Brisbane leads Australia’s property growth charge

The latest figures released by the Australian Bureau of Statistics, show that property markets across Australia remain strong despite the interest rate rises in November.

All cities except Sydney recorded a growth in values over the three and twelve month periods with the biggest surprise being Brisbane taking the lead over the strong Perth market with a 3% rise on the quarter, compared to Perth’s 1.7%.

Perth still had the greatest result for the year, with a staggering 36.9% rise in values, however the slow down in the December Quarter may signal an end to the exceptional results achieved in Perth over the past 2 years.

This is to be expected as Perth follows the natural cycles in Australia, so a slow down was the next logical path. We would expect to see prices hold strongly in Perth as the economic conditions remain very favourable and there still remains a strong inflow of population seeking to benefit from the current employment opportunities.

The East Coast will now become more active as evidenced by the strong performance in the quarter for Brisbane and Melbourne, which are now well into their next growth phases.

Sydney remains a market confused and in a state of change, as it moves from the low or no growth Stagnation phase, into the Moderation Phase of its cycle. Average prices in Sydney remain somewhat deceptive, with the negative growth being driven by the less desirable areas, whilst in the popular suburbs (such as the Northern & Eastern Beaches) prices remain on the rise due to popularity and scarcity.

The latest results support our contentions of Australian property markets having clear and identifiable cycles. You may wish to access our members only Special Reports area, and review the report Understanding Australian Property Cycles, as this will provide a valuable insight into how markets move in Australia.

The growth in the Australian property markets reflects the strong underlying fundamentals, which is underpinned by the continuing high internal migration and population growth trends and steady economic growth.

These have already flowed into rental vacancy rates, which have moved to below 2% in each capital city and evidence is starting to emerge that rental amounts are on the rise due to tenant competition.

The decision by the Reserve Bank of Australia to leave interest rates unchanged at their December 06 and February 07 meetings, has added confidence into the property markets with the prospect of stable or falling interest rates in 2007.

All in all, we can look forward to a strong year of growth across Australia, which may even surpass the 8.3% national average growth achieved in the 12 months to December 2006.

The full December 2006 recent results are detailed in the below table: