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Is Brisbane the New Sydney?

Search any travel guide on Australia and chances are Sydney will be named as the best city to visit. What is there not to love about Sydney? It has two of the most iconic tourist attractions in the world in the Sydney Opera House and Sydney Harbor Bridge. The University of Sydney and the University of New South Wales are among the top 50 educational institutions in the world. Sydney is also widely regarded as the financial hub of the Pacific.These conditions plus a thriving economy, friendly interest rates and a growing population have contributed to the consistent rise of Sydney’s real estate prices. Sydney is currently ranked 4th to 7th in most surveys on the most expensive real estate properties in the world. Yet interest in Sydney real estate continues to grow particularly from overseas markets like China, the US and Singapore.But recent data suggests that property growth in Sydney has slowed down and Brisbane may be the new investment hotbed in Australia. The consensus among market analysts is that Sydney real estate prices have risen to a point that Sydneysiders can no longer afford to buy property.According to MacQuarie Research, when price housing differentials in Sydney and Melbourne have grown to nearly twice that of Brisbane (See Fig.1), it leads to shifts in demand that favor the capital of Queensland. This is because demand for properties in Sydney and Melbourne is no longer sustainable. Fig 1 House price relativities – Price differentials between Sydney and Melbourne, relative to Brisbane, have reached stretched levels, which have historically been followed by multi-year reversions.  Currently, properties in Sydney and Melbourne can purchase 2.2 times and 1.5 times properties...