What is the outlook for house prices in Perth and Brisbane?

Brisbane and Perth, respectively. There’s no doubt that both cities are rocketing to record real estate prices, but the question on everyone’s lips is: Will they last?

House prices in both cities rose roughly 1.5 times faster than they did the previous quarter and doubled from a year ago, according to the Domain House Price Report.

As a result of that acceleration, Perth’s annual growth reached 23.8 per cent – the highest level in 17 years – and Brisbane’s reached 16.9 per cent. In spite of this, it’s unlikely that boom times will lead to busts.

According to Domain chief of research & economics Dr Nicola Powell, this is the steepest rise Perth has ever experienced.

Despite the fact that this rate of gain won’t be sustainable in the long run, we expect strong growth to continue in the future due to a shortage of stock and strong demand from the population.

The price of houses in Brisbane will also rise, but not at such a high rate as in Sydney. Over the next quarter, they will surpass the $1 million median and it will only take an additional 2.4% increase.”

According to other experts, both cities will continue to offer good returns to investors and excellent capital appreciation for investors, with Perth’s new house price median at $852,240 and Brisbane’s at $976,464.

The population of West Australian state has grown by over 3 percent in the last 18 months, with most migrants settling in Perth, according to Damian Collins, founder of property investment company Momentum Wealth.

Furthermore, the stock is at its lowest level in almost 20 years.

“Our economy here is also very strong, and we have a lot of jobs,” Collins says. “For a long time, Perth’s property was ridiculously cheap, but we’re now rapidly catching up with other capital cities.”

In the long run, it will come back to a more sustainable level – it can’t keep growing at 20 percent a year indefinitely. It is still possible to get a 5 percent yield on rental properties, and rental laws in these states are much more balanced than they are in NSW, Victoria, and Queensland.”

Investors are also attracted to Brisbane, where strong migration is also supporting property prices, as is the infrastructure spending and soaring confidence ahead of the 2032 Olympics.

FW valuers’ Brisbane director, David Notley, says the Brisbane market is expected to continue to be strong, providing that fundamentals do not change, such as an under-supply of stock, corroborating with migration levels that drive up prices.

InvestorKit’s founder and head of research Arjun Paliwal believes most of the growth has come from the lower end of the Perth and Brisbane markets between $400,000 and $800,000.

According to him, higher-end property prices will likely rise in the future.

According to Paliwal, investors in that bracket may well benefit from further price growth between $700,000 and $1.5 million.

Although both cities have seen considerable growth already, there are still pockets that remain fairly affordable, and rents have held steady, so yields have risen as well.”