New figures released by RP Data for the 2013 Financial Year show a 5.6% gain in Sydney home values. Breaking these stats down, houses were the better performers at 6.3% growth, while apartments recorded a 2.4% rise.

What interests me even more are the calendar year-to-date numbers. Between January 1 and June 30 this year, Sydney house prices have increased by 4.8% and apartments have grown by 4%. If this same pace of growth continues for the rest of the year, we’ll be looking at close to 10% growth in house prices and 8% growth in apartment prices by Christmas – impressive stuff.

I’m expecting Sydney to make further progress in its recovery this year. We are well past the bottom of the market and sellers have a great opportunity in front of them today. Our agents are consistently recording strong results on good quality properties in good locations. We’re receiving multiple offers on properties and auctions are routinely attracting several registered bidders. Buyer competition is strengthening as more people come off the sidelines after hesitating to make a move in 2011 and 2012.

Brisbane, meanwhile, is only at the very start of its recovery, with the RP Data stats showing an 0.6% growth in home values during FY13 – breaking down to 0.9% growth in house prices and a -1.8% decline in apartment prices for the financial year. Things are looking up though – the calendar year-to-date numbers show house prices are up 0.5% since January, with apartment prices experiencing only a very slight decline at -0.1%.

Sydney and Brisbane are two very important markets right now.  Let’s look at it from an investment perspective. We are at the start of a 3-5 year recovery in both markets. Sydney is ahead, as it always is. While Sydney is an excellent option for long-term wealth creation, Brisbane also has much to offer – especially in terms of affordability.

  • The median house price in Sydney right now is $662,500 and the yield is 4.2%. In comparison, Brisbane’s median house price is $448,500 and the yield is 4.7%.
  • On the apartments front, the median apartment price in Sydney is $500,000 and the yield is 4.9%. Brisbane’s median apartment price is $370,000 and the yield is 5.7%.

The bottom line is, Sydney is more expensive to buy into but will probably deliver better capital growth in the medium term. Brisbane is more affordable and offers a greater yield.

That’s how it is right now. Things might change in the future though, as I expect Brisbane to become a stronger market returning stronger capital growth as more Australians make South-East Queensland their home. More than a quarter of Australia’s population growth over the next 25 years is expected to be in the region from Noosa to Coolangatta and this growth will push Brisbane ahead of Melbourne as the country’s second biggest city.

This is a really exciting time in the property market for Sydney and Brisbane. We are on the cusp of a significant upswing and smart buyers and sellers are taking advantage of this now.