After an intense year of negotiations, Brisbane prestige agent Matt Lancashire usually takes a six-week break for Christmas, spending time with family at the beach.
He will, however, start 2020 on a different note, returning to the office earlier than usual, ready to capitalize on the momentum and interest that’s been building around the city’s prestige property sector.
“Brisbane’s premium suburbs have received significant interest from buyers this year, and although we’re not seeing one-off record sales at the very top end of the market, there’s been significant momentum on property worth A$2 million to A$7 million,” Mr. Lancashire said, having personally settled A$97 million (US$66.6 million) worth of prestige property in Brisbane during 2019.
“The average sale price across my settlements was just over A$3 million,” he said. “Not only are there more buyers at this price point but they are more confident about the economy and Brisbane in general. The only problem we’re finding is there hasn’t been enough quality stock required to satisfy this segment.”
Ironically, yet affectionately, the area has been known for several years as “Brisvegas,” referring to the city’s once lack of nightlife and country-town like quietness.
Even as the city has matured and grown to 2.4 million people—accounting for 19% of the country’s population—the nickname has stuck.
The South East Queensland city, the third-largest behind Sydney and Melbourne, has a renowned lifestyle, warm climate and proximity to beaches, all significant drawcards, Mr. Lancashire said, having witnessed a greater depth to the market compared to previous years, with 22 transactions priced between A$2.4 million and A$3 million.
High-profile prestige sales in Brisbane in 2019 included the A$5.6 million transaction of a Frank Lloyd Wright-inspired waterfront home on Ivy Street, Indooroopilly, purchased by Australian swim star-turned-radio host Susie O’Neill and her surgeon husband, Cliff Fairley.
Other notable transactions included the A$4 million sale of a luxury architecturally renovated home at Reading Street, Paddington, a significant price for a block measuring just under 700 square meters in size.
The auction of a waterfront house on Griffith Street, New Farm, 2.5 kilometers west of the city, set a record price, according to Real Estate Institute of Queensland records for a property sold under the hammer, with eight bidders vying for the five-bedroom property that sold in March for A$7.75 million.
The city’s most expensive home—which sold in January 2017 for A$18.5 million—went back on the market in late May, relisted with Place Estate Agents New Farm agent Heath Williams.
As Brisbane’s most expensive trophy home ever sold, the cliff-top mansion on Leopard Street, Kangaroo Point, was a “very particular home” that had attracted a couple of offers, second inspections and serious interest, but would take time to find the right purchaser.
“In Brisbane, people who do have a lot of money sometimes don’t want people to know that they have a lot of money, and some people won’t even look at a home like this because they know it will make headlines,” he said.
“When people are spending A$18 million to A$20 million in Brisbane, there is an expectation you can achieve all your needs, wants and desires in one go,” he added.
National search figures from Australia’s largest online listing portal realestate.com.au shows that Brisbane ranks as the second most popular location buyers search for online after Australia’s perennial lifestyle destination, the Gold Coast.
REA chief economist Nerida Conisbee said almost 90% of searches for Brisbane were from Australian-based buyers, followed by those based in the U.K., New Zealand and the U.S., with positive price growth occurring in key blue ribbon suburbs.
“There has been house price growth in some of the prestige suburbs around the river, particularly Kangaroo Point and Chelmer,” Ms. Conisbee said. “Many of the top sales are very expensive apartments in New Farm and Kangaroo Point, between A$4 million to A$6 million, showing there is a demand for luxury city apartments in Brisbane.”
World-Class City
Demand for luxury lifestyle apartments follows Brisbane’s transformation from sleepy country town to thriving world-class city. The city’s transformation incorporates a burgeoning restaurant scene, numerous high-end hotel openings and billion-dollar upgrades to public areas such as Howard Street Wharf.
The attributes are all playing their part in attracting more tourists—the number of overnight domestic visitors grew by 8.2% last financial year, with international visitors up by 3.4%—as well as genuine buyer interest.
“Brisbane is becoming the best place to live in Australia,” Mr. Lancashire said. “We’re seeing extraordinary investment in infrastructure, and it will take one global company to headquarter here and others will follow.”
“Interstate and overseas buyers equated to about 30% of my buyers this year, and I expect that to only increase next year,” he added.
Mr. Lancashire forecasts 40% to 50% of his buyer interest to come from outside of Queensland in 2020, as entire house prices in Brisbane are about the same as a deposit in Sydney, Melbourne and other high-priced overseas cities.
CoreLogic RPData head of research Tim Lawless agreed Brisbane’s relative affordability compared to its more expensive southern capital cities of Sydney and Melbourne was a contributing factor to its appeal.
He said after a long period of decline that Australia’s dwelling values had increased 4.7% from June through to the end of November, a rebound largely driven by Sydney and Melbourne, where values have recovered by more than 8% since bottoming out in May.
Based on the trajectory of growth, Mr. Lawless said: “housing affordability is once again worsening and the value gap between the capital cities is widening as Sydney and Melbourne values appreciate faster relative to the other capitals.”
At the end of November, CoreLogic figures indicated Brisbane’s median house value— which has fallen 0.5% in the past year to A$543,992—is 75% cheaper when compared to Sydney’s median house value of A$956,249, which has increased 2.1% over the same period.
Outlook
This year, Brisbane made its debut at No. 14 on the Knight Frank Prime Global Index in the first half of 2019.
The index, which tracks the moment in prime residential prices (the top 5% of the housing market in most cities by value), reported Brisbane’s prestige market jumped 3.2% in the year to May.
Although the growth rate slowed to 2% in the six months to November, Knight Frank’s Australian head of residential research Michelle Ciesielski had expected continued positive growth given Brisbane’s relative value compared to other east coast cities.
“Brisbane prime properties have been popular with families migrating from Sydney and Melbourne, as well as local downsizers looking for properties with low or no maintenance and a high standard of amenities to enjoy,” she said.
But not all high-net-worth individuals are coming from overseas, with plenty of localized interest placing pressure on the already scant levels of high-end, luxury housing stock.
Place Estate agent Heath Williams received three offers on a Nestor Avenue, Bardon property, which sold for A$7.85 million on Dec. 18.
Designed by acclaimed Brisbane architect Shaun Lockyer on more than 4,000 square meters of land less than 7 kilometers from the central business district, the property sold for almost twice the price of Bardon’s previous highest sale.
“I think I’ve sold about A$22million worth of property in the final quarter of 2019,” Mr. Williams said.
“These are people who wanted an acreage lifestyle but didn’t want to leave the city,” Mr. Williams said. “There’s definitely confidence there, the successful purchaser recognized they had to pay what was necessary to secure the house, but they weren’t the only ones who made a genuine offer.”
Having returned to Brisbane after six years in Sydney and Dubai, Mr. Williams noticed a distinct change to the city but felt it was still overshadowed by Sydney and Melbourne on a world stage.
“Brisbane has changed so much, I feel like every week there’s a new restaurant or bar opening,” he said.
“A lot of people who are looking at high-end property are coming for work commitments and there’s plenty of opportunities. Brisbane is fantastic, and as locals we love it, but on a world stage, the default is still Sydney or Melbourne.”
Source: www.mansionglobal.com