Brisbane will be the next boom town, according to a leading housing market expert, tipped to achieve price growth of up to 10% over 2015.
Dr Andrew Wilson, senior economist for the Domain Group, says the Brisbane market has been recording solid growth for the past two years.
“It was another solid year last year for the Brisbane market. We’ve tracked medium house price growth of just under 6% for 2014, which was up another 1% from the 2013,” he told Australian Broker
“The market has certainly recovered its confidence; there are some early signs of improved economic activity. It’s certainly a market that has been in catch-up mode. Its growth cycle started later than some of the other capital city markets, particularly Sydney, Melbourne and Perth. But certainly the Brisbane market is reinvigorating itself now."
The Brisbane market is set to continue its growth trajectory this year, according to Wilson, driven by the strength in its inner city markets. Price growth will push up to about 6% or 7%, but the inner city markets could grow by up to 10% this year.
“It will be another solid year in prospect for the Brisbane market,” he said. “It’s been driven mainly by mid to high price ranges rather than the lower budget price ranges in the mid to outer suburbs, so it is Brisbane inner city that has been the strong growth driver and prestige property as well.
“But it certainly remains affordable in comparison with other capital city markets – real prices are still below where they were nearly five years ago. Interest rates are also at historically low levels which improve affordability further.
“It is the value opportunity which is driving buyers. It is the perception of buyers that it is a good time to buy.”
Wilson says Brisbane is likely to overtake Melbourne as the second best performing market in 2015, after Sydney. As a result, it is likely to see a pick-up in investor activity.
“There are good prospects for investors in Brisbane. Capital growth will not be around the Sydney level this year although it is starting to push towards that. It will likely be the second best performing market this year," he told Australian Broker
“The rental market remains tight, particularly for houses. There has been a lot of construction in units in Brisbane over the last two or three years, which is producing higher levels of supply and putting downward pressure on rental growth and prices growth. However, investment in houses certainly remains an attractive proposition with upside to prices growth, rent continuing to grow in Brisbane and a tight vacancy rate.
“I do think investors will be attracted and be part of the energy that drives the Brisbane housing market this year.”