Brisbane Dwelling Prices Outpace Melbourne Amid Pandemic-Driven Migration Surge

[ad_1]

This change reflects Brisbane’s newfound competitiveness and challenges its previous perception as the ‘poor cousin’ to southern capitals.

Surging interstate migration has propelled Brisbane’s average dwelling price above Melbourne’s, marking a significant shift from its previous reputation as a “poor cousin” to the southern capitals.

Since the onset of the pandemic in March 2020, the average dwelling price in Brisbane has surged by 50.2 percent from $500,000 to around $787,000, surpassing Melbourne’s average for the first time since July 2009 by $7,000.

During the same period, Melbourne had the smallest increase among Australian capital cities, at just 11 percent, bringing the average dwelling price to around $780,000.

CoreLogic Head of Research Eliza Owens said lifestyle factors influenced the diverse capital growth outcomes, with southeast Queensland becoming more attractive during the pandemic.

She explained that increased remote work has resulted in population growth, heightened housing demand, and decreased supply in Brisbane, turning it into a seller’s market. 

“With remote work, all of a sudden you have these high-income professionals that can work from anywhere,” she said. 

Related Stories

Rental Market Under Pressure in Brisbane, Australia After Lockdown-Driven Migration
Brisbane Flooding Will Hit Property Prices but Difficult to Predict Long-Term: Experts

“The normalisation of remote work for many professionals made interstate migration to Queensland more feasible, while Melbourne’s extended lockdowns from March 2020 through to October 2021 may have prompted people to leave the city.”

ABS migration data reflected this, showing a record-high net interstate migration to Queensland at 51,500 in the year to March 2022, while net interstate migration to Victoria was -20,000 during the same period.

Ms. Ownes mentioned that compared to Brisbane’s significant wave of interstate migration during the pandemic, the number of new dwellings planned for the state had not met the demand.

Melbourne Maintains Higher Prices

Despite recording a higher median dwelling value, Brisbane’s individual median house and unit values are still -$72,000 and -$49,000 below Melbourne’s median, respectively. 

“The reason for this is that Melbourne has a higher share of units as a portion of the dwelling market,” she said, noting units comprise 33.8 percent of Melbourne dwellings, compared to 25.6 percent of homes across Brisbane,” Ms. Owens said. 

“Because units are generally lower value than detached houses, a higher portion of units brings down the median dwelling across all houses and units,” in explaining the difference in average dwelling prices.

In the 2000s, dwelling values in Melbourne and Brisbane were similar until a surge in overseas migration to Victoria caused prices in Melbourne to rise significantly in comparison.

Now, Domain Chief of Research and Economics Nicola Powell said the upcoming Brisbane Olympics were a major driver in Queensland.

“It’s actually not the Games in itself—it’s the lead-up to the Games where you see all this activity,” she said. “You see strong levels of infrastructure spending that creates working opportunities, that creates housing demand and population growth.”

“And I think we’re in that period of time now when we’re seeing that impact.”

Real Estate Institute of Queensland Chief Executive Antonia Mercorella added the lifestyle advantages of Brisbane are now widely known.

“I think for a long time Brisbane has really been seen as the poor cousin,” she said. 

“But when you look at the transformation of our city over the past five years, Brisbane has started to become such a modern, vibrant city.”

“Arts and culture is really thriving, our restaurant scene has really taken off, and I think people around Australia are starting to take notice.”

Challenges for Brisbane to Maintain Momentum

Yet, Ms. Owens mentioned Brisbane is still dealing with challenges, and the state’s new rankings may be “tested” in the months ahead.

“At the moment, it looks like Brisbane is still steaming ahead while Melbourne is falling slightly—but this could be a tussle that goes on throughout 2024,” she said.

She pointed out Brisbane’s monthly growth in values has eased slightly, from 1.5 percent in October 2023 to 1.0 percent in December.

Moreover, she said people from the southern states are less inclined to move to Brisbane due to its low affordability.

“As home values in the city continue to rise, there is less claim to Brisbane being relatively affordable, and some prospective interstate movers may decide to remain in their city,” she said. 

Recent severe weather events like floods and cyclones have also added to the difficulties.

Queensland Premier Steven Miles reported that a remarkable 3.5 million instances of lightning occurred in recent storms, disrupting nearly 1,000 power lines.

“It took 80,000 work hours to get them reconnected, 120 kilometres of wires, 150 poles had to be replaced,” he said on Jan. 1. 

It comes after a tornado hit the Gold Coast on Christmas Day, followed by flash flooding in the Logan and Scenic Rim regions.

On that day, a 59-year-old woman died from severe head injuries after a tree struck her during the tornado in Helensvale on the Gold Coast.

Brisbane was also not the only city to “shift ranks” in December, with the median dwelling value in Perth inching above the median Hobart dwelling value in the month. 

Adelaide also surpassed the Hobart median earlier in 2023, making Hobart the second-lowest median across the capitals.

[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *