High property prices in Sydney send investors to Melbourne and Brisbane

As property prices continue to grow in Sydney, agents and developers in Brisbane and Melbourne record an increased number of enquiries by the investors and booming property markets. According to the recent trends, the ever rising property prices in Sydney seems to have put off investors, who are moving north and south in search of lucrative property investments.

RP Data’s “Pain and Gain” report shows that around 8.3 percent of the investment properties, i.e, properties bought for the purpose of investment alone, have been resold at a loss. But in Sydney, the recorded loss is much less at 2.5 percent.

Rental yields for one-bedroom apartments in Sydney are around 5.1 percent. But in Brisbane and Melbourne, the yields have reached 7.2 percent and 6.5 percent, respectively. And the rental yields for two-bedders in Sydney are at 4.7 percent while in Melbourne and Brisbane at 5.5 and 5.9 percent.

Monthly median values at the start of September were considerably high, even though the new monthly reports are due this week. In 12 months up to the month of September, the values of the Sydney property prices rose to 17.6 percent. The value is much higher compared to the 14.6 percent rise in Melbourne and 8.7 percent in Brisbane.

According to some experts, the tapering of the auction clearance rates in Sydney and Melbourne could be a sign of that the market is beginning to ease down.

"We are seeing huge demand from Sydney buyers for Melbourne and Brisbane,” the Sydney Morning Herald quoted John Meagher, 360 Property Group managing director, as saying. “The reason why is pretty straightforward – it's affordable and you can buy a two-bedroom apartment for the same price as a one-bedder in Sydney.”

He also noted that the price difference between Sydney and the other two cities is unjustifiable. Melbourne has been a consistent performer for 10 years while Brisbane represents a great value.

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