A report highlights the value on offer now in the Brisbane apartment market, reinforcing the notion that 2014 is a great time to buy.

Recent headline making reports in the national media have sensationalised residential markets overheating and oversupplies looming, yet reading beneath the headlines it is clear that the frenzy is due to long pent up demand in the two largest cities — Sydney and Melbourne — where real estate prices have risen on average 52 per cent and 47 per cent respectively since 2009.

Over that same period, Brisbane lagged, not just behind the two eastern seaboard powerhouses, but behind Perth and Adelaide, with a sad six per cent rise in capital values.

International real estate consultancy firm JLL have recently released their Pulse Research Report outlining what is happening in the Brisbane market, and the news is good for investors and owner occupiers.

The report sees a favourable outlook for the Brisbane housing market underpinned by:

  • Strong regional economic prospects
  • Continuing rapid population growth
  • Solid rental growth in many inner city regions, and
  • Comparatively high investment yields – a factor which has been identified by several property commentators.

Historically, there has always been a strong correlation between Sydney and Brisbane prices – Sydney rises and there is a timelag of 12 to18 months before Brisbane follows.

Residential accommodation is cheaper in Brisbane than Sydney, which is logical given size and age difference of housing stock within the two cities.

Recent stronger price growth in Sydney and relatively subdued growth in Brisbane means the differential has widened.

According to RPdata, the median detached house price of $470,000 in Brisbane is 33 per cent below Sydney, with apartments correspondingly 27 per cent cheaper in Brisbane.

Apartments being sold off the plan in new Brisbane inner city developments are priced well below those in Sydney, with starting prices for apartments in inner city Sydney up to twice the price of those in Brisbane.

Developers have recognised that the differential in price between the two cities means that Brisbane becomes attractive to southern city and overseas investors and this is a key time for local buyers to enter the market before the inevitable price growth occurs.

There is also good news on interest rates, which the Reserve Bank has held at 2.5 per cent. Governor Glenn Stevens said in a statement accompanying the recent decision to hold rates “the most prudent course is likely to be a period of stability in interest rates” — flagging that interest rate rises are not on the short term radar.

Moving into the final quarter of 2014 the opportunity to buy at a good price and within a low interest rate environment remains as strong as it was at the beginning of the year.

Local buyers should take a leaf from the history books and realise the time to buy is now, when the differential between prices in Sydney is high and when interest rates are low.