The difference in property prices between Brisbane and Sydney is staggering, considering that both have waterfront homes, a range of property types and growing populations to fuel buyer demand.
According to property analysts RP Data, the price difference between the two cities is as much as 60%, with Brisbane’s median at $480,000, while Sydney’s is $765,000.
Apartments are also substantially cheaper in Brisbane, with the median price currently at $383,000, which is about 45% cheaper than in Sydney.
Units in Sydney are selling closer to the $500,000 mark and if recent auction prices are anything to go by, one bedroom flats in inner city Sydney can go for around $700,000.
“In Brisbane, one bedroom apartments situated just one kilometre from the CBD are available from $339,000 and they max out at around $500,000 for premium stock, while in Sydney the same type of apartment would start at around $500,000,” says Lachlan Walker, director of property frim Place Advisory.
“A median price disparity of this magnitude has not been seen between these cities since 2004.”
Brisbane market playing catch up
Brisbane has certainly been lagging behind some of the other capitals when it comes to price growth and its slower economy has played a role in this. As a result, its auction numbers have been poor and have significant room to improve this year.
Recent rises in the number of auctions and homes being sold seem to suggest buyer interest is increasing. RP Data reported 140 auctions in the city over the most recent week and the clearance rate hit 49%, up 3% on the prior week.
Although still well below that of Sydney and Melbourne, Brisbane’s auction clearance rate has generally been trending upward since early 2011, says RP Data.
Low interest rates, combined with relatively affordable prices and the possibility of capital growth, should be enough to keep the market moving.
Rich Harvey, buyers’ agent and managing director of Propertybuyer.com.au, says there are investment opportunities in Brisbane, while the Real Estate Institute of Queensland reported last month that the median house price in the city was up 6% during the December 2013 quarter.
“Not only are Brisbane investment properties selling in high numbers, they’re doing so at a quicker pace and with less discounting,” says Harvey.
“All this data points to one conclusion – buyer demand in Brisbane is high. More homes are being sold and for higher prices. In short, Brisbane property investment is looking very attractive at the moment.”
Harvey says that Brisbane is at the right point of the property cycle for investors to get in at the early stages of growth.
“Brisbane languished in confidence during the last two years but has now picked up momentum. Its price point is very attractive relative to both Sydney and Melbourne,” he says.
Two of the suburbs Propertybuyer highlights are Brassal, an outer ring area that is east of town and close to Ipswich, and Mt Gravatt East, which is a well known suburb just 10 kilometres south east of the CBD.
Brisbane’s broad appeal
Brisbane has long boasted excellent weather and an array of holiday activities, but it hasn’t always competed with other Aussie capitals on a cultural front.
This has changed in recent years however, as the city has expanded, diversified its food and entertainment options and has seen its arts scene blossom.
Walker says Sydney and Melbourne are usually thought of as Australia’s most stylish and cosmopolitan areas and therefore have attracted investors, but Brisbane is closing the gap.
“Brisbane, traditionally seen as the big country town to the north, is finally gaining ground on its interstate cousins in areas that they have long dominated – that is, in the social, cultural and transport realms,” he says.
The value proposition for Brisbane is providing investors with a rare opportunity to not only snap up a property for a significantly cheaper price but also to capitalise on upcoming capital growth, adds Walker.
“Brisbane is extremely affordable, with high yields and substantial investment in infrastructure creating a long term buying opportunity,” he says.
“There is no doubt that there will be some value growth in Brisbane real estate this year, with higher demand leading to price growth.”