BRISBANE is tipped to be the strongest property market in Australia in the next few years.
Leading real estate industry figure John McGrath described the Brisbane market as undervalued and predicted it would soon start to catch up to southern powerhouses Sydney and Melbourne.
Mr McGrath, the founder of McGrath Real Estate, was speaking in Brisbane at a function on Wednesday.
He was “very, very confident’’ in where the property market was right now, particularly in Southeast Queensland.
“And I’m not just saying that because I am in this part of the world,’’ he said.
“We think Southeast Queensland, and Brisbane is a focal point, is going to be one of the strongest markets in Australia.
“We think it is going to be the strongest market in Australia for the next five or six years.’’
“It won’t close because Sydney is coming back big time,’’ he said.
“Sydney might correct a few per cent at some point, it probably will, it is going to close because property here for me when you compare it with the other big east coast cities is undervalued and is due for a catch up.’’
Mr McGrath used Brisbane and Sydney suburbs Paddington as a comparison to where the different capital city markets were.
“They are quite comparable, the style and equidistance from the city, a similar demographic and so forth,’’ he said.
“There was a time where you would get a bit of change if you sold in Paddington Sydney and came here, but not a lot. Right now it is double, maybe more to buy a comparative property.
“The market here is not expensive, I think the market here is value for money. Brisbane is obviously showing some signs of improvement, and southeast Queensland in general.’’
Mr McGrath said a rise in telecommuting would also benefit Southeast Queensland property markets, particularly the Gold Coast and Sunshine Coast, as more people sought to buy in lifestyle areas.
“Right now we are selling one-bedroom units in Sydney for $850,000 to $900,000, you can go down to the beautiful Gold Coast and buy a house on the water on the canals there for that sort of money.’’
He believed the property market would start to rebalance at some point, although wasn’t predicting great drops in Sydney or Melbourne values.
“I see Sydney and Melbourne is close to their peak, I think we are approaching the peak of the market, I think Southeast Queensland there is significant growth happening here not in the next 12 months but over the next few years which will really bridge that value gap.’’
According to the latest CoreLogic home value index the median house price in Brisbane ($530,000) was almost half that of Sydney ($1.05 million).
Brisbane was also delivering the strongest returns for investors with rental yields of 4.1 per cent for house and 5.2 per cent for units, higher than Sydney, 2.8 per cent and 3.7 per cent and Melbourne, 2.6 per cent and 4.2 per cent.