The two weakest city markets this year, Perth and Brisbane, are poised for a change in status.
I expect them to emerge as the strongest city markets next year.
The two cities have much in common: boosted by the emerging resources boom, CBD office vacancies have contracted and demand for industrial property has grown.
Both are experiencing growing airport traffic from fly-in, fly-out workers. And both have improving sales volumes and rising rents for residential property.
The next stage is an increase in prices. It's a regular pattern in real estate that sales volumes change first and prices follow later. This occurs in both rising and falling markets.
Figures from the Real Estate Institute of Queensland show rising sales activity in Brisbane and across the state in the September quarter.
This replicates patterns in other markets across the nation. Buyers are gradually coming back, a factor confirmed by rising home finance commitments.
Another positive factor is the rise in residential rentals reported in some markets, including Sydney.
To date this has not been reflected in widespread price rises, but that will come in the next phase of this established property pattern.
The REIQ's September quarter report found the number of Queensland house sales rose by 17 per cent on the June quarter.
REIQ chairman Pamela Bennett says it has taken time for markets "to heal from the natural disasters earlier this year". She also warns that "we mustn't get ahead of ourselves given sales activity is still 20 per cent below this time last year".
She also notes that median house prices remain soft. But this is the normal pattern for property markets. Sales volumes turn positive first and prices follow.
In Brisbane City the number of house sales rose 13 per cent but the median house price fell 2 per cent.
In boom town Gladstone, the number of sales rose 50 per cent in the quarter but the median price did not rise. It will be in the figures for the next quarter that we'll see price reaction.
The improvement in transaction numbers has been led by the bottom end of the market, and this is something I'm hearing from other markets across Australia, including Sydney.
There was a 27 per cent increase in Queensland sales below $350,000 in the September quarter.
The other signal that market trends are shaping positive comes from vacancy rates, which have tightened further. Five local government areas recorded vacancy rates of less than 2 per cent in September, while nine other LGAs were below 4 per cent. The vacancy rate in Brisbane City was 2.3 per cent, while Logan City (the southern corridor of the Brisbane metropolitan area) was 1.8 per cent.
The state's tourism centres of the Gold, Sunshine and Fraser coasts, as well as Cairns, are still saddled with an oversupply of stock, the REIQ says.
But central Queensland mining areas are experiencing the opposite, with demand far outstripping supply. The vacancy rate in Gladstone in September was 0.7 per cent.
Perth, too, is poised to return to growth after three years of generally declining markets.
Everything points to a significant upturn, with the greatest resources construction boom in Australian history about to be unleashed.
Perth is already the leading capital city in the office, industrial and hotel markets.
Various global surveys have rated Perth towards the top of the pile worldwide for these market sectors.
Residential property will follow next year. One indicator is data on fly-in, fly-out workers passing through Perth airport.
There were 2.2 million passenger movements directly related to the resources sector in 2010-11, with FIFO numbers through Perth airport already considerably higher than the 2007-08 peak of the previous mining boom. The Perth-Newman route is the fastest growing in the nation.
Andrew Wilson, economist for Australian Property Monitors, says: "Perth has the potential to go on one of its notorious price benders next year. I wouldn't be surprised to see double-digit price growth in Perth in 2012."
