Brisbane overtakes Melbourne as Australia’s second-most expensive city amid record low supply

Brisbane has surpassed Canberra and Melbourne to become Australia’s second-most expensive city, with the highest median dwelling value, a position it has not held since 1997. CoreLogic research director Tim Lawless attributed Brisbane’s record rise to extremely low levels of housing supply in the market.

In January 2024, Brisbane’s median dwelling value initially overtook Melbourne’s, but this was largely due to compositional factors, with Melbourne’s overall median dwelling value being weighed down by a high concentration of relatively cheap units. However, Brisbane houses have now surpassed Melbourne houses in price, with the median house price in Brisbane currently at $937,479, which is $190 above the Melbourne median house price.

Once considered one of the more affordable east coast markets, Brisbane’s momentum accelerated during the pandemic, with dwelling values increasing by 59.8% since the onset of COVID-19, compared to just 11.2% in Melbourne. Lawless attributed this difference in growth rates to low supply, stating, “The number of properties available for sale in Perth and Adelaide remain more than -40 per cent below the five-year average for this time of year, while Brisbane levels are -34 per cent below average.”

Despite an increase in vendor activity compared to the previous year, fresh listings are being rapidly absorbed by market demand, keeping inventory levels low and putting upward pressure on prices. In contrast, Hobart, where listings are 41% above the five-year average, has seen home values drop by -0.5% over May, and home sales are -6.4% below the five-year average.

Lawless emphasized that the common denominator across the six capital cities that saw an uplift in house prices last month remains a mismatch between housing supply and housing demand. “To say the housing market has been resilient is an understatement,” he said. “Despite worsening affordability pressures, from both a purchasing and a rental perspective, Australian residents still need to keep a roof over their heads.”

Across Australia, dwelling approvals remain -23.5% below the decade average, and multi-unit approvals are almost -44% below the decade average, despite a small uplift in supply compared to the previous year.

Sydney remains the most expensive capital city, with a median dwelling value of over $1.15 million, while Perth saw the steepest monthly growth, with the median dwelling price rising 2% in May to $736,649. Only Darwin and Hobart experienced declines in dwelling values over the month of May.