Internal migration affecting house prices

Housing has become more affordable in Brisbane and Perth because these cities are attracting fewer residents from Sydney and Melbourne, according to RP Data.

Statistics released last week showed that while prices in Sydney and Melbourne have jumped about 50 per cent since 2009, they have largely tracked the inflation rate in Brisbane, Perth and Adelaide.

Senior research analyst at RP Data Cameron Kusher told Real Estate Business' sister publication, The Adviser, that the two-tiered nature of Australia’s property market was a bit of a concern.

“You typically find Sydney and Melbourne grow first, and then you see Brisbane, Adelaide, Perth growing 12–18 months later. We haven’t yet seen that,” Mr Kusher said.

“This growth phase has been going for 28 months, and I think one of the main factors is we’re not seeing an outflow of residents from NSW and Victoria into other states like we did before the financial crisis.

“If you’ve got a good job and you’re in Sydney or Melbourne, you’re less inclined to risk that and move to another part of the country since the financial crisis, and I think that’s what’s holding back those cities to some degree.”

Mr Kusher said the Reserve Bank appeared to be “blasé” about property price growth.

“What would change things is the introduction of macro-prudential tools like they’re using in New Zealand or the UK to limit how much higher-risk lending banks can do, but to date it's been fairly reluctant,” he said.

“But I think while we have low interest rates … we’re going to continue to see growth in the housing market, particularly in Sydney and Melbourne.”

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