Real estate: why Brisbane is set to become the best performing capital city


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Brisbane is well placed to take over as the best-performing capital city housing market over the next five years, according to CoreLogic.

There are a number of reasons this is likely and one is that the Brisbane market has previously underperformed.

"Dwelling values across Australia's third largest capital city have risen at the annual rate of 1.2% over the past decade. That's half the pace of inflation and dramatically lower than Sydney or Melbourne, where annual gains have averaged 6.3% and 5.9% over the past 10 years," says CoreLogic.

brisbane property market corelogic

Although this isn't the only reason, CoreLogic says the relative gap in pricing between Australia's largest cities is likely to be one of the factors that attracts housing demand to the city.

It says other reasons why Brisbane is likely to be a strong performer include:

- Households aren't as affected by affordability as significantly as they are in the larger capitals. In Sydney, the dwelling price-to-income ratio is 9.1 compared with 7.5 in Melbourne and 5.9 in Brisbane. Similarly, the proportion of gross annual household income required to service an 80% loan-to-valuation mortgage is now 48.4% in Sydney compared with 39.9% in Melbourne and 31.7% in Brisbane.

- A variety of economic and demographic factors are likely to support improving market conditions across Brisbane, including economic and demographic trends as well as a worsening performance in Sydney and Melbourne, which will provide a lower relative benchmark for Brisbane.

- Population growth from both overseas and interstate is ramping up into Queensland, with the majority of this growth being experienced in the south-east corner. Net overseas migration remains well below that for NSW and Victoria; however, it's the highest in just over three years. Net interstate migration is where Queensland is demonstrating its pulling power, attracting the highest number of residents from other states in 8 1/2 years.

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Maria Bekiaris is editorial campaigns manager for Canstar and former deputy editor of Money. She holds a Bachelor's degree in business.