DOES A SLOWDOWN IN THE SYDNEY HOUSING MARKET NECESSARILY MEAN A PICK-UP IN BRISBANE?

The Sydney housing market is starting to slow following more than five years of strong increases in dwelling values.  As the Sydney market slows there could be some upside for other housing markets where capital gains have been more sustainable and rental yields are higher.  Australia’s third largest city, Brisbane, has recently garnered more attention as a candidate for improved housing market conditions.   In this week’s blog we look at the historic relationship between housing market growth in Sydney and Brisbane in order to determine whether the slowdown in Sydney could translate into an acceleration in Brisbane.

The 30 year annual change chart above tends to indicate that after a surge in Sydney dwelling values Brisbane has followed suit thereafter.  Following Sydney dwelling value growth peaking at 61.7% p.a. in August 1988, Brisbane dwelling value growth peaked at an annual rate of 35.3% in February 1989.  Annual growth in Sydney dwelling values also peaked in January 2002 at 20.8% with Brisbane’s rate of growth not peaking until December 2003 at 30.7%.  Keep in mind that outside of these two clear examples, a rise in Sydney value growth has not necessarily been met with a rise in Brisbane (or vice versa).

Source - RP Data

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