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Three big things happening in Brisbane | Property market in 2020?

How has covid affected property prices in Brisbane?
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We nearly at the end of 2020 and this year seems to have thrown everything at us – from fires to floods, and fevers.

And while the Government, and Reserve Bank have been quick to act with rapid reductions in interest rates and massive stimulus policies, how is Coronavirus (COVID-19) affecting the market?

And where do we forecast the Brisbane property market to go in 2020? And what about Brisbane property prices in 2021?


1. Property Market Crash

Earlier this year property commentators, including AMP’s Chief Economist Shane Oliver were saying house prices across Australia could plummet by 20%, other banks like CBA agreed that 5-7% declines in Brisbane could be possible in the short term.

The reality is Australia’s property market moves in cycles, from peak to trough and Australia’s largest market Sydney has seen over 80% growth over the past few years (and much more over the past 20 years).

While we have seen values in Sydney come off by 5.6% from their peak in July 2017 this is nothing new.

sydney historic propety market trends

In the GFC we saw Sydney dwelling values fall 7% over 12 months, and after the Sydney Olympics between 2003 to 2006 we saw a reduction in values of 7.1% over the same time period. In fact, the falls we have seen over the last 12 months have been mild compared to previous downturns.

It has been a similar story in Brisbane, where there have been four recent periods of decline, the largest of which between 2010 and 2012 saw values fall by -10.6% from their peak.

Brisban Property Market 2020 PeaktoTroughDeclinesBrisbane

Is the Property Market in Brisbane going to follow the sharemarket?

The share market has been insanely volatile this year, and depending on global events as we get to the end of 2020 could continue to be fairly erratic.

If you are like me you’ve seen your super balances nosedive with the ASX from 7,160 20th February to as low as 4546 23 March 2020 – a 36% drop in value in just over a month – so is property likely to follow?

The worst year for house values in Australia was 1931 where some values dropped by 18%.

Looking back in history, it is clear that residential property has performed relatively well at times of negative economic shocks.

brisbane property coronavirus

Given the fact lenders are offering to defer mortgage payments (for 6 months) to reduce forced selling, and if price falls do become significant UBS are saying they “would expect further government support” towards assisting the property market.

AMP Capital chief economist Shane Oliver has predicted that unemployment will likely shoot up to about 10 per cent and this could result in a 20 per cent drop in Melbourne and Sydney house prices, he believes:

  • In the best-case scenario, capital cities could see house price declines of about 5 per cent.
  • In the worst-case scenario, prices could fall about 20 per cent or more, he said.

He also said, “The bottom line is that while we may see the biggest hit to global and Australian GDP since the 1930s thanks to the shutdowns, there are big differences compared to the Depression suggesting that a long drawn out global downturn is not inevitable.”

“Basically, it’s a disruption to normal activity caused by the need to stay at home. In fact, growth could rebound quickly once the virus is under control and policy stimulus impacts.“

So while there could be drops, the market could equally rebound just as quick.

Remember that property is a long term investment, and it is not going to be the right investment for you if you are looking at selling in the short term.


Not all property markets are the same

I think it’s important to remember that Australia doesn’t have one single property market. Each state, each city, each area has its own stage within the property cycle.

brisbane property values covid 19

Potential for a rising property market in Brisbane is also supported by a recent analysis by BIS Oxford Economics.

They are saying Brisbane property prices could surge as much as 20% over the next 3 years as economic growth and affordability become factors that slow down Sydney and Melbourne.

brisbane property market 2020

Brisbane’s population is growing faster than the 10-year average, at about 23,000 new residents per year.

Brisbane Property Market Population Growth

Brisbane’s population growth: Source Michael Matusik and ABS Census

And according to Property Researcher Michael Matusik, there is a need to build about 8,825 new dwellings to meet this demand.


Days on Market has become a key indicator in 2020

Brisbane house prices are massively affected by supply and demand, and the simplest indicator of this is the days on market.

Days on market tells how long it took to sell a property, calculated as the days from the date the property was initially listed until the date it was sold.

In a hot market, there are lots of buyers and properties sell quicker so days on market is a good indicator of demand relative to supply.

brisbane property market forecast 2021

As you can see from the chart above, days on market in Brisbane has taken a very steep nosedive from July 2020 onwards as more people are feeling optimistic post COVID, and looking to buy a home.

This is backed up by data from CoreLogic, according to Eliza Owen:

Dwellings across Brisbane have typically taken 45 days to sell over the three months to September 2020. The median selling time has trended down from 46 days in the three months to July, and suggests demand is slowly climbing across the market. 

With rising consumer sentiment, it looks like house prices in Brisbane will continue to be strong throughout 2020.


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2. Brisbane’s time to shine

Brisbane’s property market has been slow and steady, with dwelling prices rising 1.1% for the 3 months to December, or 0.4% per month according to Tim Lawless of CoreLogic.

The property market in Brisbane is set for a strong start in 2020 thanks to a few major projects like Queens Wharf (aka the new casino), Howard Smith Wharves and very strong housing affordability compared to Sydney and Melbourne.

howard smith wharf brisbane

Brisbane’s Howard Smith Wharf, located near the Story Bridge in New Farm is one of the big projects planned for Brisbane in 2020.

Brisbane’s property market is much more affordable than Sydney and Melbourne, according to research by Michael Matusik the current price to income ratio required to buy in Brisbane is 5.3 times at a median house price of $524,000.

Compare this to Sydney at 10.80 times income, and Melbourne at 8.40 times income with a median house price of $829,000. 

Brisbane housing affordability matusik (1)

Brisbane property market is much more affordable than Sydney and Melbourne.

Even at Hunter Galloway, we are noticing an uptick in interstate enquiries from people who are migrating from Sydney to Brisbane so we think this is a space to watch.


3. Our suburbs in Brisbane to watch in 2020

Many property commentators are reporting Greenslopes, around 5km south-east of Brisbane to be a suburb to watch in 2020.

Being close to the city, a median house price of $720,000 and great access to public transport it could be a suburb to watch as the year plays out.

Based on our tips on how to best research property in Brisbane (using these free tools), it would also be worth watching the following suburbs in 2020.

12-Month Growth
Median Price
Average Annual Growth
Property Type
3-Year Growth
5-Year Growth
Weekly Median Advertised Rent
Gross Rental Yield
Ferny Hills

Read More: 3 Signs Brisbane’s housing market is ‘on the up’ 🔥🔥🔥

4. Four Areas set for growth due to School catchments

While it might not be high on your radar if you are buying an investment, properties in good school catchments across Brisbane have historically given much better capital growth than those in other areas.

With some real estate agents reporting demand for properties in School Catchment areas increasing by over 30% in the past 12 months, is buying in a school catchment area a good option?

In our experience, some buyers are more willing to invest in their family than pay for private school fees, and according to some Real Estate agents we have spoken to, buyers are willing to pay up to $100,000 or around 10% more for a property in the Brisbane State High School catchment area.

big-brisbane property school catchment 2019

So which are the suburbs to watch? 

The top-ranked public high schools in Brisbane in 2018 (and most likely set to continue to 2020) according to Better Education are:

  • Brisbane State High School
    • Suburbs: South Brisbane, Highgate Hill, West End, Dutton Park and some parts of Woolloongabba.
  • Mansfield State High School
    • Suburbs: Mansfield, Wishart, MacKenzie and some parts of Burbank.
  • Indooroopilly State High School
    • Suburbs: Indooroopilly, Toowong, Taringa, St Lucia, Auchenflower and some parts of Chelmer.
  • Cavendish Road State High School
    • Suburbs: Holland Par and some parts of Coorparoo.
  • Mount Gravatt State High School
    • Suburbs: Mount Gravatt and Mount Gravatt East.

How do you know if your property in Brisbane is within these schools catchment areas?

You can use the Queensland Government School Catchment Map here.


5. Stricter lending criteria

While the Royal Commission has put more focus on the banks and their lending practices it certainly hasn’t stopped them from lending.

After the Royal Commission finished in 2019, we have found the lenders have slightly relaxed home loan lending rules pathing the way to make it a little easier to access mortgages into 2020.


What are the secrets to getting your loan approved in 2020? 

#1. Consider a different bank 

Different lenders have different policies, and some simple things can make a massive impact including the amount they lend you.

Consider a single person on $50,000 per year looking to buy their first home.

home loan borrowing capacity 2019

There is a $67,000 different in how much the banks will lend… For this person earning $50,000 that is almost 1.4 years worth of salary difference! 

So it does pay to look around and see what your options are.

#2. Reduce your interest costs with principal and interest repayments

2020 has seen a massive differential between interest-only and principal and interest repayments – in some cases upwards of 1%.

So how can you get lower interest costs? Check out P&I repayments.

According to Macquarie Bank, “using a 0.5 percentage point [interest rate] differential, Macquarie found that a bank customer in the top tax bracket with a $500,000 loan would be $6,000 better off after five years, and $12,000 better off after 10 years switching to P&I.”

#3. Review your interest rate 

With the RBA dropping its cash rate twice in 2019 interest costs have come down considerably, making property in Brisbane much more affordable.

As you can see from this data, each interest rate cut can give annual savings of between $1,317 on a loan of $250,000 all the way up to $5,267 in annual savings on a loan of $1,000,000 or more.

brisbane property market rates

It is worth speaking with your mortgage broker in Brisbane if you have an existing loan to see if you can reduce your annual interest costs today.

Read More: Home Loan Guide to Brisbane

6. Brisbane’s riskier suburbs in 2020

While we have found the banks lending criteria is a bit more relaxed in 2020, if you are looking at buying a unit in Brisbane you might be asked for a 30% deposit by some banks.

(Don’t worry this is not ALL banks)

We have found some banks have created a bit of a blacklist on certain suburbs in Brisbane, where they have applied stricter criteria to loans, could reduce rental income and may ask for more deposit.

Brisbane’s so called ‘riskier suburbs’ include units in:

  • Milton (4064)
  • Brisbane CBD (4000)
  • Fortitude Valley, Herston, Bowen Hills, Newstead (4006)
  • Kangaroo Point, East Brisbane (4069)
  • Woolloongabba, Brisbane, Dutton Park (4102)

As I mentioned some banks are completely fine with lending in these suburbs, it’s just a matter of working with a Mortgage Broker that understands the different credit policies and can help achieve your goals.

While some banks might try to charge you lenders mortgage insurance if you don’t have a 30% deposit, we have access to banks who do not – and can look at interest-only terms.

If you need help with navigating the changing landscape, get in touch with our team or give us a call on 1300 088 065 to discuss your situation.

brisbane riskier suburbs

These suburbs are only ‘riskier’ if you need a loan with a 10% or less deposit. More importantly not all banks find these suburbs risky, so you still have options if you are looking at buying with a 10-20% deposit.


Bonus: Which Brisbane Suburbs Lost & Made Money in 2020

It’s not all blue skies for property, and house prices in Brisbane can go down.

Corelogic has released their latest Pain and Gain report where they analyse who made money and lost money on property resales in Brisbane.

brisbane property prices

Units were the biggest loss-makers in Brisbane, with 43% of units selling at a loss compared to 6.4% of houses that sold at a loss.

Data from the report showed its not timing, but time in the market that will make a profit in real estate.

The typical sales period for loss-making at 6.2 years compared to profitable sales in Brisbane that had a median hold period of 10.6 years.

brisbane property market forecast 2020

The most profitable suburbs in Brisbane are in the Moreton Bay Region.

This includes suburbs like Strathpine, Albany Creek & Beachmere where the data showed over 90% of resales sold for more than the previous sale price, taking a median profit of $130,000! 


Bonus: Changes to the flight path

When you’re buying in Brisbane most people know to check if the property has flooded, and get an RP Data valuation to make sure you’re paying the right price but do you know you should also check the flight paths…?

The Brisbane Airport Corporation (BAC) has updated its guide to Current and Future Flight Paths – and how the noise might affect your property.

The most important part of the report is on page 33 and 34: detailing the noise contour map, and includes which suburbs are going to be most affected by the increase in aircraft traffic.

It’s hard to say how this will affect property values in this area over the next 20 years, but is worth keeping in mind if you are buying a house – you might want to negotiate some double glazed windows into the contract!

brisbane property market flight path 2019

In the next 20 years, some of Brisbane’s most prestigious inner city suburbs will be much more affected by aircraft noise: including Ascot, Hamilton, Bulimia, Hawthorne, East Brisbane, Cannon Hill, New Farm and Seven Hills.

Download: Current and Future flight Path and Noise Information Booklet


Brisbane Flight Path Tool: See if your property is affected

Ok this is an added bonus that I just found, the Brisbane Airpot Corporation has just created a new flight path tool to see if your property is affected.

New Runway brisbane property

Try it now: Brisbane’s new runway flight path tool


That’s it for now

Overall the Australian property market is looking steady for 2020 and we’re looking forward to seeing you this year!

Mortgage Broker Brisbane

The Hunter Galloway Mortgage Broker Brisbane team looks forward to seeing you in 2020!

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Approximately 40% of home loan applications were rejected in December 2018 based on a survey of 52,000 households completed by 'DigitalFinance Analytics DFA'. In 2017 to 2018 Hunter Galloway submitted 342 home loan applications and had 8 applications rejected, giving a 2.33% rejection rate.
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