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One of Australia’s big four banks has predicted Sydney property prices will become “relatively” less expensive than those in Brisbane within the next few years.
ANZ head of Australian Economics David Plank’s comments came at the Property Council’s outlook lunch on February 8, when he said the gap between affordability of Brisbane and Sydney would narrow over the next few years.
“Sydney prices are falling whereas Brisbane’s are pretty stable,” he said.
“We’re in the midst of a cycle now that’s going to be reasonably severe in Sydney and Melbourne anyway in terms of prices.”
Social demographer Bernard Salt said when it came to the general cost of living it was plausible to predict there would be “parts of Brisbane” that would become less affordable than “parts of Sydney”.
“The inner city area from Fortitude Valley to Woolloongabba to West End to Milton … in the past … would certainly offer a very high quality of life,” Mr Salt said.
“And in many respects, is better than the equivalent areas of Sydney, which are congested and outrageously expensive.”
But in terms of a general proposition, Mr Salt said Sydney would continue to be Australia’s biggest city.
“The headquarters of most Australian businesses and overseas businesses tend to be located in Sydney,” he said.
“The wages tend to be higher in Sydney and … as long as that dominance is maintained overall, I think the average for Sydney will be higher then the average for Brisbane.”
He said while the gap was narrowing, there was still a long way to go.
“If you live in Surry Hills or Paddington in Sydney you’re got within half an hour the best paying jobs in Australia,” he said.
“Living in New Farm, or living in West End, you can live a very sophisticated, cosmopolitan, global lifestyle.”
Mr Plank said while it was unlikely the “absolute level” of Sydney housing would be more affordable than Brisbane, the boost in interstate migration was changing things.
“A few years ago when Queensland started to come out of its downturn and had very strong employment growth we started to see interstate migration turn around and I think that will continue,” he said.
“Sydney is going to get a loss less expensive relative to Brisbane over the next few years … but it’s still going to remain relatively elevated.”
“The bottom line here is that over the next 25 years Brisbane’s population is going to double … it means that demand for all sorts of property is essentially going to double over the next 25 years.”
Mr Salt said southeast Queensland was set for an extraordinary boom delivered by Baby Boomers selling out of their multimillion-dollar properties.
“(They will be) buying a better property than they had and using the balance to top up their super, or to live a particular lifestyle,” he said.
“There’s five million Baby Boomers, now aged between 55 and 70, the mid point is 63/64, so you could argue that the next five years really is going to be a golden era for retirees, interstate migrants moving north.”