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DO THE INDICATORS TELL US BRISBANE IS NEXT TO BOOM?

  • November 23, 2017
  • Posted by: Rogers Property Group
  • Category: Latest News
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With the Sydney Property market cooling off after 5 years of solid growth, investors now turn their sites on the Brisbane market in anticipation of the next boom there.

But is this anticipation warranted? Will Brisbane be the next boomer?

We take a look at the stats and cycles today to see whether the next big one will be Brisbane.

There is a few key indicators that we can use that help us identify Brisbane as the next booming property market. In the past these indicators have been quite accurate in pointing towards a large increase in values.

• Annual change in dwelling prices. Brisbane and Sydney

• Percentage value difference between Brisbane and Sydney

• Interstate migration

• Employment

Annual change in dwelling values
The chart above shows the annual change in dwelling prices in both Sydney and Brisbane. It shows that the Brisbane market clearly follows the cycle of Sydney. But there is a time lag there. The Sydney peak of August 1988 was followed by a peak in Brisbane in February 1989. The peak in Sydney January 2002 was followed by a peak in Brisbane in December 2003.
Value difference between Sydney and Brisbane
When the 2 peaks discussed in chart below are looked at more closely, we can also see that the difference between the 2 markets at the times of those peaks was similar. In the Sydney peak of 1988 the difference between it and the Brisbane market was 104% and in 2001 it was 107%. Coincidentally the difference at the moment is around 100%. The long term average is 55% so the market difference is way above average.

 

Migration

Typically migration to Brisbane from Sydney rises when the Sydney market goes through a boom period. This in turn causes the Brisbane market to also increase. Quite obviously, the more people moving into a city means more houses are needed and therefore prices will increase as supply gets pressure.

The chart below shows the migration stats from Sydney to Brisbane. While current migration is not as high as in the previous 2 peaks of ‘88 and ’02, it is still 9% above average.

 

 

Employment

When migrating, employment is a key factor to be taken into account. In Brisbane’s peak times, employment has risen faster than the employment market in Sydney. This is happening again. Since April 2017, the employment market in QLD is rising faster than that of NSW. This can be noted on the graph below.

 

In summary, all the indicators discussed are pointing towards a strong increase in property values in Brisbane in the upcoming months. The difference between the 2 markets is huge with Sydney being almost double what the Brisbane market is. Migration to QLD is also high as is the employment in Brisbane. While nothing is a certainty, we can certainly look at the past to help us predict the future and this is why the smart money is currently flowing into the Brisbane market.