Brissy is sitting pretty
So I’ve been saying that the property market is turning for a few weeks now. Economists are coming around to the idea and we’re baking in a boom in the medium term.
But which city is going to lead the way?
The fundamentals are solid for Brisbane, and the property bulls are talking it up:
QUEENSLAND is on the cusp of a property boom that could lead prices to skyrocket by more than 20 per cent in some areas and last for years to come.
Fears of a real estate armageddon in the wake of the pandemic have been replaced with a surge in confidence in the Sunshine State’s housing market, driven by an exodus to lifestyle and affordability, infrastructure spending and cheap money.
From Cairns to Coolangatta, buyer demand is at an all-time high and suburb sale-price records have been smashed since COVID-19 took hold in March, while the state’s southern counterparts are languishing.
New data from CoreLogic, analysed by Finder, has found the number of house sales in Brisbane jumped 21 per cent in just one month in July, and rose in value by nearly 23 per cent to a staggering $1.4 billion — a bigger rise than in any other capital city.
Economists at Westpac who were forecasting price falls of 10 per cent at the start of the year are now predicting a 20 per cent rise in Brisbane property prices over the next two years — the highest of any capital city.
Propertyology head of research Simon Pressley is expecting boom conditions “not seen in this country since the turn of the century” by Christmas — but not in Melbourne or Sydney this time…
Ryder Property Research managing director and Hotspotting.com analyst Terry Ryder agrees, although he expects price growth to be more in the range of 10 to 12 per cent…
CoreLogic head of research for Australia Eliza Owen said Brisbane and other parts of southeast Queensland would likely see a boost to housing demand once interstate border closures eased.
“This is because Queensland has been the highest recipient of interstate migration over the past few years, and the normalisation of remote work through COVID-19 may only boost that demand further,” Ms Owen said…
Alex Jordan of McGrath Estate Agents said Brisbane’s housing market was the strongest he had seen it in his 21-year career in real estate, and he would not be surprised if prices rise more than 10 per cent.
I think they’re probably right.
To start with, Brisbane probably has a bit of catch-up to do. While prices in Sydney and Melbourne grew by 60% and 38% respectively over last ten years, Brisbane prices grew by just 13%.
As a result, the relative valuation of Brisbane property to the Australian average is at the lowest level in almost 50 years:
That’s got to be attractive.
Especially when you realise that yields in Brisbane are practically juicy compared to Sydney and Melbourne.
It’s also the case that Brisbane has been much less reliant on overseas migration than the southern capitals, so we can expect things to bounce back much more quickly.
And these local factors are going to compound the general uplift coming from super-cheap money.
So yeah, good times ahead for Brisbane.