Shock as Brisbane home price projected to beat Sydney

Brisbane has had a dramatic transformation in the past five years, rapidly shaking off the country town image it had in the past.

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Shock new figures show if the current pace of growth is maintained, Brisbane will overtake Sydney as the most expensive capital to buy a home in Australia.

The scenario, provided by the Real Estate Institute of Queensland CEO Antonia Mercorella, was based on the current pace of Brisbane holding at 9.7 per cent going forward and Sydney keeping to its 1.1 per cent.

Ms Mercorella said “not that long ago, it seemed unfathomable to many that Brisbane would overtake Melbourne in property prices, yet this has now occurred – we have become the second-most expensive city in Australia. So, the possibility of Brisbane property prices “pulling a Bradbury” over Sydney as well, remains to be seen.”

Sydney has been the quasi capital of Australia forever, with strong migrant inflows, but that shifted dramatically during the pandemic.

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She said “if Brisbane were to continue growing at the current pace of 9.7pc annually and Sydney’s at 1.1pc, Brisbane could theoretically surpass Sydney’s median dwelling value by 2029.”

The figures worked off current median dwelling values of $894,000 and $1.19m for Brisbane and Sydney respectively, expecting that at the current pace, those would hit $1.3m in Brisbane compared to about $1.24m in Sydney in 2029.

REIQ CEO Antonia Mercorella said the projection depended on market factors like wage levels. Picture: Liam Kidston

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But she added “it’s essential to note that this is based on a projection extrapolating current growth rates, not a forecast, and depends on a range of economic and market factors”.

Those key factors include average income levels, she said, something Sydney was well ahead on, showing a higher proportion of high-income earners given its dominant financial and professional services sectors.

“That said,” Ms Mercorella said, “it’s not implausible that along with the incredible demand we’re experiencing and expected population growth for Brisbane, the Olympics could lead to further catching up to Sydney’s prices.”

“Brisbane’s recent growth, particularly in the wake of Covid and the Olympics announcement, reflects an extraordinary, upward trajectory.”

Brisbane homes were relatively affordable until a vast influx of investors began driving up prices in recent years.

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Ms Mercorella said major infrastructure projects, including those related to the Olympic Games, would create significant improvements in connectivity and liveability for Brisbane and southeast Queensland.

“These long-term benefits are expected to fuel continued real estate growth, particularly in inner-city areas neighbouring key infrastructure, but also in the regions.”

“History tells us that when Sydney hosted the 2000 Olympic Games its median house price saw an 88 per cent uplift over the five years ending 2001.”

But she warned property price growth of Olympic host cities has varied wildly, so that was not a reliable benchmark.

“While Brisbane may not overtake Sydney in median prices, the Olympics will certainly play a role supporting the city’s property market, creating an optimistic outlook for the future.”

Ms Mercorella said “we recognise that in the current climate of a housing crisis, accessibility and affordability is top of mind for many and property price growth predictions will be met with mixed reactions”.

“While there is a lot to be positive about with the Olympics, ensuring there’s adequate housing supply and a roof over the head of every Queenslander is a priority that cannot be overlooked.”

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