The upper end of the market in particular is performing strongly, with the latest CoreLogic Hedonic Home Value Index reporting 1.05 per cent growth in the top quartile over the past 12 months, in comparison to Sydney (-8.0 per cent) and Melbourne (-4.1 per cent) which have both reported falls across the most expensive quarter of the market.
Knight Frank’s latest Prime Global Cities Index, which tracks prime residential prices across the world, has again featured Brisbane in the ranking.
According to the report, the prestige market in Brisbane increased 0.3 per cent in the three months to June.
I believe there’s a combination of factors driving Brisbane’s prestige market including a prolonged low interest rate environment, strength in the equities markets, growth in employment and migration (highest net interstate migration since 2005), increased government infrastructure spending, and of course it's relative affordability compared to Sydney and Melbourne.
Major infrastructure projects which are set to change the face of Brisbane are also contributing to it's desirability.
Upon completion in 2022, the $3 billion Queens Wharf project will feature five new luxury hotels; 50 new restaurants, bars and cafes; 12 football fields of public space; a 1500 seat ballroom; an open-air cinema; and a world class casino.
Buyer demand for luxury homes has been improving since 2015 with savvy builders and developers taking advantage and building high-end product to fulfil the pent-up demand.
This gentrification of many Brisbane suburbs, along with new infrastructure, is setting new benchmarks for prices throughout the city.
Downsizers continue to represent a significant portion of the prestige market, selling their larger homes in affluent suburbs 5km - 15km from the CBD for $1 million - $3 million and buying luxury inner-city residences at a similar price point, but with less maintenance and better accessibility.
In the $3 million+ bracket, we are seeing an increase in interstate and international buyers, with Chinese buyers being the biggest players at the prestige end of the market.
Similar to Sydney and Melbourne, supply is not meeting demand with an ongoing shortage of quality homes a key factor supporting property values.
While Brisbane has yet to experience the rate of growth that the southern capitals have achieved in recent years, in the medium to long term I believe Brisbane is very well positioned to play catch up and achieve a much higher rate of growth than it's experienced before.