Is This the Inflection Point in Brisbane Real Estate?

Is This the Inflection Point in Brisbane Real Estate?


In recent times, Brisbane’s real estate market has experienced a rollercoaster ride, with fluctuating prices and changing dynamics. However, current indicators suggest that we may be at a pivotal moment in the Brisbane real estate landscape. Several factors contribute to this potential inflection point, including stock levels, immigration trends, and the impact of the COVID-19 pandemic on the construction industry. Let’s delve into these factors and explore the possible implications for the future of Brisbane’s real estate market.

Stock Levels: A True Correction in the Market

Over the past week, we have witnessed a 0.5% increase in property prices in Brisbane. Similarly, prices have risen by 0.5% over the last month. However, it’s important to note that there has been a significant drop of -9.2% in property prices over the past 12 months. This decline can be seen as a true correction in the market, reflecting a more realistic valuation of properties.

What is interesting to observe is that buyer confidence seems to be returning quicker than seller confidence. As a result, the amount of available stock as a percentage of total dwellings has fallen from around 3.5% to 2%. This decrease in stock levels could potentially lead to a more competitive market, benefiting sellers in the long run. With fewer properties available, buyers may have to compete for the limited options, driving up prices and creating a seller’s market.

Immigration Trends: Driving Demand for Housing

Another crucial factor that may contribute to the inflection point in Brisbane real estate is immigration. Australia is currently facing a massive skill shortage in its labour market, prompting the government to allow net migration to surge. The Australian recently published a story stating that net-overseas migration is projected to reach 650,000 over the two financial years, 2022-23 and 2023-24. This figure is more than double what was observed in 2021-22, which stood at 303,670.

Such a significant increase in migration can have a profound impact on the demand for housing in Brisbane. The influx of newcomers seeking accommodation will likely drive up housing prices and stimulate the real estate market. As more people migrate to Brisbane, the need for housing will increase, leading to a potential surge in property prices. This demand-supply imbalance may further contribute to the inflection point in the real estate market.

The Impact of the COVID-19 Pandemic on the Construction Industry

However, it is essential to acknowledge the challenges faced by the construction industry, which could influence the trajectory of Brisbane’s real estate market. The COVID-19 pandemic has taken a toll on construction activity, resulting in delays, labour shortages, and supply chain disruptions. These factors have hindered the industry’s ability to meet the growing demand for housing, potentially limiting the gains in the market.

The pandemic-induced restrictions and safety measures have slowed down construction projects, leading to delays in completing housing units. Moreover, labour shortages have made it difficult for developers to keep up with the demand. Supply chain disruptions, including shortages of building materials and increased costs, have further exacerbated the situation. These challenges have had a dampening effect on the construction industry’s ability to supply enough housing to meet the increasing demand.

The Future of Brisbane’s Real Estate Market

In conclusion, Brisbane’s real estate market appears to be at a crucial juncture. The recent correction in property prices, coupled with decreasing stock levels, indicates a potential shift in the market dynamics. The decrease in available stock and the return of buyer confidence suggest a more competitive market, benefiting sellers.

Furthermore, the surge in net migration and the resulting demand for housing present an opportunity for growth and investment in Brisbane’s real estate market.