Brisbane is set to rival Sydney as the best performing housing market next year as investors look to the cheaper Queensland market.
Prices in Brisbane and Sydney will grow between 5 per cent and 7 per cent next year, beating a slowing Melbourne, where prices will increase between 3 per cent and 5 per cent, according to RP Data senior research analyst Cameron Kusher.
Mr Kusher said investors felt home prices in Sydney and Melbourne had become too hot. “We are starting to see investor activity climb in southeast Queensland,” Mr Kusher said yesterday. “Everybody (in Brisbane) is reporting increased investor activity as people are being priced out of the Sydney and Melbourne markets.”
The median house price in Brisbane at the end of November was $475,000, compared with Sydney’s $855,000 and Melbourne’s $545,000, according to RP Data
Locals are also vying to get in on the action. First-home buyer Mel Pikos, 27, bought a two-bedroom, two-bathroom apartment in South Brisbane for about $590,000. He felt it was a good time to buy because prices are about to surge. “I wanted to live in South Brisbane because it is a five-minute drive from the city and there is plenty of amenity and cafes,” Mr Pikos said.
CBRE managing director of residential projects Paul Barratt said Sydney and Melbourne-based investors had become more prominent in Brisbane.
“We are getting an enormous amount of interstate investors because there is a huge price difference,” Mr Barratt said.
International investors who had typically invested in Sydney and Melbourne were becoming more active in the market. “The word is out that Brisbane is a better investor opportunity.”
Mr Kusher said home-price growth nationally would slow to less than 5 per cent in 2015, down from 8.7 per cent in the year to November. Home prices in Perth, Canberra and Hobart would register flat or negative growth, Mr Kusher said.
But Australian Property Monitors’ Andrew Wilson said there was still energy in Sydney.
RP Data released figures yesterday showing Australia’s most expensive suburb for a house is eastern Sydney’s Centennial Park, with a median value of $5.49 million. The most expensive for units is Dawes Point on the edge of Sydney’s CBD, where the median value is $2.52m. The cheapest suburb to buy a house is Fairymead in regional Queensland’s Wide Bay-Burnett, with the median value at $70,443.
This article first appeared in The Australian Business Review.