A growing number of regional cities and towns across NSW are in the midst of a rental crisis, as short supply and a surge in sea and tree changers leaving Sydney see rental prices soar.

New data shows that weekly rents in more than 20 regional markets have jumped by 10 per cent or more in the space of a year, with asking rents in five regions outstripping those in Greater Sydney.

The latest Domain Rent Report, released Thursday, shows rents in the Byron Bay, Ballina and Tweed council areas on the state’s north coast, Wingecarribee council area in the Southern Highlands and Kiama, have outstripped Sydney’s median rent price of $550 a week for a house.

Popular Byron Bay remains the most expensive regional market with a massive median rent of $880 – up more than $180 or 26.2 per cent year-on-year – making it pricier than most of Sydney, bar the eastern suburbs, northern beaches and north shore.

Median weekly asking rents also jumped by more than a quarter in the Snowy Monaro (28.6 per cent) and Bellingen (26.8 per cent) council areas. The Wingecarribee (20 per cent), Ballina (19.2 per cent), and the Eurobodalla (18.2 per cent) regions also recorded some of the sharpest rent hikes.

Increased demand and too little supply of both homes for sale and lease had seen rental prices soar on the Mid North Coast, said Nathan Cardow, principal of Cardow and Partners Property Bellingen.

“It’s like we’re a bicycle shop, and we have no bikes left, we’re not selling much, and we’re not renting much,” he said.

When the coronavirus pandemic hit, a lot of landlords, primarily from Sydney, moved back to the Bellingen region, Mr Cardow said, reducing the number of homes for rent. On top of that came an increase in Sydneysiders looking to rent in the region due to the rise of remote working, and in more recent months, tenants priced out of the Byron region.

“They’re a pretty decent portion of the market now; they’re looking for affordability and say it’s just got too crazy up there [in Byron],” Mr Cardow said.

The average home in the Bellingen region, which has a median of $520, is now getting between five to 10 applications, he said, with an increasing number of tenants looking to offer above the advertised rate or pay more rent upfront to try to beat the competition.

Former East Ballina resident Belinda Nelson is among those who have had to leave their community behind, moving some 40 kilometres south to the small town of Woodburn this week.

The single mother of two teenagers – who both go to school in Ballina – went to almost 70 rental properties priced between $350 and $550 over four months, starting locally and then looking to the likes of Alstonville and Lismore. She had no luck and feared she was facing homelessness until she secured a rental privately through an acquaintance for $400 per week.

“You go to the inspections, and there are 50 people there, and they are telling me if you offer more or offer to pay six months in advance, you’ll get the property,” she said, adding the one time she did try to offer more, she was outbid.

“I didn’t have a choice, I didn’t want to leave Ballina, I moved there [years ago] to take care of mum, and now we’ve been forced out in a way, and believe me, I’m not alone; some of the stories are horrific.”

Other locals reported they had rents hikes of up to $100 a week, with some landlords attempting to lift rents by hundreds of dollars between tenancies. Meanwhile, strong competition for properties had many renters spending months trying to find a place – often resorting to sub-par properties, or in some instances a motel, to get a roof over their head.

The Tenants’ Union of NSW has been inundated with calls in recent months from regional Australians facing rent hikes they can’t afford or terminations as landlords look to sell or make way for new tenants prepared to pay more.

“We keep getting calls from people being evicted in order to make way for higher rents, and then they aren’t able to find a new home that is affordable and are accepting much lower quality and losing amenity, or they have to leave town, then there is a flow-on effect to other regions,” said chief executive Leo Patterson Ross.

A lot of people are really struggling and desperate to find a home, and that’s driving up the rents even faster because there is such demand,’ he said.

“We are seeing people increasingly facing homelessness, sleeping in their cars.”

There have been spikes in evictions up and down the NSW coast, but also in regional cities like Tamworth, Armidale and New England, Mr Patterson Ross said. Adding that on top of increased demand from sea and tree changers, some markets were dealing with already limited supply due to floods and fires in recent years.

Increased demand from Sydneysiders, combined with the rise in holiday rentals, has also seen rents spike in the Snowy Mountains, putting pressure on the supply of longer-term rentals in Jindabyne and the surrounding regions for locals and seasonal workers, said Gordon Jenkinson, principal of First National Real Estate Kosciusko.

“The supply of permanent rentals has dropped, as has the number of properties for staff; this has created a lot of drama. Over the last couple of years, we’ve had huge issues with people camping along the lakefront and in people’s yards because they can’t get find get somewhere to rent,” Mr Jenkinson said.

Landlords could pick and choose their tenants, with most properties receiving at least a dozen applications, Mr Jenkinson said. Strong competition for the limited supply of rental homes – his office has an occupancy rate of 100 per cent – meant some locals were being pushed out of Jindabyne to surrounding towns, which was then having an impact on prices there.

The Australian property market has had a year unlike any other in 2021, and we certainly experienced it here in Toowoomba.

Rising home values, increasing rents and demand outstripping supply – we had it all. We look back on a year of historic growth and find out what we can expect in 2022.

2021 – the year of the regional property boom

Regional markets across the country boomed this year, thanks to record low-interest rates, an increase in remote working, relatively affordable property and a major tree change trend that saw big city dwellers fleeing ongoing lockdowns in search of more space and a laidback lifestyle. The top-performing regions, according to CoreLogic, were lifestyle areas within a reasonable commuting distance of the capital cities, like Toowoomba.

House values rose across regional Queensland, and here in Toowoomba, we saw a huge 15.5% increase. Unit prices increased too, with 18 of the 22 Queensland regions recording at least a 10% rise, while 12 regions saw values rise by more than 20% across the year.

Other measures of a hot market were also in evidence, with the average number of days property spent on the market before being sold declining across regional Queensland. Meanwhile, demand is well and truly outstripping supply, with advertised listings across regional Australia currently 37% below the five-year average, while the number of home sales is sitting about 24% above the five-year average.

The Toowoomba sales market in 2021

Here in Toowoomba, we’ve seen incredibly strong demand from buyers for all types of property, and homes are being snapped up as soon as they come onto the market. FOMO (the fear of missing out) is playing a role here. The market is so competitive that some buyers are willing to compromise on their idea of the ‘perfect’ home just in order to secure a property, while others are entering the rental market while they continue their search for the right home to buy.

First home buyers in Toowoomba

First home buyers have been out in force in Toowoomba this year, driven by a tight rental market and the desire to get a foot on the property ladder before the prices rise even more. They’ve been prompted by low-interest rates and aided by first home buyer schemes.

Data from the Real Estate Institute of Queensland (REIQ) shows that Queensland first home buyers are acquiring property at the fastest rate in 13 years, buying around 3,000 homes every month, and first home buyer loans are at their highest level since 2008.

But this trend has not been reflected around Australia. In fact, the number of first home buyers across the country decreased by 12.6% in the September quarter, according to the latest Real Estate Institute of Australia (REIA) Housing Affordability Report. This drop has been driven by worsening housing affordability issues.

The fact that we’ve seen a 50% increase in first home buyers in Queensland over the last 12 months is a sign of the relative affordability and enviable lifestyle on offer here.

Property investors in Toowoomba

Property investors have also been very active here in Toowoomba this year. We’ve seen long term investors take advantage of the rising sales market to sell long-held investment properties, and we’ve also seen strong interest from new investors. After all, Toowoomba is being touted by experts as a savvy place to invest in property, and some Toowoomba suburbs have returned exceptional results for investors this year. However, with more owner-occupier activity taking place, the investment market is feeling a bit of a squeeze. Only time will tell how this will impact the rental market.

The Toowoomba rental market in 2021

Just as the sales market has seen price increases this year, so too has the rental market. The average weekly rent for houses in Toowoomba has now hit $416, according to SQM Research, the highest level in more than a decade. Units, meanwhile, are now renting for $329 per week after reaching a multi-year high of $340 a week in November.

These price hikes are being driven in part by a scarcity of available rental properties. For example, there were only 165 properties listed for rent in Toowoomba in the week ending 1 November, the lowest number in more than a decade. We’re seeing many tenants choosing to stay put and renew their existing leases rather than compete in a tight rental market for a new home. Some are even offering to pay above and beyond the asking rent and sign long term fixed leases in order to maintain their tenancy.

Looking Ahead to 2022

Demand for property here in Toowoomba continues to outstrip supply, and we anticipate the strong market conditions we’ve seen this year will continue into the next. Experts are predicting our property market will experience a significant surge over the next five to ten years.

COVID living has seen us all put a bigger emphasis on our lifestyle at home, and the desire for a swimming pool, a second bathroom or a home office remains a focus for many buyers and tenants.

With our state and international borders now opening up, we could well see more new buyers and tenants arriving here in Toowoomba from outside Queensland.

Housing affordability declined across the country during the September quarter, with the proportion of income needed to meet loan repayments rising to 36.2%, according to the REIA. While property in Toowoomba remains relatively reasonably priced in comparison to the capital cities, as prices here continue to rise, affordability will be something to keep an eye on.

Two property professionals have offered reassurance to investors that the flooding currently impacting South-East Queensland is not expected to impact the long-term Brisbane housing market.

In spite of a downturn in prices seen following the 2011 floods, Pete Wargent, co-founder of BuyersBuyers Australia, stated that detached houses in the Brisbane region experienced a 25 per cent price increase in the subsequent five years. He predicts that this cycle will be repeated again after this year’s flooding event.

“Over the medium and longer-term, history shows that there will be a relatively insignificant impact on the housing market,” he said.

Similar to the period after 2011, BuyersBuyers chief executive Doron Peleg believes the current flood crisis will eventually become a distant memory for the Brisbane housing market.

“There was a perception after the [2011] floods that flood-prone areas might be perceived negatively or experience poor capital growth, but that did not prove to be the case,” Mr Peleg said 

Key to the market’s substantial rebound in 2011 was the fact that in most cases, buyers were able to largely overlook the “infrequent” risk of flooding in order to acquire a water-side property.

Continuing, he said, “a few years ago, our market research showed that out [of] the top 20 suburbs impacted by floods in 2011, nineteen of them outperformed the Brisbane house price growth benchmark over the following five years.”

The exception to these findings was the north-eastern Brisbane suburb, Pinkenba, which had its pricing impact by other factors, notably its proximity to the airport.

For those looking to buy a house on the Gold Coast, 16 days may be all the time you have to close a deal.

Key points:

• CoreLogic’s latest figures show houses on the Gold Coast are on the market for a median of 16 days, and 15 days on the Sunshine Coast
• The coasts are the fastest-growing non-capital regions in the country
• The head of Harcourts Coastal says the market is being fuelled by “lifestyle decisions”

New data from CoreLogic has revealed houses on the Gold Coast are among the fastest-selling in the country’s 25 largest regions.

Houses on the Gold and Sunshine Coasts and Toowoomba are typically on the market for just over two weeks.

It comes as “no surprise” to the managing director of Harcourts Coastal, Dane Atherton, who says “historically, it would be the lowest in Gold Coast history”.

But Mr Atherton thinks the market is about to level out.

Coast homes in hot demand

CoreLogic’s Head of Research Eliza Owen said houses on the Gold Coast and in Toowoomba were on the market for a median time of just 16 days.

For units, it was about 21 days.

On the Sunshine Coast, houses sell in about 15 days — the quickest selling of the regions.

Ms Owen said the coasts’ booming popularity meant those areas were now leading the pack.

“A year ago, the time on the market for houses was 31 days, so it’s virtually halved,” she said.

The quarterly Regional Market Update revealed house values on the Gold Coast jumped about 36 per cent in the past 12 months, and unit prices about 27 per cent.

“That takes the median house value across the Gold Coast to just over a million dollars,” Ms Owen said.

Record by ‘a country mile’

Mr Atherton said some houses were selling in just 14 days at his Gold Coast agency.

He said houses sold between 60 to 90 days in a normal market.

“It shows you exactly the kind of hot market we are in when we’re as low as 14 to 21 days,” he said.

“By a country mile, it’s the lowest I’ve ever seen in my career.” 

Mr Atherton put the increase down to “lifestyle decisions” to move to the Gold Coast.

“We’ve had early uncertainty followed by a dramatic, unexpected increase in demand, which fuels huge

price growth,” he said.

“We’ve had FOMO [fear of missing out], we had buyer urgency, we had huge southern migration.

“Markets like Surfers Paradise have benefited from international lockdowns in travel … you’ve got these discretionary holiday markets that have become popular because buyers are effectively purchasing a second place of residence … as a holiday home.”

Those looking to buy a house under the hammer are having a tougher time too, with auction clearance rates almost doubling in a year.

Mr Atherton said more properties were going to auction and selling on the day, rather than in the days that followed.

“Sellers want to capitalise on increased buyer demand and they don’t want to undersell,” he said.

Mr Atherton said, traditionally, auction clearance rates pre-COVID were sitting around 50 per cent in south-east Queensland. 

“To have a 90 per cent or 95 per cent clearance rate on the Gold Coast or even in south-east Queensland is unheard of,” he said.

But Mr Atherton said there was a light at the end of the tunnel for buyers, and he believed the market was about to stabilise.

Ms Owen said it would be “very unlikely we’ll see another 36 per cent growth rate in 2022”.

“A rise in interest rates will see a broad-based downturn in housing market activity, and that could see people looking to buy regionally hold off as well,” she said.

Newcastle’s John Hunter Health Campus is in line for a $780-million redevelopment including a new acute services building to help provide healthcare for the region’s growing population.

The State Significant Development has won approval from the New South Wales government to redevelop and future-proof the healthcare precinct in the western suburbs of Newcastle, which currently regularly operates at 98 per cent capacity.

The government originally announced the John Hunter Health and Innovation Precinct in 2019.

Architecture firm BVN said it would “deliver an innovative and integrated precinct” which would meet the future needs of residents in the Hunter.

“The John Hunter Health and Innovation Precinct Project is being planned and designed with ongoing communication and engagement with clinical staff, operational staff, the community and other key stakeholders,” the BVN design report said.

“The proposal will facilitate the development of a new state-of-the-art health facility which will further support and strengthen the services and facilities provided at the hospital for the benefit of the Hunter New England Local Health District.”

According to town planners Ethos Urban, the redevelopment was a “significant investment in the Hunter region” and would deliver about 5500 direct and indirect jobs during the construction phase, and ongoing health services jobs in Newcastle and the Hunter region.

The approved plans are for a new seven-storey acute services building to expand and enhance the emergency department, intensive care services, operating theatres, women’s services, a new rooftop helipad and increased car parking.

It also includes the refurbishment of existing buildings to provide additional inpatient units, a new Hospital entry canopy, new roads, a link bridge to the Hunter Medical Research Institute, and connections to the Newcastle Inner City Bypass.▲ A new entry canopy to the hospital and a seven-storey acute services building are part of the redevelopment of the John Hunter Health Innovation Precinct.

NSW health minister Brad Hazzard said the redevelopment would significantly increase critical care capacity, with a 60 per cent increase in the Intensive Care Unit capacity, and almost 50 per cent more operating theatres.

“The precinct will drive innovative collaborations between the health, education and research sectors, ultimately improving patient outcomes for communities in the Hunter region,” Hazzard said.

Hazzard officially opened a $194-million clinical services building at Coffs Harbour Hospital earlier this month.

“This is an incredible transformation of critical health care for the Coffs Harbour and surrounding communities, which will now benefit form a much larger emergency department, additional operating theatres and inpatient beds,” Hazzard said.

“The NSW government is committed to providing world-class health care to all NSW residents, no matter where they live.”

In the year she has spent trying to secure a family home in Newcastle, Sally has missed out on multiple auctions and offers.

“Homes are going $300,000 to $400,000 over guide,” she said.

“It’s a really tough time to enter the market.

“It’s just making the disparity of wealth wider and wider among families.”

Martin Jackson has been searching for land in the Hunter Valley for two years to set up a cellar door to showcase his wines, which are made from honey.
“It’s disappointing that there’s not much on offer for less than a million dollars,” he said.
“The prices two years ago were reasonable … I’ve noticed, probably in the last six months, there’s been a massive surge.

Land values soar

Property remains hot across regional New South Wales and is contributing to higher land values.

The Valuer General’s analysis of 67,000 sales in the 2020-21 financial year found soaring residential land values in regional areas.

Selena McMullen, senior project officer for the Valuer General’s office, says land values are based on the analysis of property sales.

“Statewide, the increases have been driven by COVID and the trend to working from home, which has allowed purchasers to look at some lifestyle changes, whether it be a green change or a tree change or a sea change,” she said.

The Hunter Coast saw the largest increase to total land values, including residential, compared to other NSW regions.

Residential land values rose by more than 38 per cent for the Central Coast, Lake Macquarie, Newcastle and Port Stephens local government areas collectively.

The previous year’s rise for the Hunter Coast was just more two per cent.

Across the state, residential land values increased by almost 25 per cent compared to about four per cent the previous year.

Pockets of regional NSW saw much larger rises, including Kiama and Byron Bay, which increased by more than 50 per cent.

Will this affect your rates?

Revenue NSW will use the land values to help calculate the 2022 land tax with assessments averaged out over a three-year period.

Ms McMullen said this set of values would not be used for council rates and stressed that any increase would be determined by a rate peg set by the Independent Pricing and Regulatory Tribunal.

“Landowners don’t need to worry about these land values impacting on their rates,” she said.

Other land value types, including commercial, have also increased.

For the Hunter Coast, values increased by more than 29 per cent, slightly behind Sydney’s west, which saw the largest jump of more than 30 per cent.

Rod Dever, president of the Gosford Chamber of Commerce on the Central Coast, said the region was attractive to business owners because of its proximity to Sydney.

“If you look at it over a five-year time period, then I think it’s a great thing,” he said.

“It’s attracting new business, it’s attracting business growth, it’s increasing the valuation and the importance of the Central Coast as a commercial and business space.”

Opposition Leader Anthony Albanese will promise hundreds of millions of dollars for a fast rail link between Sydney and Newcastle if Labor wins the upcoming federal election as part of a plan to start a high-speed rail network along the nation’s east coast.

Mr Albanese, who will unveil the plan at a speech on Sunday in the Labor heartland of Newcastle, said a $500 million down payment for the new link between the regional centre and the country’s largest capital city would be provided in his first federal budget. The initial funds would help cover the purchase of land in the corridor, planning and early works but the project would require state government involvement.

Labor previously said it would create a high-speed rail authority if it won the upcoming federal election in an effort to launch a “nation building” project running from Melbourne to Brisbane. Trains on the line would run at 350km/h and stop in Canberra, Sydney and other regional centres.

“The growth that we’ve seen outside [capital cities] will accelerate and that growth, when you look at decentralisation, is more attractive for people,” Mr Albanese told The Sun-Herald and The Age ahead of the speech.

He said shorter commutes from regional areas could help with housing affordability, reduce emissions and road accidents from the number of cars commuting and encourage more businesses to move out of the capitals. Cost of living, including property prices, has become an early fighting ground between the Coalition and Labor in the lead-up to the election.

“If you change that dynamic [the length of time it takes to get from regional hubs to capital cities] you change the economics of business locations in favour of decentralisation,” he said.

The high-speed rail network would include stops on the Central Coast and cut a trip from Sydney to Newcastle to 45 minutes. At the moment the trip takes 2½ hours. The initial stage of fast rail would cut this leg of the journey to two hours.

Mr Albanese will also unveil plans on Sunday to provide additional support for after-hours GP access, reversing about $500,000 in cuts. Labor says operating hours have been reduced at after-hours healthcare clinics in areas including Newcastle. The service assists 50,000 patients a year including through 70,000 telephone consults.

During the 2019 federal election Labor suffered a significant swing in the seat of Hunter. In the 2021 Upper Hunter state byelection there was also a notable swing against Labor.

The NSW government has been undertaking planning work to provide a fast rail line between Sydney and Newcastle, with proposals and discussions about the potential of these links under way for years.

In April, former NSW premier Gladys Berejiklian said the government was renewing its commitment to faster rail to regional centres. Federal Labor’s plans are in line with existing state plans but would aim to speed up the delivery of the infrastructure.

Mr Albanese said fast rail was a “genuinely transformative project” and would need to be undertaken with the states.

“We’ll provide the funding straight away, but we will sit down with NSW and it would have to be the subject of appropriate conversation [with the state government],” Mr Albanese said. “Sydney is the key.”

When this part of the project was secured, he said there would be scope for the authority to work on a Sydney to Melbourne link where there were clear economic benefits for the investment.

“We’ll have more to say on corridor acquisition and other things [for that part of the link] down the track,” he said.

“The Commonwealth should be playing a role in genuine economic transformation … and looking for projects that boost productivity and boost the economy.”

The Urban Developer’s latest Brisbane housing market insights reveals that the city’s house prices is on track to outperform all other Australian capitals during the next 12 months.

This resource, updated periodically, will collate and examine the economic levers pushing and pulling Brisbane’s housing market.

Combining market research, rolling indices and expert market opinion, this evolving hub will act as a pulse check for those wanting to take a closer look at the movements across the market.

Brisbane housing prices grew almost three times as much as expected this past year, with prices set to rise further amid fresh predictions it will outperform all other Australian capitals in 2022.

Brisbane has well and truly surpassed expectations of a dwelling price rise of 8 per cent in 2021, instead notching a 25 per cent jump off increased interstate migration, low stock and heightened demand.

Brisbane’s house prices have increased by a staggering 27.9 per cent in the past year, with the median price now $757,000, following a peak-to-trough fall in values of -1.4 per cent between April and September 2020.

November’s bump in dwelling prices was a modest increase from the previous month, when dwelling values grew at a rate of 2.5 per cent.

House price growth has also seen an uptick and unit prices have lost some momentum after lifting by 2.8 per cent and 1.3 per cent respectively in October.

According to Corelogic, property values rose 2.9 per cent in November—the biggest increase of any capital city—to be up 25.1 per cent over the year, providing sellers with a gross yield of 3.8 per cent.

The rise in Brisbane home values over November, the most in 18 years, was closely followed by Adelaide, which was up 2.5 per cent for the month, the biggest gain in 28 years.

The current median value for a property is now $662,000, and has further advanced an additional $20,000 during November.

A typical Brisbane house is now about $180,000 more expensive than it was at the beginning of January, while units have experienced a gain of $52,000.

Brisbane’s north remains a hot spot for property price growth, with an increase of 24 per cent across the year, while inner Brisbane houses have recorded record rises of up to 28 per cent for the year.

In the past three months, Bunya in Moreton Bay has surged by 12 per cent with a similar increase in Auchenflower in the inner west.

Teneriffe and New Farm have now crossed the $2-million median mark with Ascot and Hamilton likely to follow suit early next year.

Brisbane’s housing market: policy updates and trends

Affordability, not interest rates will slow housing market

Concerns about the impact of a possible interest rate rise on the booming property market may be growing, but opinion is sharply divided over what effect it may have, and when.

The Reserve Bank of Australia has indicated an interest rate rise was likely to remain at 0.10 per cent in 2022 after dropping to that level in November 2020.

Home buyers the winners as owners rush to sell

Residential listings are set to pile up when the housing market reopens in January with a surge in the number of homeowners looking to sell before prices peak.

Requests for appraisals have jumped by 19 per cent in Brisbane indicating that a large number of potential vendors are looking to enter the market in the new year.

Olympics to push Brisbane market’s limits

Brisbane house prices could more than double by the time the 2032 Olympic Games roll around, taking median home values above $1.4 million, economists predict.

The growth rate would be consistent with the market’s past performance during the G20 summit in 2014 in Brisbane, when dwelling prices surged 112.7 per cent over 12 years from when the event was announced in 2003 to 2015, a year after it was held.

What the experts are saying about Brisbane’s housing market

Eliza Owen
Head of Research
Corelogic

“The housing market is well and truly past its peak for the current cycle, and it makes sense that as more headwinds accumulate, price increases will continue to slow, and more suburbs may see an adjustment in price.

“Fixed mortgage rates appear to be bottoming out, and this will limit the amount of finance that can be taken out as well.

“In the short term, we’ve still got a week or two before we hit the peak spring selling season, so more available listings will reduce price pressures.”

Shane Oliver
Chief Economist
AMP Capital

“By the end of next year, I think the upswing will come to an end, and we’ll start to see price falls as higher interest rates feed through.

“I think later next year, we’ll start to see higher variable rates, and the combination of higher interest rates, poor affordability and increased listings, I think will start to weigh on the property market.

“The overall picture for the housing market is still strong, but it’s slowing, and I suspect that as we go into next year, the pace of growth will slow dramatically.”

Nicola Powell
Senior Research Analyst
Domain

“The [recent] surge in appraisals is quite revealing, particularly at this point in time as we’re so close to the end of the year.

“I think this shows that more homeowners are thinking of putting their homes on the market, for fear of missing out on the peak, and that will probably come to fruition early next year.

“Housing stock is now building up and rapidly changing the dynamics in the market in favour of the buyers.

Louis Christopher
Managing Director
SQM Research

“The win of the 2032 Brisbane Olympic Games is clearly a positive for the city’s economy.

“It is likely to help with the housing market over the next ten years. So we can expect outperformance of the Brisbane housing market compared with other Australian cities over this time.

“It will also benefit over the short term from interstate migration inflows from Sydney and especially Melbourne, notwithstanding any future state border closures.”

Brisbane housing market forecasts

ANZ has tipped house prices to jump by 9 per cent next year in Brisbane before falling by 4 per cent in 2023 as the post-pandemic boom cools.

CBA now expects Brisbane house prices to increase by 9 per cent next year before plunging by 8 per cent in 2023 when the Reserve Bank ramps up interest rates.

NAB is forecasting Brisbane house prices to rise by 5 per cent over across 2022 as impact of low rates and strong income support begin to fade.

Westpac has also updated its property forecasts, with Brisbane real estate prices tipped to surge 10 per cent between 2022 before dialling back -1 per cent in 2023.

Brisbane’s auctions market is currently red-hot after the city escaped the worst of the pandemic disruption, drawing increased population from disenchanted southerners.

The market has moved from strength to strength and shows no sign of slowing down, remaining one of the few cities on an upward trajectory a year into the latest property boom and over November recorded a healthy clearance rate of 80.5 per cent across 1053 properties.

The city’s best performing suburbs—Norman Park, Indooroopilly and Camp Hill—have experienced median house price hikes of up to 36 per cent in the past 12 months and are amongst the most sought after on Domain and REA.

According to Domain, Norman Park—which topped its list for house price growth—saw the median climb 36.3 per cent to $1.24 million, with Indooroopilly collecting a 35.9 per cent lift to send the median house price to $1.277 million.

The fast-booming suburb of Camp Hill secured third place with a rise of 34 per cent, which sent the median house price to $1.2 million.

Different supply dynamics are also creating divergent trends across Australian capital cities and placing pressure on agents struggling to find stock.

Across November, the total stock available for sale across Brisbane was 33.9 per cent lower than the five-year average.

Comparatively, stock levels in Sydney and Melbourne have become far more normalised in recent weeks, with Sydney total listings sitting just 2.6 per cent below the five-year average, while stock levels across Melbourne are 7.9 per cent above the five-year average.

The national rental vacancy rate has now fallen to a 10 year low, of 1.6 per cent, as improving economic and health outlook prompts a rush of tenants to lease vacant rental properties.

Fewer properties are being left empty in Australia’s biggest rental markets, with vacancy rates falling or holding steady in each of the capital cities, new figures show.

Rising vacancy rates across the capitals have been brought to a halt, and are likely to fall further in the months ahead as the end of lockdowns and border restrictions near.

This should mean increased rental demand from returning Australians, international students and migrants.

Vacancy rates halted their upward climb in the locked-down cities of Melbourne and Canberra, falling slightly while the rate continued to track sideways in Brisbane.

The vacancy rate in the Brisbane CBD has dropped by 20 basis points so far this year to now be 8.4 per cent.

Since the onset of the pandemic, capital city house rents surged 10.1 per cent, while unit rents stayed 0.3 per cent below pre-Covid-19 levels.

Brisbane’s relatively low impact from the pandemic has meant that house rents have risen for five consecutive quarters—consistent growth not experienced since 2007.

Mount Ommaney has been the city’s top performing suburb after house rents there rose over the last year by $138 per week to now be $690.

Cornubia, Fig Tree Pocket and Seventeen Mile Rocks have all experienced similar rental increases, rising in that period by 19.9 per cent to $535, 17.2 per cent to $700 and 16.1 per cent to $560, respectively.

Bulimba is now the city’s most expensive suburb to rent a house after a 9.3 per cent annual hike sent weekly asking prices to $765 while Kenmore Hills is a close second after prices rose 7.6 per cent to $710.

House rents in South Brisbane suffered an annual 8 per cent drop to $460 while Grange house rents, in the city’s north, also took a dive of 7.6 per cent to $550, with Manly in the bayside south suffering a slump of 5.1 per cent to bring house rents to $490.

For the apartment market, the worst-performing suburbs were Sunnybank and Macgregor, which suffered price drops of 5.1 and 4.8 per cent to bring weekly rents to $370 and $400, respectively.

Australia’s new home building boom is set to continue next year, with about 190,000 homes—including 121,000 houses—tipped to be built nationally.

Approximately 25,000 new houses and 18,000 units will be constructed in Queensland next year, according to the Housing Industry Association.

Brisbane’s house building construction costs increased 7.4 per cent in the past year, and remains one of the most expensive regions to build in the country behind Hobart, Adelaide and Melbourne.

The price of timber has lifted by 12.4 per cent over the year in Brisbane, 31.7 per cent for steel, 7.3 per cent for plumbing products, 2.3 per cent for electrical equipment and has reduced by -2 per cent for concrete.

In order to raise a 20 per cent deposit, the typical Brisbane house buyer now needs around $140,000 and unit buyer $79,000.

In Queensland, the average figure for a loan for buying a newly built home is $461,000 and $489,000 for a loan to build a new home.

The average monthly repayments for an existing home is currently $2075, $1980 for a newly built home and $2100 for a new construction.

In September, the Reserve Bank governor, Phil Lowe, ruled out using interest rates “to cool the property market”, meaning low rates were likely to stay until 2024.

Lowe said the cash rate would stay on hold until “actual inflation is sustainably within the 2–3 per cent target range”, likely not until 2024 due to low wage growth despite a tightening labour market.

Lowe acknowledged that young people were “paying a heavy price” during the Covid pandemic due to lockdowns and public health measures, citing increasing incidence of mental health issues and calls to support services.

The latest ANZ-Property Council quarterly survey shows industry players expect a tightening in credit conditions over the next 12 months.

New lending finance to owner-occupiers has already peaked while first home buyer finance has been trending down since its peak in January. Home lending to other owner-occupiers has fallen 10 per cent over the past two months.

Growth in investor lending is positive after more than doubling in the year to May.

Interstate migration into Queensland, growing at its fastest rate since late 2003, has remained a tailwind for housing demand.

Brisbane’s population grew by 1.9 per cent during 2019-20, recording the highest growth rate of all capital cities, according to Australian Bureau of Statistics data.

Queensland experienced a net gain of 28,500 people from interstate in the March quarter and 21,465 departures.

Queensland’s population is expected to surge by more than a quarter of a million people in the next four years according to forecasts in the federal budget, as people flood in from other states.

Treasury boffins have predicted Queensland is set to gain around 20,000 people from interstate each year for the next four years—amounting to almost 85,000 new residents by mid-2025.

Next year alone, federal treasury estimates see Queensland gaining 23,800 new interstate residents, while Victoria is set to lose 1200 and New South Wales is tipped to shed as many as 15,500.

With a population of roughly 3.7 million, Queensland’s southeast is Australia’s fastest-growing zone.

Queensland’s population is predicted to hit 5.44 million by mid-2025, up from 5.17 million as of June 2020.

Australia’s pandemic property boom continues its upwards trajectory, with the latest figures revealing housing values rose in November for the 14th month in a row.

Property values have climbed more than 20 per cent over the year nationally, adding approximately $126,700 to the median value of an Australian home.

But the market is losing steam. Although housing values continued to rise in November – nationally, they’re up by 1.3 per cent – the November result was the softest outcome since January, CoreLogic’s latest national home value index revealed.

Across Sydney and Melbourne, conditions have slowed sharply with the sudden rise in new listings and affordability pressures taking their toll.

Sydney housing values rose 0.9 per cent over the month, while Melbourne by 0.6 per cent – a far cry from the massive rises in March this year when prices soared by 3.7 per cent in Sydney and 2.4 per cent in Melbourne.

CoreLogic research director Tim Lawless said the slowdown in the pace of growth was due to a number of reasons.

“Virtually every factor that has driven housing values higher has lost some potency over recent months. Fixed mortgage rates are rising, higher listings are taking some urgency away from buyers, affordability has become a more substantial barrier to entry and credit is less available,” he said.

But the boom was far from over, Mr Lawless said.

“The heat’s come out of the market but it’s still a hot market,” he said. “The boom isn’t over. Even in Melbourne and Sydney, where it’s slowed, you’re still seeing values rise 1 per cent in a month.

“Even though the market has slowed, the rate is still well above average. If you’re looking at the marketplace in Sydney, that 1 per cent [rise] is still nearly a $10,000 increase in a month.”

The fastest-growing property markets in Australia are now in Brisbane and Adelaide, where housing values are rising rapidly. They are the only capital cities yet to experience a slowdown.

Brisbane’s home values hit a cyclical high, rising by 2.9 per cent in November. That’s the fastest rate of growth for the river city in 18 years, adding $18,500 to the cost of a property in just one month.

Adelaide values rose 2.5 per cent, which equates to a rise of $13,500 – the highest rise since February 1993.

“Relative to the larger cities, housing affordability [in Brisbane and Adelaide] is less pressing – there have been fewer disruptions from COVID lockdowns and a positive rate of interstate migration is fuelling housing demand,” Mr Lawless said.

“On the other hand, Sydney and Melbourne have seen demand more heavily impacted by affordability pressures and negative migration from both an interstate and overseas perspective.”

Different supply dynamics are also creating divergent trends across Australian capital cities. In the four weeks to November 28, the total stock available for sale across Adelaide was 32 per cent lower than the five-year average, and 33.9 per cent lower across Brisbane.Across Sydney and Melbourne however, stock levels have become far more normalised in recent weeks, with Sydney total listings sitting just 2.6 per cent below the five-year average, while stock levels across Melbourne are 7.9 per cent above the five-year average.

Mr Lawless said he expected new listings would continue to rise into the new year, which would be a key factor driving the slowdown in capital growth.

“It’s no surprise that those cities where stock levels are starting to rise faster, buyers are getting more leverage and getting more choice,” he said.

Houses have continued to outperform units, with capital city values up 1.2 per cent and 0.7 per cent respectively over the month.

Based on median values, capital city houses are now 37.9 per cent more expensive than capital city units – the largest difference on record.  In dollar value terms, a capital city house is averaging approximately $240,500 more than a capital city unit.  In Sydney, where the gap between house and unit values is the widest, a house costs $523,000 more on average than a unit.

“With such a large value gap between the broad housing types, it’s no wonder we are seeing demand gradually transition towards higher density housing options simply because they are substantially more affordable than buying a house,” Mr Lawless said.

Heading into 2022, Australia’s property markets would continue to rise, albeit at a milder rate, he said.

“The market still has somewhere to go before prices start falling. The cue for the market to go down is when rate rises happen,” Mr Lawless said.

“My guess is through 2022, the rate of growth will gradually ease off but prices will probably still rise.

“Importantly, there’s going to be more diversity in the results. It’s not going to be every market recording double-digit annual growth – that will be the exception to the rule.”