A Comparison of Australia’s Largest Apartment Markets: Brisbane, Sydney and Melbourne

It’s that time of year again. Below we will provide a comparison of Australia’s largest apartment markets and a summary of what can be expected in terms of development in the near future.

Brisbane, Sydney and Melbourne Comparison | Ten Year Sales Cycle

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Prepared by Place Advisory. Source RP Data.

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Apartment Market Overview

  • As can be seen in the above graph, apartment prices in Brisbane, Sydney and Melbourne have fluctuated over the past ten years, with median apartment prices currently sitting at $395,000, $670,000 and $482,500 respectively.
  • As shown above, the Sydney and Melbourne apartment markets have seen a similar trend, particularly over the past six months, whilst the Brisbane market has remained relatively stable.
  • The Brisbane apartment market has seen the highest 12 month growth rate, recorded at 3.4%, followed by Sydney at 3.1%, whilst Melbourne recorded just 0.5% price growth.
  • Brisbane apartments have been, on average, 39% more affordable than Sydney apartments and 13% more affordable than Melbourne apartments over the past ten years.
  • With Brisbane recording a median apartment price of $395,000 for the June 2016 quarter, we are now 70% more affordable than Sydney and 22% more affordable than apartments in Melbourne.

New Development

Thanks to the ongoing media attention, it is widely known that the off the plan apartment market has seen strong growth in recent years, resulting in the number of residential building approvals increasing substantially. Over the past 12 months ending June 2016, apartment approvals represented 57% of total approvals, an increase of 11% in comparison to five years prior. As shown below, the majority of apartment approvals in Australia over the past 12 months occurred in Brisbane, Sydney and Melbourne, accounting for 85% of approvals.

Development Approvals by City

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Prepared by Place Advisory. Source Australian Bureau of Statistics.

Although these markets have seen an increased number of building approvals over the past few years, various factors such as higher construction prices, softening sales rates and tighter lending policies for developers means that not all of these approved developments will be sold and developed in the short term.

Stamp Duty Surcharge

Another issue that is impacting the property industry is the additional stamp duty surcharges that have been introduced by each State Government. With various stamp duty surcharges on foreign investment coming into effect around Australia, Place Advisory has summarised the changes below and we have outlined the implications for foreign investors.

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Impact on Foreign Investors:

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nsw

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As these surcharges have only just been introduced, the effect on the property market is unclear. This will be a topic that Place Advisory covers in future reports.

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