Investors and owner-occupiers are increasingly deserting Sydney and Melbourne and buying property in Brisbane near the city centre.
Your Property Your Wealth, a company which advises real estate investors, says prospective landlords are increasingly choosing south-east Queensland over Australia’s two biggest cities.
For significantly less than a median-priced house in Sydney, investors are choosing homes near Brisbane’s city centre which offer a much better cosmopolitan lifestyle without the unaffordable mortgage.
Investors are increasingly deserting Sydney and Melbourne and buying property much farther north (pictured is a three-bedroom house at inner-city Lutwyche selling for $649,000)
Daniel Walsh, the founder of Your Property Your Wealth buyers’ agent group, said the Queensland capital offered much better value and higher rental yields in an area where jobs and transport infrastructure were booming.
‘What we’re seeing now is people chasing affordability and higher-yielding properties,’ he told Daily Mail Australia on Monday.
‘They want something that isn’t going to cost them too much to hold and buy a property in a location that they can see growth over the next five to 10 years.’
For little more than $600,000, it is possible to buy a three-bedroom house with a backyard just 5km from Brisbane’s city centre, in suburbs like Lutwyche or Annerley.
For little more than $600,000, it is possible to buy a three-bedroom house with a backyard just 5km from Brisbane’s city centre, in suburbs like Lutwyche (pictured) or Annerley
In Sydney, that kind of money would barely buy a house at Mount Druitt, more than 50km west of the central business district in a city where rental yields have been weak, even during the strong run of capital growth between 2012 and 2017.
‘People can just jump on a train or be straight in the city in a couple of minutes whereas you’re looking at, say Mount Druitt, a commute to the CBD is going to take 50 minutes,’ Mr Walsh said.
‘It’s not just the difference in house pricing but it’s the difference in what it costs to living in Sydney: you’ve got to go through tolls, everything’s more expensive.’
Sydney’s median house prices is continuing to slump, falling by 10.9 per cent in the year to the end of January 2019, CoreLogic data showed.
Lifestyle-oriented buyers are considering the Gold Coast in Queensland where an apartment with water views at Tugun is selling for $799,000
While Australia’s biggest housing market is in the midst of the biggest downturn on record, Sydney’s median house price still stands at $902,786.
Melbourne’s median house price has fallen by 10.6 per cent during the past year to $740,425 while Brisbane’s equivalent values have risen by 0.1 per cent to $540,750.
The Australian Prudential Regulation Authority’s crackdown on investor and interest-only loans has also encouraged working-age Australians to buy homes they could live in that weren’t ridiculously expensive to pay off.
That has seen them desert Sydney for Brisbane.
‘We’re seeing owner-occupiers, they’re moving from Sydney where they’re struggling to pay a mortgage or they can’t get into the market,’ Mr Walsh said.
‘We’re seeing a credit crunch with finance and because of that, they not able to borrow the $800,000 to $1million they need to get into Sydney so now they’re looking for alternative places to live.’
Buyers are also flocking to the Sunshine Coast, north of Brisbane, where a two-bedroom apartment at Caloundra with water views is selling for $550,000
Lifestyle-orientated home buyers are also flocking to the Gold and Sunshine coasts in south-east Queensland where there has been spending on new transport infrastructure.
Australian house rules
Sydney, down 10.9% to $902,786
Melbourne, down 10.6% to $740,425
Brisbane, up 0.1% to $540,750
Adelaide, up 0.9% to $464,584
Perth, down 5.3% to $465,120
Hobart, up 7% to $494,810
Darwin, up 2.3% to $502,023
Canberra, up 4.3% to $668,469
Source: CoreLogic detached median house prices in year to January 31
‘The Sunshine Coast has done quite well,’ Mr Walsh said.
‘We have seen a lot more infrastructure which in return is creating jobs.’
To a lesser extent, buyers are also eyeing Byron Bay on the far north coast of New South Wales where Australian Hollywood actor Chris Hemsworth is building an $8million mansion by the beach.
For less than the price of a median house in Sydney, it is possible to buy a house a short distance from the beach for little more than $800,000.
A smaller number of buyers after an affordable home are also considering Adelaide, where median house prices stand at $464,584, and Hobart, where equivalent values have surged by seven per cent during the past year to $494,810.
‘We do see Adelaide being more of a slow burn,’ Mr Walsh said.
‘Generally prices are increasing but they’re just increasing by two to three per cent per year, nothing crazy, but we haven’t seen the job creation in Adelaide too much that we’re going to see a massive boom.’
Buyers are also looking at Byron Bay on the New South Wales far north coast where it’s possible to buy a house (pictured) for just over $800,000, which is less than Sydney’s median