The trend of Brisbane’s counter cyclical relationship with Sydney continues, while one flourishes the other is subdued. The recent slowing of the Sydney market has seen prices fall up to 12% over the last few quarters. Ultimately, this slow-down is a result of the unsustainable rise in Sydney’s property prices. ‘The fear of missing out’ can be attributed to much of the excess growth with premium prices being paid as a result of fear and emotion.
Now as anticipated, the Brisbane market is beginning to pick up. The improvement in the market is being led by growth in house prices. The below graph shows the growth rates (%) over each period. Each city tends to outperform its counterpart in alternate periods.
Median House Price Growth – Sydney Vs Brisbane
The Real Estate Institute of Queensland (REIQ) has reported that Brisbane’s median house price has reached $670,000 in the 2018 March Quarter, a record high. The low number of house sales listings has resulted in the average time on the market lowering to 32 days. The apartment market is yet to replicate this growth however, it is normal for growth to first occur in house prices. As house prices rise, the relative affordability of apartments becomes a key driver for demand.
The recent growth has also been present in the Sunshine Coast and Gold Coast markets reflecting the effects of Queensland’s heightened interstate migration figures. The REIQ has reported that the Gold Coast achieved the highest rate of house price growth in Queensland at 6.1% and the Sunshine Coast rising 5.2% over the last 12 months.
The improved market is resulting in a more positive market sentiment. This is a sign of the resilience and potential of the Brisbane, Gold Coast and Sunshine Coast markets which are performing well in a market where demand has fallen because of tightened bank lending. With the inevitable improvement of buyer market conditions post the royal commission the future for Brisbane is bright.