As we close out 2025 and look ahead to the new year, it is apparent that opposing forces are shaping the Brisbane market; An unprecedented shortage of new housing supply, as construction costs squeeze the pipeline, while simultaneously, some of the most significant lifestyle precincts in Brisbane’s history are green-lighted, shaping the way our city evolves
(THE AUSTRALIAN PROPERTY MARKET)
The national property market has just hit a historic milestone – the total value of residential real estate has reached an eye-watering $12 trillion. To put that in perspective, our housing market is now worth nearly three times the value of all Australian superannuation assets combined!
In the final quarter of the year, both inquiry and transaction levels have lifted, driven by a combination of factors. Infrastructure spending, continued investor activity and lower interest rates have improved borrowing capacity, and one buyer demographic in particular is taking to the market like never before.
Driven by necessity and supported by expanded incentives like the First Home Guarantee scheme, the last months of 2025 have experienced the resurgence of the first-home buyer. This demographic is expected to remain highly active into the new year, particularly in the lower-to-middle price brackets, in line with the scheme’s property price caps.
(THE END OF 2025)
Old wisdom says that real estate sleeps in December, but this year, the holiday season is busier than ever. Buyers are actively engaging, inspecting and making decisions faster than in previous months, and the mix of urgency and opportunity currently lingering in the air will soon give way to the festive surge.
It used to be predominantly beachside suburbs that experienced a spike in activity during vacation periods – typically visitors keen to secure a holiday home ahead of the next season. Times have changed and according to stats on major portals, Australians seem to now use their holidays to property hunt, with search traffic spiking on Boxing Day and throughout January.
(BRISBANE PROPERTY MARKET UPDATE)
National growth may be stabilising, but Brisbane is running its own race. The local median house price surged by a staggering $136,000 to $1.15 million this year; three times faster than Melbourne!
It is Brisbane’s unit market however that took out the top rank in the nation, jumping $121,200 in just one year to $788,000! By way of comparison, Sydney only experienced a $52,5000 increase, less than half of our state’s capital.
The supply and demand imbalance continues to push prices upward, and the list of contributing factors is long. Rising population, an undersupply of housing and exorbitant construction and renovation costs, as well as cumulative rate cuts throughout 2025 and an expansion of the First Home Guarantee scheme are all notable drivers of the rising property values.
(THE APARTMENT SUPPLY SQUEEZE)
Despite surging migration, sky-high construction costs and enduring labour shortages are severely impacting the start of new construction projects. As a result, South-East Queensland faces its smallest apartment pipeline in recent times.
In the 2025 financial year, construction costs have risen by 14 per cent, pushing the average cost to build a single unit to $713,000. Build prices have hit record highs, outperforming both Sydney and Melbourne, but capital concerns are not the only factor restricting the output of new developments. The constrained supply of apartment sites also plays a major role in the supply shortage, creating stiff competition over well-positioned development sites.
Lower-revenue, entry-level projects have become hardly feasible for developers. Mid to large apartments (two to three bedrooms homes) now dominate the new apartment market in SEQ as builders pivot toward high-margin luxury projects. Smaller units (sub 75 SQM) now account for only 3 per cent of stock available – the supply of entry-level apartments has become virtually nonexistent.
In a market with high demand and tight supply, developers who manage to secure a premium parcel of land in an in demand location position themselves for long-term success. Infrastructure investment across Brisbane in preparation for the 2032 Olympic and Paralympic Games, strong population growth due to migration and an insatiable demand for quality units is reflected in the breadth of high-end projects approved across all four corners of the city.
(TENERIFFE BANKS UPDATE)
Case in point, momentum is building for Brisbane’s most significant riverfront project. Kokoda Property Group recently announced the appointment of Sydney-based builder Versatile Construction for the construction of the $1.5 billion housing development on the 17,612 SQM site in Teneriffe.
The project will deliver 212 luxury residences spread across four buildings, extensive retail and hospitality spaces, as well as public parklands and Brisbane’s first Kimpton Hotel.
With construction scheduled to start in December 2025 and a staged delivery from 2028, this project is set to anchor the local market’s upper end, with units ranging from $1.99 million to $28 million for the project’s penthouses. The immediate success of the sales campaign, achieving an incredible $285 million in sales on release day, proves that demand for ultra-luxury riverfront living remains immune to broader economic headwinds.
As well as redefining the Teneriffe landscape, which has seen little change since the redevelopment of the Woolstores close to two decades ago, this project will deliver roughly 2,000 jobs for Queenslanders in the subcontractor and supply sector.
(UNIT MARKET)
The steady shift from freestanding houses to units in the inner-city property market is old news, but the distinct choice of quality over quantity is becoming increasingly apparent in buyer behaviour. While ‘fixer-uppers’ will always have their benefits, material and labour prices costs, as well as cost blowouts have exponentially lifted the appeal of turn-key, good quality renovated products.
“Renovation fatigue” is real and rising construction costs and trade shortages have shifted buyer preference significantly. Buyers are increasingly seeking established homes that are well-maintained and ready to live in and are willing to dig deep into their pockets to avoid the inconvenience and the uncertainty associated with a renovation.
(WOOLSTORE MARKET)
In the Woolstores too, the distinct shift toward generous floor plans and luxurious renovations has become palpable.
It is hard to believe that over three decades have passed since the first Woolstore (Mactaggarts Woolstore) underwent its initial transformation from derelict warehouse to student accommodation.
The shift from basic affordable housing to tightly-held pieces of history sharply accelerated during the 2020/2021 market boom, cementing the Woolstores’ position in a class of their own in the unit market.
As most of the buildings reach the thirtieth anniversary of their renovation, finding an apartment in original condition is a near impossible feat. In fact, we have noticed a sharp rise in high-end renovations, with owners investing significantly into architectural designs with quality finishes. This in turn has contributed to another strong value uplift in a market where buyers are willing to pay a premium for turnkey residences.
(FIRST HOME BUYER ACTIVITY SURGING)
Conversely, affordability constraints are forcing many first-home buyers to purchase unrenovated units or “fixer-uppers” simply to enter the market. The data shows these buyers are making significant lifestyle sacrifices to do so, often underestimating the hidden costs of repairs.
Despite this, 2026 is shaping up to be the year of the First Home Buyer. The pressure of rental stress, combined with the expansion of the First Home Guarantee scheme has become a strong motivator.
Unsurprisingly, intense competition has seen inner-city property prices rise sharply, teetering on the upper limit of the scheme’s price caps within days of it becoming available, forcing first home buyers to stretch themselves to their limit.
(TENERIFFE UPDATE)
Teneriffe’s position as Brisbane’s most expensive suburb remains uncontested – it is simply impossible to find another postcode that offers the incomparable combination of proximity and connectivity to the City, airport and major motorways, without compromising on a riverside location and elevated positions with city views.
This area has experienced a 15.4 per cent annual unit value growth, with strong indications this upward trajectory will continue well into 2026, as astronomical figures are invested into local construction.
(THE FORTITUDE VALLEY REVITALISATION)
Despite being home to the upmarket James Street precinct and bordering New Farm and Teneriffe, Fortitude Valley has still not entirely shaken its grungy shackles. Aiming to increase housing density and revitalise Fortitude Valley, Brisbane City Council has announced a new “Fortitude Valley Sustainable Growth Precinct Plan”.
Aiming to ‘grow up, not out’, the plan will allow for increased building heights to accommodate Brisbane’s rapid population growth. In addition to this, the revitalisation aims to improve walking, cycling, and public space connections to nearby venues for the Brisbane 2032 Olympic and Paralympic Games.
Community consultation is scheduled from December to February, with key focus areas including the land surrounding the Fortitude Valley train station and sections of Wickham, Ann, and Brunswick streets. Besides bringing clarity to the suburb’s future and stimulating business and residential growth, this could be a first step in elevating this inner city suburb’s broader appeal.
(NEW LANDMARKS)
Hamilton’s quaint yet slightly tired Racecourse Road is set for a major revival, with developers Fortis and Graya launching boutique mixed-use projects designed to rival James Street.
Keeping in line with trends across the industry, both developments are targeting the owner-occupier and downsizer markets, signaling a move away from investor-grade stock toward high-spec, low-density, lifestyle-focused residences.
(SUMMARY)
As 2025 concludes, the Australian property market has reached a historic valuation, with Brisbane emerging as a standout performer, driven by a complex mix of intense demand and supply constraints.
While national growth stabilised, Brisbane’s market surged, fuelled by population growth, Olympic infrastructure investment, and cumulative rate cuts. Soaring construction costs, labour shortages and a lack of land to build on has seen builders pivot toward high-margin luxury projects like the $1.5 billion Teneriffe Banks development, stalling entry-level development.
As a consequence, buyer behaviour has shifted significantly: “renovation fatigue” is driving a premium for turn-key, high-quality residences, while newly incentivised First Home Buyers are forced to aggressively compete for limited affordable homes, creating an unusually active holiday trading period that sets the stage for a robust 2026.
