0:02: Hi everyone, and welcome to another episode of the Rhythm of Property podcast with Scott and Linda Jannison, and it's market update time. 0:08: It sure is, and that means we are going to provide you with a summary of what we've been seeing out and about over the last 4 weeks throughout July, but more importantly, we're going to provide an overview of what the data is also telling us so that we can give you a better understanding. 0:23: of, what's actually happening, what direction the market's moving, why it's moving that way, and give you some insights into what we're seeing as buyer's agents across Brisbane as well. 0:32: So what we're actually seeing is, Brisbane's still performing really well, up here and, you know, winter time. 0:39: And everyone thinks that things slow down in Brisbane, but it's, it doesn't slow down, that's for sure, because we're we're seeing lots of people out and about with obviously the demand side of property is really strong, and obviously we're seeing that in the, in the data as well. 0:51: Yeah, and let's not forget, towards the end of June and early July, we've got school holidays, and that does sometimes cause a slowdown in terms of the number of listings that become available for sale. 1:00: And we certainly saw that again in terms of listing. 1:03: Volumes throughout July, they did actually fall slightly compared to June, and that's, a seasonal effect, I guess you can say when we do see those school holidays come into play. 1:13: Sellers really don't want to be exposing their property to the market when some buyers are not going to be here to, to participate in market activity. 1:22: So, typically they'll hold off and they'll list after the completion of school holidays. 1:26: But, Yet again, Brisbane dwelling values have actually, moved ahead over the month of July, and that's what we're gonna cover throughout today's episode. 1:35: I do wanna throw a quick hello in too. 1:38: a, a client of ours that I spoke to on the weekend, Dev, I just wanna reach out and say hello. 1:43: Thanks for the, it was lovely to have a chat on the weekend and I'm glad you still love listening to us on the podcast. 1:49: So, hey, Dev, I hope you're doing well, and, we'll talk, we'll be in touch. 1:53: So quick hello there, but. 1:54: Yeah, some of the data, Melinda, obviously we'll, we'll jump into some numbers a little bit later on, but we obviously dwellings increased, 0.7% in July, so maintaining some really strong growth, same as, as June, and that's obviously in the quarter's gone up, a rise of 2.3%, up from 2%. 2:14: In the previous month, an annual gain of 7.3%. Yeah, just to unpack that, there's a lot of numbers in there. 2:20: Basically, Brisbane continues to be amongst the top performing capital city markets throughout all of Australia. 2:27: So we are second in our growth rates at the moment only to Perth and Darwin. 2:33: actually, That makes us 3rd. 2:34: Sorry, I can't even count. 2:36: that's on a monthly basis, but over a 12 month period, Brisbane's market remains one of the strongest, continuing to outpace Sydney and Melbourne, but now also Adelaide. 2:46: So it is interesting, this is all according to totality data, and we're going to unpack more about the housing market and the unit market in today's episode. 2:53: And, and you've got some interesting trends there, like the unit markets or again as we talked, units, 1.1% in July, up from 1% in June, 3.2% over the quarter. 3:04: , an annual growth of, of 10.6%. So again, as we've talked about it for so many episodes now, the unit market is really performing well and continues to do so. 3:15: And this is despite the national headlines and the national trend being the complete opposite. 3:20: And what I mean by that is nationally, looking at national data and many other capital city markets, it's not the unit market that is outperforming the house market. 3:29: It's the opposite. 3:30: Here in Brisbane, units are outperforming. 3:32: Whether you're looking at monthly, quarterly or annual data, units are growing at a faster rate. 3:37: However, in most other capital city markets, and certainly at a national level, it's the opposite. 3:42: It's the houses that are outperforming. 3:44: So this is another reason why it's really important to understand local market drivers and local market dynamics before making assumptions. 3:52: If you're living in Sydney or Melbourne, perhaps, and you're seeing that the unit market is underperforming, do not assume that's happening here in Brisbane because we are a different property market with different drivers of supply and demand. 4:03: Very, very different, and and obviously affordability and low maintenance. 4:09: I think they come into play because you can, you can get in closer towards the city and you get, get those units. 4:15: and as we say, affordability and low maintenance is something that people are really looking for. 4:18: Yeah, that's right. 4:19: And that's shown. 4:20: In the price segmentation data, which we will, will run through later in this episode. 4:24: So the lowest 25% of property values are still growing at a faster rate of growth than the middle segment of the market or the top end of the market. 4:32: But remember, a lot of, first home buyers are in the, the more affordable segment of the market. 4:37: We've also got a lot of investors that are buying investment properties at the lower end of the market, and this obviously shifts the demand. 4:45: Also in Brisbane, because we do have the, stronger performance in the unit and townhouse segment of the market, that also has a shift on total dwelling, values when we look at price segmentation, because a lot of those units and townhouses do fall in the bottom 25% of property value. 5:03: So it's must, it must be sort of, I guess, interpreted in, in a way that makes sense, and, and that's what we try to do. 5:11: Each month in our podcast updates. 5:12: It's interesting the next part when when we've got here about days on market, and how it's an overall increase from 16 days to 25 days, like a year ago 25 days. 5:24: Whereas the unit market we're really seeing in that lower price point, those properties are actually transacting very, very, very fast. 5:32: It's not unusual for some of those properties and I know some people, In other, in other markets might sort of look and go, really, they can't believe it that a property can be listed literally on a, say, a Thursday and it's sold Saturday afternoon. 5:45: Yeah. 5:46: They're the sort of property, it's, it's not unusual at all in that price point that they're selling that fast. 5:51: And I think that's why it's important when we are talking about the data, this is all of Greater Brisbane. 5:56: So, you know, what might be happening in a unit in, in Wilston or a unit in Coorparoo might be very different to what might be. 6:03: Happening for, a house that, that is at Caboolture or a house that might be at, Logan Central. 6:11: It is so important that, we understand that, because the days on market also for high-end premium homes is actually a lot longer as well, because there's fewer buyers in that segment of the market. 6:23: Does it mean that people can't afford to buy them? 6:25: No, it means that buyers are getting more selective about what they're prepared to put their money towards. 6:30: And this obviously causes a slowdown in decision making as well. 6:34: People do want, things that are already completed. 6:37: They don't want to have to do building work, and this slows down the decision-making process. 6:41: So that days on market number, whilst it has trended, upward compared to what it was 12 months ago, it doesn't necessarily mean that all segments of the market are actually slowing down. 6:53: And we've seen interest rate, interest, sorry, clearance rates. 6:57: , increase and, and starting to trend upwards as well. 7:01: so obviously that's, that's increasing that competitive market. 7:04: Yeah, and that can sometimes be a leading indicator of further price appreciation in the coming months. 7:10: it can be interpreted by some as rising buyer demand. 7:15: we always say that it's also an indication of seller sentiment. 7:19: So when See the, clearance rates start to rise, it can indicate that more sellers are willing to meet the market at a price point that buyers are prepared to pay. 7:27: So it has been an interesting trend that we've observed, and July was definitely up on, on the months prior in terms of the clearance rates. 7:35: It'll be interesting to see the changes in the, in the interest rates to see what happens there. 7:42: as we talked about with school holidays, has an effect on the market. 7:45: Everyone has historically talked about the spring selling season. 7:48: , but it'll be interesting to see what happens with, the changes in interest rates. 7:52: And of course, interest rates this week, due to be released at the time of recording, not yet released. 7:58: So, we expect interest rates will be cut in August, and that's potentially going to cause a little bit, more borrowing capacity for those that are in the market. 8:10: But potentially it can also cause people who have been on the sidelines to get into the market and get ready to buy. 8:16: So it can have an impact on, on the demand side of things, which obviously, when you're already in a market that has strong demand, that can push prices up in the absence of a supply increase. 8:26: I know I talked about auction clearance rates earlier, and, and I know we've talked about this before, but sometimes this can really be a and influenced by the seller's expectations. 8:36: That's right, yes, absolutely. 8:37: And, and we've mentioned that before. 8:40: If sellers are willing to meet the market, obviously we know that, you know, there's more agreement between buyer and seller and those clearance rates can increase as a result. 8:49: Housing supply, big big thing obviously when we talk about demand and having enough properties to buy. 8:54: , obviously that housing supply, we still seem to be below what we're the target market. 9:00: Yeah, so the latest housing accord updates, have highlighted significant underperformance across all of Australia, but here in Queensland alone,, so far we're 29.4% behind our cumulative completion targets, so it really does emphasize the fact that we do have an acute supply shortage. 9:21: Not only are listing volumes much lower than they have been historically long term. 9:27: But also the delivery of housing is behind schedule, and we're not meeting the targets that we need to be meeting to keep up with our growing population. 9:37: So, big concerns on the supply side of things into the future. 9:41: And you'll add to that obviously the construction costs. 9:45: historically, obviously they've they've remained fairly steady, obviously through through June, up to now with a slight uptick, but again, we've seen, we're still seeing that growth in the cost of, construction. 9:57: And I think that will still put a lot of pressure on that, supply side of things. 10:01: Yeah, look, it's slowed down more recently, but let's not forget the huge, huge, huge price increases that we had in the construction, construction sector off the back of COVID. 10:09: So, yes, there's been a small uptick again in the last quarter, but, annual increases in the construction sector have now stabilized at 2.9% annually, so that's much better than where we were a few years ago. 10:22: We did touch on the on the interest rates, and as, as you did say, it's coming out this week, so not out on the on the time that we're recording this, but, when this podcast comes out, we, we'll know actually what's happening on that side of things. 10:36: So that will be interesting to see. 10:38: obviously the, the supply side of it, that will be interesting to see what happens there. 10:42: hopefully construction costs will soften a little bit. 10:44: , yeah, it's definitely, definitely tight, and, and listings are low as well. 10:49: Yeah, that's right. 10:49: And, you know, the reason that we do expect interest rates are likely to be cut is that, the inflation figures have showed that they are continuing to slow. 10:59: We're sitting at 2.1% annually there. 11:02: but at the same time, consumer confidence, has edged up a little bit. 11:07: So, that's actually a little bit more positive for those. 11:11: looking to buy a home, because that also can be an indicator of demand when it comes to assessing that, that demand rate in property buying. 11:20: So the confidence, that'll obviously have an effect then on the, the confidence for, for buyers to be in the market. 11:25: Yeah, that's right. 11:25: So, you know, that said, you know, we really need to be monitoring, not just these, these things that measure consumer sentiment, but when you're turning up to an open home and you're seeing, you know, how people are reacting and how the FOMO might Be playing out and how many people are actually lining up. 11:40: That, that's real-time consumer sentiment, in my opinion, and that's much more relevant for the product type and the locations that you're buying across any city. 11:48: So, I think being out and about on the ground is going to trump any data that you might have access to in terms of, you know, what's actually happening and what is the sentiment like out there. 11:58: Because you can see it, you can feel it, you can hear it in the conversations that people are having when they're attending open homes and auctions. 12:05: Obviously there's, you know, when people talk about time to buy and things like that and, and sentiment of people, it, it is interesting when you talk to people as well, and I think the more people we do talk to realize that, you know, the market has moved quite a lot, and yet they, I think everyone is still expecting it to continue to grow, and to move in that direction as well. 12:26: So I think people are, people are realizing that and they want to get into the market as well. 12:30: That's right. 12:31: So if we just sort of run through some of the data from totality for the month of July, starting with dwelling values, remembering dwellings will combine all property data. 12:40: These are usually the headline reports that come out, at the beginning of each month, stating what direction each market has moved in terms of house prices, but dwellings will incorporate both houses, units and townhouses. 12:51: So,, here in Brisbane across the month of July, 0.7% price growth, for the month, 2.3% for the quarter, and that puts annual growth for all dwellings at 7.3%. And the median price for all dwellings at $934,623. 13:09: And we talked a lot about the, price segmentation a little earlier. 13:13: So right now, the lowest 25% of property values here in Brisbane have shown. 13:18: 2.7% quarterly growth up to the end of June, whereas the top 25% of property values have only moved 1.7% across the same period of time, with the middle segment of the market somewhere in between at 2% growth. 13:31: So again, that more affordable segment of the market, which does actually comprise more of that unit and townhouse, type of product, that's actually growing at a faster rate when we're grouping all dwellings together. 13:43: And prop track. 13:45: Recorded a 0.44 gain in July as well. 13:48: That's for dwellings. 13:49: 0.44% gain. 13:50: Correct. 13:51: Yes, that's right. 13:52: And look, there's differences in methodologies. 13:54: We've talked about this previously in our podcast, and that does account for some of the variation, but, the, the trend is the same in that property values are still increasing month on month. 14:04: So we'll break it down into house and units. 14:07: So house values have increased 0.7% in July, identical to June's growth rate. 14:14: Median house prices in Brisbane reached 119. 14:20: $85. 14:22: Yeah, that's right. 14:23: So, you know, quarterly growth in houses, 2.1%, annual growth in houses, 6.7%. So, a, a really big change, and when we run through the unit values, you'll see how much, higher the unit market has outperformed the housing market, Because that is really relevant. 14:41: we do have the same positive price growth trend from the Prop track data. 14:47: Also, it shows that, houses increased 0.44% during July. 14:52: So again, that's, a re-acceleration in terms of price growth compared to June. 14:57: , and that's something that is important to understand. 15:00: We're not slowing down. 15:02: The rate of growth is picking up again, although very moderately, there's definitely been an uptick again throughout July. 15:09: And unit market, as we've talked about so many times now, the unit market really a standout performer, recording a 1.1% gain in July. 15:17: So that's an improvement from June's 1%. 15:20: So the median unit value now stands at 7,270,110 dollars. 15:26: Yeah, it's a lot of money for, a unit here in Brisbane, and, you know, only 4 or 5 years ago, you could still buy most units under $500,000. 15:34: So it has been a big shift in the market. 15:37: Remember, a lot of those first home buyer incentives do cut out at $700,000 as well. 15:41: So even units in some areas across Brisbane are now, becoming less affordable for those first. 15:47: Home buyers, especially those wanting to tap into the grants that are available. 15:53: when we look at the quarterly growth rate for units, 3.2%, remembering that the housing quarterly growth rate in Brisbane, 2.1%, and annually, units have, shifted 10.6% compared to the annual growth in the housing market at 6.7%. So really important to understand just how much, the unit market has outperformed the housing market here in Brisbane. 16:17: It is a shift, when you're looking at 10.6% versus 6.7% annual return, it's quite a significant, difference between the two markets. 16:26: Is this likely to continue? 16:27: Look, no one has a crystal ball and I'm not going to speculate. 16:32: however, we need to look at the supply, of, you know, potentially competing product in both the unit market and the housing market to understand whether we have the potential to, to, I guess, absorb. 16:47: The, the demand that is there, because at the moment, the demand is so much higher than the, the potential for supply, and that's why we're seeing that price escalation. 16:56: I'll also say that, you know, the cost to deliver housing, whether that's a, a single dwelling or a unit, or a townhouse in the current market, the price differential between existing and brand new is still so wide that we feel that there's still got to be further growth in the established market before we actually see a lot of new products coming through. 17:16: Si. 17:17: Because developers cannot build and sell, for the price that they need to sell for to, to lock in development margins and actually pay for the cost of the, the construction. 17:26: So we're in a very interesting era in Brisbane property, simply because of those underlying fundamentals. 17:33: If I just jump back quickly, Proprac, on units also had a, a rise of 0.45% in July as well, just so you know that. 17:42: the rental market, it's again, it sounds like a bit of a broken record sometimes, doesn't it, when you When you talk about it, it, it really, really tight vacancy rates holding at 0.9% for the second year, consecutive month. 17:54: Yeah. 17:54: What's interesting is that in the last few weeks, I have been doing some suburb level analysis on vacancy rates, and it is evident that in some areas of Brisbane, we're starting to see vacancy rates elevated above 3%. 18:07: So when we talk about The 0.9% vacancy rate citywide. 18:11: This is not everywhere, and it's so important that you're understanding what's happening in a local market. 18:15: That's the, the market you're buying into, especially if you are a property investor and you're wanting to ensure you've got that upward pressure on rents, but also to ensure that your property is going to be rented quickly, because you don't want to purchase an investment property. 18:29: That doesn't come with a tenant and then have it sitting on the rental market for several weeks without income. 18:35: So always check the vacancy rate at a local level to get an understanding of what's trending in that suburb, not just the overall Brisbane vacancy rate. 18:43: And house rents increased by 4.3%, up from 3.4% last month, or unit. 18:50: , unit rent rose 5.6%, up from 5.1% in June. 18:56: Just to clarify, those statistics are annual rates of change, not monthly rates of change. 19:02: I don't think anyone would expect rents to increase that much in a single month. 19:06: So, yes, over the last 12 months, rents in both segments of the market, have increased, and in fact, we're seeing month on month that that rental price growth is starting to re-accelerate. 19:17: That is, the rate of growth is increasing once again. 19:19: , so that's going to put some pressure on some tenants out there, you know, they, they may be looking to increase the household size, if, if they are struggling with rental repayments. 19:31: , gross rental yields fell slightly from last month, so 3.4% for houses, down from 3.5%, and remained steady for units at 4.5%. Gross rental yields. 19:43: Yeah, that's right. 19:44: And the reason for that is that the house prices are moving at a slightly faster rate than the house rents are moving. 19:50: And so the yields are what we call compressing. 19:52: They're getting a little bit lower. 19:54: whereas units, we're finding that unit rents are shifting at a speed that's relative to the pace of, unit prices, and that's why the yields are holding firm there. 20:04: So, remember these are gross yields and. 20:07: Investor that's considering an investment purchase should be looking at the net yields, which will account for the holding costs associated with holding different asset types. 20:15: So, that's something that our team help our clients with. 20:19: If you're unsure of how to do that, make sure you're getting some professional input. 20:22: Definitely. 20:23: So a bit of a summary. 20:24: Apart from units performing really well, nothing to rent, and rents going up, construction costs going up. 20:29: It feels like a broken record, doesn't it we're saying the same sort of thing over and over, but that, that's just the way it is. 20:35: we are seeing that that increase and we're seeing the numbers, as I said earlier, the amount of people that are going out, multiple offers, property selling really fast in in certain price points, obviously. 20:45: , but it is something we're still seeing, and that demand side of it is still very, very strong here in Brisbane. 20:51: And look, based on current fundamentals across the city, we do expect prices to continue to grow moderately, certainly not as, fast, or aggressively as we've seen in the last couple of years. 21:04: However, we also are starting to see that there's affordability pressures in some areas and for some types. 21:12: So it's so important that you've got a local lens of what is actually happening out and about on the ground. 21:18: You know, when we're turning up to some locations and there's, there's a lot of buyers that are lining up, versus other locations where there might be, a much smaller group of people inspecting properties, there's a reason for that, and we can use that information to help to educate our clients. 21:35: And I think if you are a property buyer in Bris You should be out and about, and you should be viewing this for yourself because it's going to take a couple of months for this to trickle through to the data, and therefore, you might be already behind the, the majority of people who are actively in the market and on the ground if you're gonna wait for the data to show any trends. 21:55: Perfect. 21:58: Thank you very much, and thanks for listening. 22:01: as usual, I will let Melinda wrap things up. 22:03: We've got More exciting episodes coming and guests, so keep an eye out, for what's coming up on the Brisbane Property Podcast. 22:10: As usual, I'll let Melinda wrap it up, and thanks very much for listening and bye for now. 22:15: Yes, thank you once again for joining us on the Brisbane Property Podcast. 22:18: We hope you have enjoyed this month's July property market update. 22:22: As always, If you have enjoyed our content, please share with friends and family. 22:25: We would love for you to leave us a review on your favorite podcast player as well. 22:29: It does help others to find our podcast and benefit from the information that we share as well. 22:35: as always, we look forward to speaking with you again next week. 22:38: And until then, bye for now.