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Go back only 5 years to 2012 and the talk was that “property price never went up”. Now the talk is that it (Sydney) has gone up too far.

The Reserve Bank and the banking regulator APRA are applying measures to slow the growth in investor lending.

Banks are responding in varied ways that are now favouring owner occupied loans over investor loans

  • This is great news for owner occupiers and first home buyers
  • Serious investors aren’t being deterred – they just factor in the price

To cut through the noise .. owner occupiers were given the last rate cut, investors were not .. it’s not the end of the world

The noise is over what is “causing” property price to rise. I would simply state that property value rises on average per annum between 5-8% (in a cycle that is not uniform) and so it has been for a 100 years (Alan Kohler : ABC economics journalist)

Peter Costello (former Aust Treasurer) states “Negative gearing isn’t causing property price to go up, interest rates are. When interest rates fall, property prices have to go up. The only way to bring down property price is to increase interest rate” (The Australian Fri 17th Jul).  However, as stated by the Reserve Bank, Interest rates are forecast to stay low for the “foreseeable future”.

Here is a property truism of my own, gained from historical data over several property cycles

  • When Brisbane Median House Price is 80% of Sydney Median House Price – it is “overpriced”, and
  • When Brisbane Median House Price is 50% of Sydney Median House Price – it is historically cheap – it’s time to buy.

Sydney Median House Price is now $1million and Brisbane Median House price is still only $490,000

The last time Brisbane was this “cheap” was in 2002.

When Sydney appears expensive buyers shift their focus north (and why wouldn’t you!)

The last time Brisbane was only 50% of Sydney’s signalled the start of a long buying cycle that “ended” when Brisbane hit 80% of Sydney’s.

What does this mean? – history would indicate that Brisbane is at the start of a cycle that may last 3-5 years and end with Brisbane Median House Price at around $800,000.

The message? The time to buy in Brisbane is now.

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Alan Heath… Mortgage Broker Brisbane CBD