Over the past quarter the inner Brisbane property market has seen increasing interest and fierce competition in home buying. Rental vacancy rates have dropped dramatically at the same time. This has meant that houses are moving quickly and at a higher price. Days on the market have dropped across a number of suburbs, there’s been an increase in auction campaigns and many homes are selling under multiple offers and at higher than expected prices. And that’s meant a shortage of houses available for purchase.
The most common question I have had over the past months is what is causing this shortage. Because I am on the ground day in and day out, fielding enquiries from buyers, visiting homes and speaking with sellers, I’ve been able to get some insight. So, here’s what’s causing high demand and low stock in the Brisbane property market in 2021.
What’s causing high demand and low stock in the Brisbane property market in 2021?
People are moving in, and not moving out.
According to statistics, more people are arriving in Brisbane than normal, and less people are leaving. One study shows that people looking to move to Brisbane from Melbourne increased by 37% since July 2020, from Sydney increased by 21% and from Adelaide by 55%.
At the same time, current residents of Brisbane are digging in, happy to be here in this amazing city. The net effect of these two numbers is driving a home shortage across the city.
Move-ins are connected to Brisbane.
While the data above gives some indication of where these new residents are coming from, it doesn’t necessarily show why they are choosing Brisbane. But in my conversations with relocators I’ve found that they usually have some connection to the Sunshine state capital.
Some have gone to school here and since moved away for job opportunities and now want to return. Others have family based in Brisbane that they want to be closer to. Either way, in many cases it seems a move to Brisbane was potentially on the cards in the next few years anyway. COVID just brought the decision to move to a head.
Flexible working arrangements are becoming more common.
Another factor is that as flexible working arrangements become more common, working near head offices is becoming less important. Historically, many companies base their head offices in Sydney and Melbourne and may only have a regional office presence in Brisbane. That meant that many workers would need to remain in Sydney or Melbourne in order to be near enough to the head office.
With working flexibly now more widely accepted people are finding it easier to move and maintain their current employment situation. Brisbane is one of the most affordable of the capital cities, in both housing and education, so families in particular see it is as a tremendous benefit.
‘Historical’ move-outs are realising the benefits of the Brisbane lifestyle.
Historically, Brisbane citizens have sometimes felt they had less opportunity for career advancement in this city. Instead, these people have often looked to move both interstate and overseas for career progression. Families were willing to move for higher paying roles and additional experience and were also willing to pay higher property and education prices to get those roles and experience.
2020 changed that. In 2020 Brisbane suffered less from impacts due to lockdowns. And, in comparison to some of the other capital cities, our day-to-day lifestyle remained relatively unchanged. People started to realise that their lifestyle here in Queensland was one they weren’t willing to trade.
Though we have some media data above, the ABS statistics have only been released to 30 June 2020 (at the time of publication). Therefore, those statistics don’t reflect a current updated number that is useful to give us insight on the future of the property market. However, the September quarter end data will likely be released in early February 2021. I look forward to seeing what the net number is as I believe we’re only experiencing the tip of the iceberg.
Stay tuned for updates.
As additional data is released, I’ll provide an update to re-evaluate my predictions and consider what might happen in the future. In the meantime, the reality is that demand for both rentals and purchasing homes in the suburbs of Brisbane is at an all-time high. And we’re likely to see that lasting throughout the next quarter and beyond.
If you have a question about property purchasing in inner Brisbane, get in touch. I’d be happy to have a chat!