Brisbane’s median house price has smashed the $600,000 barrier for the first time, and it’s activity at the prestige end of the real estate market that is helping boost property values in Queensland. New figures from the Real Estate Institute of Queensland’s Market Monitor for the December quarter show strengthening sales volumes in Brisbane’s prestige property sector as Brisbane continues to enjoy a strong affordability edge over Sydney.

“Brisbane’s prestige housing sector is firing on all cylinders, with 332 sales recorded in the December quarter - up from 274 sales the previous quarter,” said REIQ CEO Antonia Mercorella. “It’s this increase in $1 million-plus sales that’s driving up Brisbane’s median house price.”

Andrew Coronis, Managing Director of Coronis, said the reason Brisbane’s luxury market was doing so well because Brisbane represents “exceptional value.”

“Money is cheap and Brisbane shows great value to be able to live in Australia’s third largest capital city,” said Coronis. “Top Brisbane properties are more affordable than Sydney and Melbourne. Up until very recently Brisbane had been below the historical high’s for median pricing that had an effect on consumer confidence. Queensland has become attractive for interstate investors who see that it’s just a matter of time before a real boom starts in South East Queensland.”

Mercorella said the Brisbane median house price of $600,000 is well below Sydney’s median of $800,000 and you can still pick up a house in the Queensland capital for under $400,000. “Astute buyers understand there are still relative bargains to be had in Brisbane and they’re deciding now’s the right time to buy,” said Mercorella.

Coronis said he has a 21-year-old nephew in Melbourne who has decided to buy his first home in Queensland because the market is not just more affordable, he also believes it has better future prospects than Melbourne. “This is a 21-year-old from outside the industry who believes his $600,000 investment is better made in Queensland than in Victoria. The secret is finally out!” said Coronis.

Thomas McGlynn, General Manager of Sales Offices in Queensland for McGrath Estate Agents, said we are seeing the $1M-plus sector leading the charge in Brisbane because the city’s luxury market has been under the radar. “We are seeing this sector perform strongly due to the outstanding value that is currently available. Over the past 12 to 18 months we have seen considerable momentum building in the sub-$1M market, while the luxury market in Brisbane has, until recently, gone by under the radar,” said McGlynn. “For buyers in Brisbane that can afford to extend themselves over $1M, they will find more value for money than if they were looking between $750K and $950K. We have also seen an increase in interstate investors who are seeing value in the luxury market in Brisbane, particularly when compared to the Sydney and Melbourne markets. This increase in both local and interstate investor activity has largely driven the resurgence in Brisbane’s luxury market in early 2015.”

McGlynn said more people are buying higher-end homes in Brisbane right now because they’re looking to capitalize on the value of their previous homes. “We are seeing home owners who have benefited from a strong market in the $750K to $1M range looking to capitalise on this and take advantage of the value in the higher end.”

The REIQ data showed a drop in sales in the sub-$350,000 price bracket, which Coronis said was due to first home buyers skipping the low price property market and moving straight up into $450-$600k. “People are wanting more and believe they can afford it. Despite first home buyer affordability being low, the perception of affordability remains. With market confidence being where it is first home buyers are more comfortable purchasing higher value properties because they see property, no matter what, as a safe investment to make.”

McGlynn said there are still areas of the market that are performing strongly sub-$350K, however a major concern in Brisbane at the moment is the oversupply of apartment stock at the lower end of the market. “This is concerning to investors as they are worried about this oversupply continuing with the number of developments that are yet to even be completed,” he said.

Outside of Brisbane, Cairns and Toowoomba were the state’s other star performers, and median house prices in Townsville and Bundaberg also edged up in the December quarter, with sales volumes up on the Fraser Coast.