by natural growth, interstate arrivals, and international migration. After a decline during the COVID-19 pandemic, international migration levels are set to average 27,000 people per year over the next decade in Queensland. This influx of migrants further exacerbates the demand for housing in the state.
In response to the housing crisis, Queensland Premier Steven Miles has urged the federal government to consider reducing international migration levels. He highlighted that if migration continues at current levels, there will be a need for tens of thousands more homes every year than the industry can build. The Queensland government is taking steps to address the issue by announcing the construction of up to 600 modular homes and allocating $2.8 billion in the 2024-25 budget towards a plan to build 1 million homes by 2046.
In conclusion, the lack of housing supply, increasing prices, and the influx of migrants are driving factors behind Brisbane’s rise as the second-most expensive city to buy a house in Australia. The disparity in growth rates between Brisbane and other cities can be attributed to extremely low levels of housing supply. The population growth in Queensland, fueled by both domestic and international migration, further adds to the demand for housing. The Queensland government is taking steps to address the issue by calling for reduced migration levels and investing in affordable housing initiatives.
