A landmark, joint study by Aussie Home Loans and CoreLogic has revealed Brisbane house values have risen at an annualised rate of 5.9 per cent or $16,300 since 1993.
At the same rate of growth over the next 25 years, Brisbane’s median house value could rise from today’s $535,300 to reach $2,238,000 in 2043.
The Aussie/CoreLogic ’25 years of housing trends’ report found that since 1993, the typical Brisbane apartment value increased at the annualised rate of $10,300 or 4.5 per cent, with the median value now $385,000. In 25 years, the median unit value in Brisbane could be $1,153,000.
Chief Executive Officer of Aussie, Mr James Symond, said “Our report reveals that Brisbane and Adelaide are the capital cities where residential property values have shown the least amount of growth. This result has been mostly driven by softer conditions since 2010.
“Despite this, I still expect Brisbane to perform well over the long term, given between 2001 and 2004 Brisbane house values rose at more than 10% per annum, so it’s definitely got it in it for strong growth, particularly as demand rises due to population growth.”
Interestingly, the percentage of annual household income required to service a loan in Brisbane – at an 80 per cent loan to value ratio – has risen from 23.2 per cent to 31.9 per cent since 2001.
Mr Symond said “With average mortgage rates currently close to their record low levels of the 1960’s, loan serviceability levels have improved in recent years despite the value growth recorded across Brisbane.
“However housing affordability remains an issue for people in Brisbane, largely driven by housing price growth across the city over time. Buyers in Brisbane now need to dedicate 119.5 per cent of their annual gross household income to raise a 20 per cent deposit, with property worth 6 times annual household incomes; up from 3.7 in 2001,” he added.
Perhaps the greatest change we are seeing is Brisbane’s growth in higher density housing, with the share of apartment sales to all residential property sales growing from 19.4 per cent to 30.2 per cent over the past 25 years.
“I expect this trend to continue as apartment living grows in popularity across Brisbane, where a larger proportion of the population will choose to live closer to the CBD and transport corridors,” said Mr Symond.
Bulimba has experienced extraordinary growth in its median house value from $133,000 to $1.30 million, followed by New Farm which lifted its median value from $181,100 to $1.73 million since 1993.
Mr Symond said “It’s not a big surprise that attractive suburbs with strong demand from buyers dominate the top 20. Our report clearly shows that housing continues to grow as Australia’s largest asset class,” he added.
Detached houses have been the primary drivers of the market, with the Top 20 listing featuring no suburbs dominated by apartments.
To view the full Aussie/CoreLogic 25 years of housing trends report, visit www.aussie.com.au/25years or contact an Aussie Broker for a free copy.