Brisbane is tipped to be the strongest property market in Australia in the next five or six years.
Leading real estate industry figure John McGrath described the Brisbane market as undervalued and predicted it would soon start to catch up to southern powerhouses on the strong Eastern Seaboard being Sydney & Melbourne.
Mr McGrath, the founder of McGrath Real Estate, was speaking in Brisbane at a function on Wednesday. He was “very, very confident” in where the property market was right now, particularly in Southeast Queensland.
“We think Southeast Queensland, and Brisbane is a focal point, is going to be one of the strongest markets in Australia.” “We think it is going to be the strongest market in Australia for the next five or six years.”
Mr McGrath said the value gap between what buyers paid for a comparative property in Sydney & Brisbane would start to close on the back of capital growth in SEQ.
“It won’t close because Sydney is coming back big time, it will close due to increasing demand on the back of a strong growing population”
“Sydney might correct a few % at some point, it is going to close because property here for me when you compare it with the other big east coast cities is undervalued and is due for a catch-up.”
Mr McGrath used Brisbane and Sydney suburb of Paddington as a comparison to where the different capital city markets were. “They are quite comparable, in style and both in equidistant from the city, with a similar demographic and so forth,” he said.
“There was a time where you would get a bit of change if you sold in Paddington Sydney and came here, but not a lot. Right now it is double (and maybe more) to buy a comparative property in the comparative suburb of Paddington.”
“The market here is inexpensive, the Brisbane market is value for money. Brisbane is obviously showing some signs of improvement, as is Southeast Queensland in general.”
Mr McGrath said a rise in telecommuting would also benefit Southeast Queensland property markets, particularly the Gold Coast and Sunshine Coast, as more people sought to buy in lifestyle areas where job growth is on the rise.
“Right now we are selling one-bedroom units in Sydney for $850,000 to $900,000, you can go down to the beautiful Gold Coast and buy a house on the water on the canals there for that sort of money or a 1 bed in a quality suburb in Brisbane for $350,000.”
He believed the property market would start to re-balance at some point, although wasn’t predicting great drops in Sydney or Melbourne values. “I see Sydney and Melbourne being close to their peak, I think we are approaching the peak of these markets, whereas Southeast Queensland there remains significant growth happening here in the next 12 months and over the next few years which will really bridge that value gap.”
According to the latest CoreLogic home value index the median house price in Brisbane ($530,000) was almost half that of Sydney ($1.05 million).
Brisbane was also delivering the strongest returns for investors with rental yields of 4.1% for houses and 5.2% for units which is higher than Sydney, 2.8% and 3.7% and Melbourne, 2.6% and 4.2%
Editors summary : Astute Investors rely on …
Incredible population growth due to new job creation in SEQ, choice of lifestyle and affordability will continue to place upward pressure on the supply of dwellings to own or rent …. exacerbating property values. Inevitable
Why Invest in Brisbane read more here
Queensland – the fastest growing State in Australia more here
Investing in Queensland more here