Brisbane-aerial2Southern investors are looking to the South East Queensland property market as Sydney becomes too expensive to gain a foothold.

While the latest BIS Shrapnel report warning Sydney house prices will start to fall in 2016-2017 as interest rates start to rise, Brisbane, the Gold and Sunshine Coasts, are emerging as the more attractive destination for investors.

Despite the mining boom coming off the boil, Brisbane’s median house price of $475,000 is looking a lot more affordable than Sydney ($785,000).

“Brisbane house prices just haven’t caught up [to Sydney and Melbourne] – and we are starting to see more investors come from interstate. They have been absent for a while because things have been so good in their own state. But there are definitely opportunities up here now” says property mentor Hiro Rochette

HIGHER RETURNS

Mr Rochette said clients had commented about the expensive price tags in Sydney and Melbourne and they were attracted to the higher returns and the buzz and new infrastructure around the Gold Coast ahead of the 2018 Commonwealth Games.

Brisbane aerial 2Chinese investors have also been piling into the Gold Coast apartment market as well as funding their own developments, with over $600 million worth of Gold Coast development sites sold to Asian-backed buyers in the past year. 

The BIS Shrapnel report found Queensland would largely be insulated from the dip in house prices in southern states, with further interest cuts later this year expected to make Brisbane homes even affordable.

Brisbane’s median house prices were expected to grow by a total 13 per cent over the next three years, while apartments will rise by 6 per cent. 

CoreLogic RP Data released on Wednesday found Brisbane had the highest investment yields of the major metropolitan markets for both houses and apartments.

Sydney’s valuations are now a whopping 80 per cent above Brisbane, according to Corelogic’s head of research Tim Lawless. He said the last time that happened in 2002-2003, Brisbane’s prices took off.

GROWTH PROJECTIONS

REIQ chief executive Antonia Mercorella said the growth projections for Queensland homes were very encouraging.

“Brisbane offers some excellent opportunities for owner-occupiers and investors. This is in stark contrast to other markets, such as Sydney, where rapid price growth is a cause for concern,” Ms Mercorella said.

She said there was also good news for the neighbouring Gold Coast and Sunshine Coast markets with future price growth expected to reach 13 per cent and 12 per cent respectively.

Brisbane real estate agent Rob Holcombe, who runs Bees Nees Reality in South Brisbane, said southern investors were chasing cheaper prices in Brisbane.

“They are primarily investors and most are buying with a view to capital gain. They see better prospects for returns up here, not to mention it’s more affordable,” he said.

“They come up here to buy our property, they just can’t admit to supporting our football teams”

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