CoreLogic Research says house hunters are now focused on Brisbane as southern states lose appeal

House hunters are steering away from Sydney and Melbourne and turning their attention to Brisbane, according to property data group CoreLogic.


Investors are being turned off by affordability constraints in Sydney and Melbourne, and the sentiment that both markets are currently at their peak, CoreLogic head of research Tim Lawless says.

More investors and prospective buyers are now looking at Brisbane, as recent migration growth and improving job prospects make it more attractive, he said.

Queensland's unemployment rate has tumbled in recent months, falling from 6.5 per cent in June to an 18 month low of 5.7 per cent in August, according to the latest data from the Australian Bureau of Statistics.

"I think one of the missing pieces of the Brisbane puzzle up to date has been the fact that there hasn't been much jobs growth," Mr Lawless said.

"This is one of the reasons why we haven't seen Brisbane values growing to the same extent as Sydney and Melbourne, despite affordability and the decent rate of population growth.

"It hasn't been a very strong economy but that seems to be changing now."

In the past 12 months, Brisbane's home prices have jumped 2.9 per cent. That compares to a 10.5 per cent increase in Sydney and a 12.1 per cent rise in Melbourne.

But Mr Lawless said an oversupply of apartments could have investors treading cautiously.

In September, the Reserve Bank of Australia said Brisbane was still at risk of a potential for an oversupply of apartments which would drag property prices lower.

RBA assistant governor Luci Ellis then said second-hand apartments will likely fall in price as tenants move into newly built homes because they are nicer and rent is still low.

Mr Lawless said, while Brisbane is at a higher risk than Sydney and Melbourne because of a substantial uplift in existing unit stock, the threat is starting to subside.

However, traditional detached housing and residential land values in Brisbane are still considered in the affordable bracket and should follow growth trends already experienced in Sydney and Melbourne in recent years.