The Queensland capital’s lifestyle, relative value against southern counterparts and swift recovery from lockdown emerged as the key factors underpinning its growth.
The report found that Brisbane’s prime property price growth increased 2.5 per cent over the year to June, and up 0.3 per cent over the past quarter.
Prime or luxury residential property is defined as the most expensive property in a given location, generally seen as the top 5 per cent of each market by value.
No doubt our climate and safe environment have had a lot to do with this. Recently we have been seeing many reports of record prices being paid for top end property.
The Domain Buyer Demand Indicator has revealed both houses and apartments in the outer suburbs of Brisbane were the highest demanded properties for the month up to 6 September.
The research showed consumers are starting to adapt to the new norm, with working from home making living near the office less crucial in capital regions.
“The current health crisis has changed the way we use our homes, and for some altered our purchasing decisions and property wish lists,” said Domain senior research analyst Dr Nicola Powell.
Not only is buying activity in the CBD changing, so is the rental market, with consumers also looking at regional and outer suburb areas.
According to data released by SQM research, while some capital CBD markets are recording double-digit rental vacancy rates, renters hunting in regional areas are facing slim pickings.
This is leading to outer suburbs and regional areas having a spike in growth.
The onset of Covid-19 may be creating a two-speed rental market, with inner-city rents declining faster than those in the outer suburbs.
Corelogic data confirms that there is a positive correlation between changes in rent values and distance to the CBD.
This means that the closer a region is to the CBD, the more likely it is that rent values have fallen.
Rent values were analysed across statistical area regions of Brisbane, Sydney and Melbourne—for each region, the median property distance to the CBD was compared with the change in total rental market values from the end of March (which marked national, stage 2 restrictions) to the end of August.
For regions where the typical property is less than 10km from the CBD, the average decline in house rents was 2.3 per cent, and 3.6 per cent across units.
For rental markets 10km or further from the CBD, house rents had actually increased 0.1 per cent, while unit values declined a relatively mild 0.4 per cent.
Why have inner city markets been more affected?
As has been noted in previous research from Corelogic, there are several distinct factors of the Covid-19 downturn that have made inner city rental markets particularly susceptible to a decline in rental values.
These include the relatively high exposure to overseas migration as a source of housing demand.
Where have rents increased?
Of the 125 rental markets analysed, there were 63 regions where house rents increased, and 35 regions where unit rents increased, since the end of March to August.
Rental increases were most common across Sydney and Brisbane, where employment has been less affected by the pandemic, and social distancing measures have eased.
The reason for rental value increases in outer-suburban areas are less clear.
One explanation may be that outer-city suburbs have been less exposed to the factors driving declines in demand, such as overseas migration.
Anecdotal reports assert that a draw card for outer-city suburbs are relatively cheap rents, and low density along with remote working lessening the hurdle of travel times from areas located further form the largest employment nodes.
This may have increased rental prices through higher demand.
The analysed data set also revealed that rental value increases have occurred in cheaper rental markets.
It may also be the case that added stimulus to low income households have added to rental demand in areas where rents are usually cheaper.
The tapering of this fiscal support may lead to a more broad-based decline in rents over the next six months.