The Australian property market has witnessed a significant shift in recent years, with Brisbane emerging as a strong contender against Melbourne. 

In a surprising turn of events, Brisbane now boasts the third-highest median dwelling value among the capital cities, leaving Melbourne trailing behind. 

This article delves into the factors that have contributed to Brisbane’s rise and explores the implications for the market in the coming years.

Brisbane’s Rise in Median Dwelling Value

Composition of Housing Stock

While Brisbane’s median dwelling value has surpassed Melbourne’s, it is important to note that the median house and unit values in Brisbane still fall below Melbourne’s medians.

This disparity can be attributed to the composition of the housing stock in each city. Melbourne has a higher proportion of units compared to Brisbane, with units comprising 33.8% of Melbourne dwellings and 25.6% of Brisbane homes.

As units generally have lower values than detached houses, a higher concentration of units brings down the overall median dwelling value.

In the near future, this compositional difference may rebalance slightly. Building activity data from the Australian Bureau of Statistics (ABS) reveals that there were 1.4 units under construction for every house in Victoria, compared to 1.6 units for every house in Queensland as of June last year.

This suggests that Brisbane may experience a slightly higher concentration of unit stock in the coming years, which could impact the median dwelling value.

Brisbane’s Strong Growth Against Melbourne’s Mild Upswing

Since the onset of the pandemic in March 2020, Brisbane has experienced remarkable growth in dwelling values, rising by 50.2% by the end of last year.

In stark contrast, Melbourne’s values only increased by 11.0% during the same period, making it the weakest performing capital city market. This significant disparity in growth has led to Brisbane’s median dwelling value surpassing Melbourne’s.

The lifestyle factors and appeal of South East Queensland played a crucial role in Brisbane’s growth during the pandemic.

The widespread adoption of remote work made interstate migration to Queensland more feasible, while Melbourne’s extended lockdowns may have prompted people to seek greener pastures.

ABS migration data supports this notion, demonstrating a record high of 51,500 net interstate migrants to Queensland in the year to March 2022, compared to -20,000 net interstate migrants to Victoria.

Value falls in Melbourne were further exacerbated by the loss of overseas migration due to COVID-19.

However, net overseas migration turned positive in 2022, potentially impacting Melbourne’s housing market.

Additionally, regional population data from the ABS reveals that Brisbane’s population grew at a rate of 2.3% in the year to June 2022, more than double the growth rate of Melbourne (1.1%).

While Melbourne still has a higher estimated resident population than Brisbane, these migration trends indicate a shifting preference towards Queensland.

The Outlook for Market Rankings

Brisbane’s rise in median dwelling value is not an isolated phenomenon. Other cities have also experienced shifts in their rankings.

Perth’s median dwelling value surpassed Hobart’s in December, while Adelaide overtook Hobart earlier in 2023. This leaves Hobart with the second-lowest median value among the capital cities.

However, the rankings of these cities may be tested in the months ahead.

Although Brisbane remains a seller’s market, the pace of monthly growth in values has slightly eased from 1.5% in October 2023 to 1.0% in December. 

As home values continue to rise, Brisbane’s claim to being relatively affordable diminishes, potentially impacting the influx of interstate movers.

Discover Your Next Opportunity with Ray White Inner Brisbane

Brisbane’s real estate market is on the rise, making it a great choice for buyers and investors. With its increasing property values and promising future, now is an exciting time to be part of this growing market. 

Ray White Inner Brisbane is ready to help you find your perfect opportunity in this vibrant city. Whether you’re looking to buy a home or invest in property, Brisbane’s market is waiting for you.

And for those curious about what the future holds, be sure to check out our blog for our 2024 predictions for the Australian housing markets.