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Brisbane and QLD market update – June 2021


We’re halfway through the year and still the Australian property market is turning in big monthly results.

CoreLogic’s latest home value index has reflected another +1.9 per cent increase in median property values around the country, and Queensland has stuck closely to that figure, both regionally and in metro Brisbane.

Undersupply meeting pumped up buyer demand and sustained record-low interest rates have kept the housing boom rolling on, but signs of easing growth look to be on the horizon.

We look into what the current numbers are telling us and where things could be heading in the Queensland market.

Brisbane’s market update

Houses Units
Monthly change: +2.2%
Monthly change: +0.7%

Brisbane’s movements mirrored the national market’s growth this month, and as a result the +1.9 per cent bump has brought the city’s median property price up to $586,142.

That’s around a $11,500 increase in the space of just 30 days.

Units close out the financial year with gains of +5.3 per cent, while houses blazed ahead a fiery +14.8 per cent over the last 12 months, a full $100,000 jump.

As has been the case all year, the boom has been driven by a shortage of housing stock to satisfy huge buyer demand.

According to SQM Research, the number of new listings coming to the market in June was nearly identical to May, yet total listings dropped by -4.0 per cent for the month.

That indicates that properties are still being bought up faster than new ones can be listed, and older stock that had previously struggled to sell is now being seen with fresh eyes as buyers spread their search wider and wider.

QLD regional market update

Houses Units
Monthly change: +1.8%
Monthly change: +1.8%

Aside from Victoria, where the Melbourne property market’s recovery has been stunted, Queensland is the only state where the regional market has outperformed its capital city over the past six months.

While Brisbane edged ahead for June, the Sunshine State’s regional areas have remained in high demand throughout 2021, particularly with interstate buyers looking for a lifestyle change in areas like the Sunshine Coast and Gold Coast.

It’s resulted in year-to-date growth of +11.8 per cent for regional Queensland, pushing the median home price up by just over $44,000 in just six months.

CoreLogic’s new Million Dollar Markets report, which tracks suburbs that broke through the $1 million median barrier between May 2020 and 2021, found that Queensland was the only state where the regional market had a higher number of new entries than the capital city counterpart.

The list more than doubled with 25 new million-dollar markets, all from the Sunshine Coast and Gold Coast. Burleigh Heads on the Gold Coast grew by 39.2% while Buddina on the Sunshine Coast grew by 31.2%

With Covid outbreaks in capital cities around the country in recent weeks, Queensland’s regional destinations seem to be as appealing as ever.

Brisbane and QLD rental market update

While the rental markets in Sydney and Melbourne are still in strife, the rest of the country is in a healthier state, Queensland included.

CoreLogic notes that property prices are rising faster than rents around the country, and as a result gross rental yields in Brisbane and regional Queensland have both taken a 0.1 per cent dip for June, ending up at 4.1 and 4.9 per cent respectively.

Rents are still rising significantly in Brisbane, though, where house rents are up +8.4 per cent over 12 months. Units posted a more muted +3.8 per cent rise.

“As with national home values, much of the increase in rental rates may be associated with government stimulus, increased household savings and a strong economic recovery from Covid restrictions” explains Eliza Owen, CoreLogic’s Head of Research Australia.

Looking at the latest figures on vacancy rates from SQM Research brings good news for investors.

Vacant properties in Brisbane have dropped by an average of 0.1 per cent every month since January, with May’s vacancy rate as low as 1.3 per cent.

What’s next for the Brisbane and QLD markets?

Having managed to avoid the kind of Covid outbreaks that have caused longer lockdowns in Melbourne and Sydney, property in the Sunshine State continues to be a very attractive proposition for interstate buyers.

However, CoreLogic has cautioned that affordability constraints could take some wind out of the market’s sails in the coming months, and they anticipate an easing in the rate of growth.

Given the unexpected strength of Australia’s economic recovery, the big banks are predicting interest rates to rise before the RBA’s 2024 forecast, some saying as early as 2022.

As a result, mortgage rates are beginning to creep up, and that’s another factor CoreLogic says could cool the market down in the second half of this year.

In any case, right now it still looks very much like a seller’s market in Brisbane and Queensland’s regional hubs.

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Charter Hall leads the charge with $560m industrial deals

Charter Hall

Funds management and development juggernaut Charter Hall has swooped on $560 million worth of industrial properties as it builds its pipeline to service the explosive growth in the ecommerce, data and cold storage sectors.

Defying the pandemic-hit market conditions, it has acquired and settled 17 assets which have lucrative high-quality tenant covenants, with long lease terms ranging up to 16.9 years and located in large industrial precincts with proximity to major infrastructure and metropolitan areas.

Further boosting its $16 billion pipeline, Charter Hall has purchased a number of development sites that come with surplus land for expansion and development. The group has forecast the industrial portfolio will grow beyond $20 billion.

Charter Hall is an ASX-listed $7.75 billion diversified manager that specialises in assets with long leases across the traditional sectors of office, retail and industrial as well as fast-moving consumer foods, pubs, healthcare and childcare.

Charter Hall chief executive David Harrison said the acquisitions build on the group’s strong momentum in acquiring high-quality industrial assets in prime locations across Australia.

“We continue to lead the Australian market in deal volume, and our ability to secure high-quality assets off-market continues to deliver long-term value for the business and superior outcomes for our capital partners and investors,” Mr Harrison said.

Major tenant customers secured with the latest acquisitions include Australia Post, Toll, Border Express, Cleanaway, Zirconia (Iron Mountain) and state government agencies. One large site is the distribution centre in Lytton, Brisbane leased by Kmart.

Charter Hall industrial and logistics chief executive Richard Stacker said with a further $3 billion of investment capacity together with a captive development pipeline, “we would expect our $16 billion industrial portfolio to grow beyond $20 billion over coming years.”

The deals reflect how the country’s commercial property sales moved up a gear in the second quarter, with the industrial sector posting the strongest ever quarterly deal flow, the latest Australia Capital Trends report from Real Capital Analytics (RCA) shows.

Benjamin Martin-Henry, RCA’s head of analytics, Pacific, said quarterly sales of industrial stock outpaced offices and retail properties combined for only the second time since the start of 2020, having never achieved this feat in the previous two decades.

“This record was despite a relatively quiet first quarter for the industrial market. With a hefty deal pipeline of around $2 billion of industrial deals awaiting settlement, 2021 is highly likely to be a record-breaking year for the sector,” Mr Martin-Henry said.

Commercial property sales worth $13.4 billion were closed over the second quarter, up 15 per cent on the same period last year. For the first six months of 2021, volumes reached $21.2 billion, up 11 per cent compared to the same period in 2020.

Together with the Charter Hall deals, Blackstone completed the sale of the Milestone Industrial Portfolio to GIC and ESR for $3.8 billion, while LOGOS, together with partners Australian Super, Ivanhoe Cambridge, TCorp and AXA IM Alts, bought Australia’s largest intermodal logistics facility – Moorebank Logistics Park (MLP) in Sydney – for $1.67 billion from Qube.


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Bridge to 2032 – Brekky Ck span approved, missing link for Games athletes’ village

Brisbane is set to have another major infrastructure project underway by the end of the year after Lord Mayor Adrian Schrinner lodged the final design of the Breakfast Creek green bridge with planning officers for approval.

The $67 million project is likely to provide a smoother connection for pedestrians and cyclists moving between the fast-growing riverside development at Northshore Hamilton and the CBD.

The 80-metre arch will cross Breakfast Creek to connect Newstead Park with the existing Lores Bonney riverwalk which was part of the now completed Kingsford Smith Drive upgrade.

“This is a crucial step towards securing the final approvals we need to commence work on the green bridge that will provide a $67 million investment in local industry, deliver a new active transport options and create 140 local construction jobs,” Schrinner said.

“The Lores Bonney Riverwalk is currently used 2300 times a day, and this new green bridge will improve safety and increase capacity to the riverwalk by creating a continues walking and cycling connection.”

He said the Breakfast Creek project would join the now-approved Kangaroo Point green bridge as fast-tracked investments to create jobs as the city headed out of the coronavirus pandemic.

Brekky Ck

The council has also linked the project to the 2032 Olympics, saying it will be a “key connector” for the planned Athletes Village at Hamilton and provide a critical transport link for the Games.

Two other cross-river pedestrian and cycle links connecting Toowong to West End and St Lucia to West End remain on the council’s green bridge program books but are yet to be funded.

The council insists the remaining bridges need federal and state government funding to go ahead.


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Green ‘Grand Central’: Cross River Rail unveils changes to parklands vision

Cross River

Developers of Queensland’s biggest infrastructure project, the $5.4 billion Cross River Rail, appear to have bowed to public pressure and moved to preserve more public space in its redesign of the city’s Roma Street parklands precinct.

The Cross River Rail Delivery Authority has confirmed it will allow more public open space in a revised development plan for the area.

A new development scheme for the Roma St precinct, which will contain the state’s most most important transport interchange (dubbed Grand Central) as well as the proposed Brisbane Live arena, identifies new green areas and more affordable housing than was originally planned.

The Palaszczuk government has insisted that the development of an underground Roma St station as part of Cross River Rail is a chance to revitalise an under-used part of Brisbane into a major opportunity for private investment.

The government expects that over the next 15 years there will be nearly 4200 new residents and more than 19,700 new workers within the 32 hectare Roma Street priority development area, bounded roughly by Wickham Terrace, North Quay and College Rd.

However, the delivery authority came under fire for giving over part of the Roma St parklands which houses a public car park and Brisbane City Council maintenance depot to residential and commercial development.

The authority now says under the finalised development scheme the precinct would have more “publicly accessible open space”.

“The existing 11 hectares of publicly accessible open space within the Roma St Parklands will not only be protected forever, but will be expanded even further by more than two hectares,” the authority said in a statement.

“The development scheme also provides for new social and affordable housing as part of new residential buildings parallel to the rail corridor, adding to the existing apartment complexes along Parkland Boulevard.”

“This scheme is all about renewing one of Brisbane’s most underutilised inner-city locations while protecting and enhancing the beautiful natural features that already exist. ‘

About 46,000 people each weekday are expected to use the new high-capacity underground station at Roma Street by 2036.


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