I reckon the experts are wrong on this one… again.
So I reckon the ‘experts’ have it wrong.
In the latest Finder RBA Cash Rate Survey, which polled 40 property experts and economists, Melbourne was the firm favourite to become the nation’s house price leader over the next 12 months:
Experts are predicting the property market to continue to run for the next 12 months, – especially in Melbourne, where a predicted 9% price increase would increase the average home price to $817,114.
The predicted 8% increase in Sydney would see property prices increase another $76,619 on average.
Graham Cooke, head of consumer research at Finder, said that lockdowns seem to have had little effect on house sales.
“The average Sydney homeowner earned more than the median family wage over the last 12 months in property equity alone, and it looks like they are set to repeat that over the next 12,” Cooke said.
Yeah, I’m not so sure. My personal bet is that by this time next year we’ll find that Brisbane is head and shoulders above the other capitals.
(Yes, I’m a Queenslander but I promise I’m not biased.)
Basically, I reckon Brisbane has three factors working in its favour: Price, population, and finance.
On the price front, when you compare Brisbane prices to Sydney prices, the ratio shows that Brisbane is as affordable as it’s ever been.
And when Brisbane has reached that kind of relativity in the past, it has quickly bounced back. So either Sydney prices fall (not likely) or Bribane surges.
I’m betting on surge.
It’s the same story with Melbourne. We’re talking record low relativities.
So Brisbane is cheap.
But it’s also got the population push right now.
Brisbane is one of the few capitals in the country right now where the population is increasing.
Basically, people are bailing on Sydney and Melbourne (in a pretty big way), but Brisbane is continuing to pull people from around the country.
And when you look at the finance data, it shows that mortgage growth is accelerating quickly.
That’s typically a very good leading indicator of prices.
I mean eye-balling that chart, it’s suggesting that we could see price growth in the high 20s sometime in the near future.
Given how cheap the city is, and that the population is still growing, it’s definitely a possibility.
So I’m not with the experts on this one.
I do think Melbourne will come bouncing back, but I reckon 2022 will be all about Brisbane.