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Brisbane’s high-end residential market saw a positive shift toward the end of last year, according to real estate agency Ray White, which brokered the 2014 sale of an Aaron Avenue home to Gina Rinehart, the wealthiest person in Australia, for $14m.
Last week, Brisbane set a record in residential property with the sale of a Kangaroo Point mansion for a jaw-dropping $18.48m. Overall, the city registered a record number of transactions in homes above the million-dollar threshold last year.
Demand for Brisbane property is particularly strong among Chinese buyers. The city is now the third most searched state capital in Australia on the international Chinese-language property portal Juwai.com. Aside from China, demand for Brisbane homes stems from investors from the United States, New Zealand, and the United Kingdom, according to the Real Estate Institute of Queensland (REIQ).
“We see the gap between Sydney and Melbourne closing in the next couple of years,” said Patrick Hunt, manager at Indigo Building Group. Hunt noted that interstate investors from the southern states had begun their “northern migration,” drawn in part by Brisbane’s more affordable median house price and stronger yields.
“People can’t afford the yield that they’re looking for in other cities; their returns aren’t there,” said Mitch Koper, media manager at CoreLogic. “In Brisbane, you can buy a house for [$600,000] and get a return of 7 or 8 percent in some cases. It’s a very reasonably priced market.”
For all its attractions, growing investor demand has alarmed the Queensland government, which has seen house prices reach unsustainable levels in Sydney and Melbourne. In June, the state government levied a 3% surcharge on foreign purchases, hoping to keep the market from overheating.