Looking at property prices in four of our cities since January 2008. And it is clearly a tale of three completely different property markets. Over the past decade, property prices in many parts of Australia have risen significantly.
The first market – Sydney and Melbourne
Sydney and Melbourne property markets account for around 40 per cent of the Australian housing stock. Sydney and Melbourne property markets have skyrocketed. Sydney is a notable case. Both apartments and houses in Sydney increased over 80% over the period from January 2008 to the peak. However recently they have been correcting. Because Sydney and Melbourne ran up significantly, they are expected to recorrect more than other markets. We have indicated that this will be the case for a while and we expect Sydney to continue its correction, albeit with flatlining decline.
Melbourne, on the other hand, is expected to follow Sydney closely. As Melbourne property market is usually following Sydney’s lead, we expect the declines to continue despite the population boom in the city.
Th second market – Brisbane
Brisbane property market is a different beast. While Sydney and Melbourne skyrocketed, Brisbane house prices done pretty much nothing. Apartments have declined and continue their decline. We are staying clear of apartment market in the sunshine capital. We expect a mild correction in Brisbane housing market as indicated a while back. We don’t expect major declines though and we expect end of 2019 and early 2020 to be the year when Brisbane comes to age.
The third market – Perth (… and Darwin).
Perth! This city cannot catch a break. The property prices have been declining and the decline is accelerating. We are not bullish on Perth. We can see the state is struggling to reposition itself from mining. Unlike Queensland, WA economy is not as diversified. Unless there is significant push by the state to pivot its economy or unless India goes through magnificent construction boom, we struggle to see any upward pressure for Perth.