Rising property values and increasing competition for stock will drive buyers to more affordable markets such as Brisbane and Adelaide, according to a senior economist.
According to RP Data's Cameron Kusher, increasing competition in Sydney, Perth and Melbourne is driving buyers to slower markets, including capital cities in Queensland and South Australia.
"Competition may drive buyers to more affordable markets such as Brisbane and Adelaide," he said.
"It will be interesting to see if this starts to happen over the coming months."
Mr Kusher’s comments come in light of RP Data’s latest Property Pulse report, which showed Sydney continues to hold the title of the city with the highest median selling prices for homes.
Based on data from July this year, Sydney’s combined house and unit median price was $570,000, which was 16 per cent higher than the median selling price in Melbourne ($492,000), 33 per cent higher than Brisbane ($429,000), 49 per cent higher than Adelaide ($382,000), 15 per cent higher than Perth ($494,600), 87 per cent higher than Hobart ($305,000), 16 per cent higher than Darwin ($490,000) and 14 per cent higher than Canberra ($500,000).
RP Data’s analysis of Sydney compared to other capital cities such as Melbourne revealed the price difference had recently started to narrow. Mr Kusher said while there had been little change over the past year compared to Perth, the gap in pricing between Brisbane and Adelaide had become more significant.
The price gap between Sydney and Brisbane was currently at its greatest level since June 2006, while for Sydney and Adelaide, it was at its widest since the middle of 2007.
Compared with Brisbane, home prices were higher in Sydney (32.9 per cent), Melbourne (14.9 per cent) and Perth (15.3 per cent). The gap in pricing relative to Perth was 15.3 per cent and had been relatively stable over the past year. Adelaide’s median price was 11 per cent lower than Brisbane, though the gap had been quite stable since early 2012.
Adelaide’s home prices have not been higher than any other major capital city since November 2004, when the median house price was 0.4 per cent lower. Mr Kusher noted that there was a significant price gap between Adelaide and Sydney, and Melbourne and Brisbane prices. Perth’s median price was 29.5 per cent higher than that of Adelaide, and the gap had decreased over recent months.
The results also showed there was a significant gap in pricing between Sydney and other capital cities. Melbourne and Perth prices were relatively similar, with a large step down in median price to Brisbane and then a further large gap to Adelaide prices.
“With home values rising at a faster pace in Sydney, Melbourne and Perth than in Brisbane and Adelaide, we expect that gaps in selling prices to increase over the coming months, which may then see a shift in focus to the more affordable markets of Brisbane and Adelaide,” Mr Kusher said.