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While Brisbane has been an underperforming property market for several years, there is every indication that property prices in the city will boom during 2014.
The latest national real estate figures produced by RP Data-Rismark shows that the overall property market in Australia performed strongly during 2013 with capital city property prices rising by around 10% during the past year.
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However, this overall figure disguises the fact that some capital city property markets performed very strongly while others underperformed.
For example, the median price of a home in Sydney surged by 14.5% to $655,250 while in Perth the median house rose by 9.9% to $520,000.
In contrast, the median price of a home in Brisbane rose by only 5.1% to $445,250.
While Brisbane has been an underperforming property market for several years, there is every indication that property prices in the city will boom during 2014.
If the national real estate market can be viewed as a clock, then the hour hand is about to hit the Brisbane after passing through the other capital cities.
Historically, property prices in Australia do not move in a uniform pattern with some capital cities outperforming others at any given time.
Brisbane is now viewed an undervalued real estate market by a growing number of property investors because prices are now highly competitive to other capital cities of a similar size ( i.e. compared to Perth where the median house price is now over $70,000 higher than Brisbane).
In addition, rental returns are now much higher in Brisbane than current hot spots such as Sydney where investors have been very active during the past two years.
The reality is that there are currently a large number of investors outside Queensland who have achieved significant capital gains in their properties over the past year and now have the financial capacity to purchase large number of homes in under-priced areas of Brisbane and throughout the State.
This rising activity by property investors should result see the supply of homes listed for sale in Brisbane drop significantly during 2014 which inturn will put an upward pressure on prices.
In addition to Brisbane, other key property markets in Queensland should also perform strongly during 2014 such as the Gold Coast and Sunshine Coast. These property markets are now beginning to benefit from the falling Australian dollar as their local economies are heavily dependent on tourism.
Paul Bennion, Managing Director, DEPPRO tax depreciation specialists
Paul Bennion is the managing director of DEPPRO tax depreciation specialists.
DEPPRO Pty Ltd is Australia’s leading property depreciation company, specialising solely in the preparation of tax depreciation reports for residential, commercial, industrial and leisure investment properties.
