Challenges and opportunities in Brisbane’s residential market as supply lags

Strategic government planning will be crucial in addressing the ongoing supply/demand imbalance in Brisbane’s residential market, as new supply continues to lag.

That’s one of the conclusions from a new CBRE market analysis, which highlights positive fundamentals but ongoing challenges for both the Brisbane and broader South East Queensland residential market.

While 5,600 units and townhouses are projected to be completed in Brisbane this year – up from an average of 3,500 in the five years to 2024 – CBRE Research Director Craig Godber said this figure had been somewhat inflated by project delays, which had shifted some anticipated 2024 completions into 2025.

Mr Godber noted that recent completion levels were also well below the peak period in 2016 and 2017 when annual additions averaged around 12,500 units and townhouses.

“Brisbane's residential market is experiencing unprecedented growth, with demand outstripping supply. Strategic planning by the State Government is crucial in addressing this imbalance and ensuring sustainable development,” Mr Godber said.

Mr Godber noted that low supply levels had translated into an extended period of low vacancy rates, with Brisbane’s metropolitan vacancy being at or below 1.5% since early 2021 and hitting 0.9% as at March this year.

These tight market conditions are evident across all city precincts.

Looking ahead, adjusted additions between 2025 and 2029 are forecast at 23,200 dwellings, or 4,600 per annum, with 60% of these expected to be concentrated in Brisbane’s inner city.

“Brisbane’s low vacancy rate highlights the urgent need for additional residential supply and the forecasted growth in dwelling completions is a positive step towards meeting this demand,” Mr Godber said.

CBRE Metropolitan Investments Director Will Carman said Brisbane’s population expansion and strong demand fundamentals were driving interest in city development sites, but he noted that developer attitudes were shifting.

“As construction pricing continues to climb, developers are becoming more discerning. The focus has shifted toward delivering high-quality, well-located residential communities that can withstand market pressures and meet long-term demand,” Mr Carman said.

He also noted the issue of affordability, with Brisbane’s median house price having crossed the $1 million mark.

“This reflects not only the city’s strong fundamentals and sustained demand, but also the growing challenge of affordability - particularly for first-home buyers. This price growth underscores the importance of strategic planning and quality development to meet evolving market expectations.,” Mr Carman said.

Other findings from CBRE’s analysis include:

• Under the ShapingSEQ plan, the Brisbane City LGA is identified as targeting 210,800 new dwellings over the 25-year period to 2046.
• Nearly 110,000 dwellings are planned as medium to high density (four storeys or more), representing a 134% increase on current supply and equating to approximately 4,400 new dwellings per year. An additional 80,000 dwellings are proposed as low density attached housing (one to three storeys). Achieving these targets will require substantial infill development, with areas supported by transport infrastructure and complementary amenities such as retail likely to be prioritised as key opportunities.
• In the short term, CBRE’s Q2 Residential Valuers Insights Survey indicates that the strongest buyer demand is currently for villas/townhouses, new homes and apartments - likely driven by affordability constraints associated with established housing, particularly in inner-city areas.
• The CBRE survey highlights that a majority (67%) of Brisbane Metro valuers anticipate an increase in vacant land values over the next year, up from 60% in the previous quarter, with most expecting growth of up to 10%.

“The insights from our recent survey underscore the growing demand for diverse housing options in Brisbane, with the anticipated increase in vacant land values reflecting the market's confidence in the city's growth potential,” Mr Godber said.