Tips for first-home buyers
The property market may be beyond the reach of many however here's some creative tips to make things a little easier.
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Investors, increasingly put off by Sydney's sky-rocketing prices, are turning to Brisbane and Melbourne apartments to stock their portfolios.
Agents and developers operating in the northern and southern cities report booming enquiry and sales coming out of the Sydney market as prices continue to grow.
An artist's impression of Gurner's third apartment tower in FV series in Brisbane. Photo: Supplied
The strength of the Sydney apartment market is shown in RP Data's latest Pain and Gain report. It shows 8.3 per cent of investment apartments around the country were resold at a loss, but in Sydney only 2.5 per cent lost ground on resale.
Rental yields tell the story: one bedroom apartments are hovering at 5.1 per cent in Sydney but 6.5 per cent in Melbourne and 7.2 per cent in Brisbane. Yields for two-bedders are even tighter: 4.7 per cent in Sydney, 5.5 per cent in Melbourne and only 5.9 per cent in Brisbane.
Sydney has surged this year. New monthly median values are due out this week but at the start of September, Sydney property values had risen 17.6 per cent in 12 months, compared with a 14.6 per cent increase in Melbourne and 8.7 per cent in Brisbane.
Auction clearance rates have started to taper off in Sydney and Melbourne – though hovering around the healthy 70 per cent mark – which some pundits hope might be a sign the market is starting to temper.
360 Property Group managing director John Meagher, who sells apartments in all three cities, said: "We are seeing huge demand from Sydney buyers for Melbourne and Brisbane. The reason why is pretty straightforward – it's affordable and you can buy a two-bedroom apartment for the same price as a one-bedder in Sydney.
"The price differential between Sydney and Melbourne and Brisbane is too wide to justify. Brisbane still represents great value and has a great story while Melbourne has been the outstanding and consistent performer for over 10 years."
BMP sales director Ashley Bramich, whose company has a pipeline of 650 apartments in Brisbane and 1600 for Melbourne, has seen the same shift.
"We are seeing an enormous amount of enquiry from Sydney into Brisbane and good enquiry for Melbourne," Mr Bramich said.
"From a rental return perspective, the yields are getting very tight in Sydney but the price point is just too high for most investors and self-managed super funds. When you've got one-bedders starting at $650,000-$700,000, you are starting to miss out on investors," Mr Bramich said.
There was plenty of room for capital growth in Brisbane, where the city was becoming more sophisticated and multicultural, he said, whereas Melbourne was now seen as a global city.
"Education is a driver in Melbourne and there is a great availability of land. Australians have seen property as a local investment but it is an international commodity now," he said.
Tim Gurner who heads up Gurner, said competition for sites in Brisbane was increasing. He recently paid $30 million for two sites in Fortitude Valley.
"It's a very very different market from Melbourne. We've had a fair bit of success," Mr Gurner said.
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