House prices in Brisbane are forecast to rise by nearly 20% over the next two years, according to a new outlook from KPMG, reinforcing the city’s position as one of Australia’s most expensive housing markets behind Sydney. Strong demand, population growth and relative affordability compared with southern capitals are expected to keep prices climbing, even as buyers remain mindful of climate risks.
However, a clear divide is emerging in the booming market, with homes in flood-prone suburbs such as Oxley and Yeronga attracting fewer buyers and taking longer to sell. Agents say flood risk has become a key factor in purchasing decisions, often resulting in lower sale prices and smaller pools of interested buyers, despite some properties still surpassing the $1 million mark amid tight supply.
Industry groups including the Insurance Council of Australia warn that rising insurance costs and increasing exposure to extreme weather could shape future demand, with hundreds of thousands of Australian homes facing significant flood risk each year. While some buyers are willing to accept the risk in exchange for better locations and lower prices, experts say the gap between flood-zone and flood-free properties may widen as Brisbane’s property boom continues.