Sydney, Canberra, and Melbourne Australia’s Most Expensive Cities for Buying Properties

When it comes to property prices in Australia, cities like Sydney, Canberra, and Melbourne have always topped the list. However, in the last three years, Brisbane has experienced a significant surge in property prices, fueled by the COVID-19 pandemic. As a result, Brisbane has now climbed the ranks and become the nation’s third most expensive city for buying properties, with a median dwelling price of $787,217.

According to data from Corelogic, this is the first time in 15 years that dwellings in the Greater Brisbane region have surpassed Melbourne’s median price of $780,457. This sudden increase in property prices has caused many families to rethink their strategies in order to enter the market.

One such family is the Deacon family, who had to get innovative to survive Brisbane’s booming property market. They decided to combine incomes with their mother-in-law, Pat Smith, to purchase a home that could accommodate three generations. The idea was suggested by Pat herself, as she saw it as a way to secure their future amidst rising interest rates and a competitive property market.

The Deacon family believes that living together has been one of the best decisions they’ve made, both financially and personally. They were able to find a two-storey house with complete dual living, providing separate living spaces for each generation. This arrangement has not only allowed them to overcome the financial challenges of buying a property in Brisbane but has also created a supportive and close-knit family environment.

While Brisbane has surpassed Melbourne in terms of median dwelling prices, it’s important to note that the median house price in Brisbane is still lower than Melbourne’s. In Brisbane, the median house price is $875,991, while in Melbourne, it is $948,041. Similarly, units in Brisbane are also cheaper, with a median price of $561,016, compared to Melbourne’s median unit price of $610,122.

Eliza Owen, the head of research at Corelogic, explains that the higher proportion of units in Melbourne compared to Brisbane brings down the overall median price. Approximately one-third of Melbourne’s housing stock consists of units, whereas in Brisbane, it’s estimated to be only about 25 percent.

In terms of market trends, Brisbane is expected to remain ahead of Melbourne in the short term. While Melbourne is experiencing a decline in property values, with a 0.3 percent decrease in the past four weeks, Brisbane’s prices continue to rise. However, the rate of growth in Brisbane is slowing down, with monthly growth decreasing from 1.5 percent in October to 1 percent in December.

One factor that could impact Brisbane’s property market is the presence of flood-affected homes. After experiencing severe flooding, some homeowners may decide to move away from flood-prone areas, leading to changes in demand and potential variations in capital growth.

The rising property prices in Brisbane have also had a significant impact on the rental market. Renters in Brisbane are facing unprecedented pressure, with rents increasing steeply over the past few quarters. According to the Domain Rental Report, the average rent for houses in Brisbane is now $600 per week, while for units, it is $560 per week. This marks the 10th consecutive quarter of growth for unit rents, which is highly unusual.

Nicola Powell, the chief of research and economics at Domain, explains that the rental market in Brisbane is experiencing record-high prices due to a severe lack of rental supply. Rental vacancies reached an all-time low in February of last year, and although the vacancy rate has slightly increased since then to 0.9 percent, it is still significantly low.

The lack of investment activity in Brisbane is another contributing factor to the rental market’s current state. Demand for rental properties is outstripping supply, particularly as more people are relocating from interstate and overseas. However, there is some hope for renters as the rate of rent increase is showing signs of slowing down, not just in Brisbane but across the country. After 10 consecutive quarters of rent increases, combined rents across Australia’s capital cities have finally held steady.

In conclusion, Brisbane has emerged as Australia’s third most expensive city for buying properties, surpassing Melbourne for the first time in 15 years. While the median dwelling price in Brisbane is higher than Melbourne’s, the median house price in Brisbane is still lower. The rising property prices have also impacted the rental market, with Brisbane experiencing record-high rents and a severe lack of rental supply. However, there are signs that the rate of rent increase is slowing down. Overall, the property market in Brisbane is expected to remain strong in the short term, with prices continuing to rise.