What Can History Teach us about the Future of Brisbane Property?
Published June 13, 2022
We’re hearing plenty about inflation and interest rates right now and the media is trying to tell you that the end is near in relation to the real estate boom here in Australia.
I wanted to take a moment to zoom out and assess the situation with some actual data rather than rely on emotionally charged words and fearmongering.
If you take a look at the first graph, you’ll see that property in Australia has been on an upward trend for quite a while now with this data dating back to 1986, courtesy of the Bank for International Settlements.
The orange line shows the prices in Sydney while the blue line shows an aggregate of the capital cities, including Sydney. The index of 100 was in 2011 and growth was fairly similar at that stage.
From 2012 onwards, Sydney started to streak away and over that 10 year period we can see that prices across all cities have almost doubled at 196 in 2022 vs 242 for Sydney with over 140% growth.
In Australia, we have this idea that property always goes up but it only takes a little bit of analysis of other markets around the world to see recent times when prices went down.
Ireland is a key example having only just recovered from the drop in prices after 2008 based on a 2005 index and reaching 111 by 2020.
Toronto, on the other hand, has almost tripled over that period and New Zealand also saw similarly dynamic growth.
As you can see, the graph is steepest since 2020 in New Zealand when all the Covid-19 real estate growth occurred.
So how does it look in Brisbane?
As you can see, we’ve had positive growth most years since 2008 with only 2012 showing a negative result with a 5% downturn.
What about when we take sales numbers into account? How does that look?
Well, there are two pieces of data that stand out to me here:
1. Sales numbers spiked in 2008 and last year was the closest we came with over 3000 less sales: and
2. Sales numbers were lowest in 2012 which was the only year when we saw prices drop (by 5%.)
It’s clear that people have a tendency to hold onto their houses in a falling market. In other words, any potential loss is not realized because that only occurs when the asset is sold. If you don’t have to sell in a falling market, you can wait.
In saying that, even if we were see prices drop slightly over the next 12 months, this is off the back of the two strongest years of growth over the last decade with prices well above the where they were a couple of years ago.
I’d hazard a guess that most people haven’t even had their property appraised in the last 12 months to learn what it’s now worth in this strong market.
In the long run, it seems reasonable that growth will continue here in Brisbane with the Olympics scheduled in for 2032, infrastructure works continuing and prices significantly cheaper than Sydney and Melbourne. Oh, and don’t forget about the warmer winters..
If you have plans to make some lifestyle changes by trading your property in for something better suited to your future, speak to your local agent, like me.
If you are looking to buy in Brisbane, the below video shows:
the high and low growth suburbs across Brisbane;
the affordable areas to buy a house;
an overview of the unit and townhouse market; and
the skills you need to learn to speak with agents and close deals faster and more easily.
I'm now at a new agency since this video so my email address is Chris.andersen@raywhite.com
This is then backed up with data from every suburb in Brisbane over the last decade for houses and units at this link. Just reach out to me for the password on 0424 682 636.