Brisbane on course for growth in values

Brisbane is expected to close in on Sydney’s sky-high property values in the coming years as billions of dollars of investment pour into the Queensland capital, according to new research by leading property analysts CoreLogic RP Data.

Sydney’s $790,000 median is the result of a 74 per cent leap in values during the past six years – eclipsing Brisbane’s $458,000 median price tag after the city recorded a 9.4 per cent growth in value over the same period.

Melbourne, which boasts a median price of $568,000, has jumped 64.5 per cent in value post the global financial crisis.

CoreLogic RP Data Head of Research Tim Lawless said Brisbane was one of the country’s best performing capital cities in the eight years prior to the-GFC (2001 – 2008), when the market grew by 163 per cent.

He said a price correction was anticipated over the coming years as the Sydney and Melbourne markets started to moderate and Brisbane began to reap the rewards of increased investment and new infrastructure.

“Brisbane’s comparatively slow growth to date actually translates to a great affordability advantage, and as a result we are seeing southern investors starting to shift their focus the Queensland capital,” he said.

“The other catalyst that will create favourable conditions for Brisbane is the delivery of major new projects like the $2 billion Queen’s Wharf, and $1.5 billion Legacy Way, which support the city’s maturity as a global business and lifestyle destination.

“The price growth that Sydney and Melbourne have seen is not sustainable and the only options are for the southern markets to drop to meet Brisbane, or for Brisbane market to catch up on price performance and growth in values.

“Current market fundamentals suggest that the latter scenario is most likely, with Brisbane expected to make gradual albeit solid improvements over the coming years.”

Mr Lawless said purchasers looking to take advantage of Brisbane’s imminent upswing should scout suburbs that are well serviced by transport infrastructure around the inner city and fringe.

“There are already signs that the Brisbane market as a whole is gaining pace, with dwelling sales recently reaching the highest levels since 2007, and the average apartment achieving a 5.5 per cent yield – which is equal first with Darwin across the capital cities,” he said.

“One of the key up and coming localities is Windsor – which is just a few kilometres from the city centre, within proximity to trendy shopping and dining precincts and close to major transport routes.

“Windsor has an affordable median apartment price of $470,000 which has increased by 11 per cent over three years, and an average rental income of $385 per week, resulting in a five per cent yield.

“Prospective purchasers should look for suburbs which have experienced solid, sustained growth in recent years rather than huge price increases or high sales volumes, which may indicate that the area has hit its peak.

“Buyers can take advantage of the fact that mortgage rates are likely to stay on hold for the foreseeable future, despite the anticipated upward trend in the Brisbane market.

“On the ‘property clock’ Brisbane is just starting to move out of a trough into an upswing, so now is a good time for purchasers to make their move.”