Brisbane has been experiencing significant growth in recent years, despite the slowing impact of a global pandemic. As one of the fastest-growing cities in Australia, Brisbane has been attracting domestic and international attention due to its favourable climate, strong economy, and relatively affordable housing.
Although the global pandemic saw a decline in new or knock-down builds for a few years, the growth remained steady and directly impacted the residential building market. This growth has seen a country wide increase on New Builds due to Government Grants (COVID Home Builders Grants).
An area of impact has been in the city’s outer suburbs with the significant demand for house and land packages. These areas are popular with families due to their spaciousness, proximity to nature reserves and other recreational areas, and the availability of quality schools.
In this article, we will discuss the current state of play in Brisbane’s residential building market and explore the factors driving its growth.
Residential Building Opportunities Amid Global Challenges
While Brisbane’s residential building market has shown positive signs of growth over the last couple of years, there were also some challenges that developers and builders were facing.
The building industry was impacted by rising construction costs, particularly for materials such as timber and steel, and a need for more skilled workers. Due to these factors, there was a slight decline in building residential homes in the previous 6-12 months. With continued investment in infrastructure, steady population growth, and strong economic growth, the outlook for the city’s residential building market remains positive.
Expected Growth in the 2023 Market
Economists predict Brisbane will see substantial gains throughout 2023 and beyond due to the following reasons:
Moving Towards & Maintaining Strong Economic Growth
Brisbane has been experiencing robust economic growth in recent years. This strong economy has created jobs and increased disposable income, fueling demand for new housing developments. This strong economy has been bolstered by:
- Diversified economy: Brisbane has a diversified economy with solid foundations in sectors such as mining, tourism, agriculture, education, and technology. This diversification has helped maintain steady economic growth, as the city is not overly reliant on a single industry.
- Skilled workforce: With a highly skilled workforce, Brisbane attracts businesses and supports innovation. The city is home to several universities and research institutions, which provide a steady supply of skilled labour and contribute to developing cutting-edge industries.
- Business-friendly Environment: Brisbane offers a business-friendly environment with a supportive government, competitive tax rates, and an efficient regulatory framework. This encourages local and international businesses to invest in the city and contribute to its economic growth.
- Tourism: Brisbane’s appealing climate, natural attractions, and cultural events draw a significant number of tourists each year. Tourism is a major contributor to the city’s economy, creating jobs and generating revenue in various hospitality, transportation, and retail sectors.
The Ongoing Impact of Government Initiatives
The Queensland government has been actively promoting new housing developments in Brisbane through various policy initiatives, including infrastructure investment, zoning reforms, and financial incentives for first-time homebuyers.
Two of these initiatives are no longer active, but these efforts have stimulated the building market and attracted investment and growth in 2023:
- First Home Owners’ Grant (FHOG): To assist first-time homebuyers in purchasing or building a new home. The eligible applicant received a one-time payment of up to $15,000 to help with the cost of buying or building a new home.
- HomeBuilder Grant: This federal grant, introduced in response to the COVID-19 pandemic, aimed to stimulate the residential construction sector. Though it has ended, it offered eligible owner-occupiers (including first-home buyers) a grant of $25,000 to build a new home or substantially renovate an existing one.
- Regional Home Building Boost Grant: When it was active, it encouraged new home construction in regional Queensland. Although it has expired, it provided eligible applicants with a one-time payment of $5,000 to build a new home in regional areas.
Attracting Migration Due To Favourable Climate and Lifestyle
Brisbane’s warm climate, beautiful natural landscapes, and vibrant cultural scene have attracted people across Australia and worldwide. The city’s attractive lifestyle options have significantly driven population growth and, in turn, the demand for new housing developments.
In 2023, the building industry in Brisbane is benefiting from the city’s favourable climate and lifestyle in several ways:
- The attraction of New Residents: Brisbane’s warm climate, beautiful natural surroundings, and vibrant cultural scene attract people from across Australia and worldwide. The demand for housing stimulates growth in the building industry as more people choose to move to Brisbane for its lifestyle benefits.
- Outdoor Living Spaces: The warm climate encourages outdoor living, leading to a demand for residential properties with spacious backyards, outdoor entertainment areas, and swimming pools. This trend influences the building industry by promoting the construction of homes focusing on outdoor spaces and amenities, particularly in the suburbs.
- Eco-friendly Construction: The focus on climate and lifestyle has raised awareness about the importance of sustainable living. This has led to a growing demand for eco-friendly construction methods and materials in the building industry, such as energy-efficient designs, solar panels, and water-saving features.
Stabilisation of Inflation Rates
In recent years, high inflation rates have contributed to the rising cost of living. In 2023, it’s expected Australia’s reserve bank will maintain a more balanced approach to monetary policy, which will help stabilise inflation rates. This approach will help moderate the overall cost of living as prices for goods and services become more predictable and manageable.
Diverse Housing Options Due To Less Availability of Rental Properties
As the city grows, so does the demand for diverse housing options. The supply of rental properties has not kept up with the increasing demand, leading to a scarcity of available rental homes. This has resulted in higher rents and more competition among renters, making it difficult for many to find affordable housing.
As the demand for housing continues to outpace the supply of rental properties, more individuals opt to invest in new builds. The residential building market in Brisbane has been catering to various preferences, offering a mix of apartments, townhouses, and detached houses to fulfil this need.
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