Brisbane prestige market grossly undervalues following data from Urbis

Brisbane’s prestige apartment market is grossly undervalued compared to Sydney and Melbourne with new research showing large price disparities for premium product.

With the property market rising across the country, research and town planning company Urbis says Brisbane’s prestige market is up to a third the value of premium product in Sydney.

“We definitely see plenty of upside for Brisbane’s prestige market given the price disparity we are seeing,” said Paul Riga, director of Urbis (Brisbane).

“With the market in full swing in 2021 we believe Australia’s third largest city is significantly undervalued compared to Sydney and Melbourne.

“When you take into account that the market hasn’t moved dramatically in Brisbane in the latest boom cycle, the strong migration to Southeast Queensland since the pandemic lockdowns, and the likelihood we are going to get the Olympics in 2032, we certainly see plenty of opportunity.”

Urbis research reviewed either recently completed or high-end projects currently being marketed in the three major cities.

It’s data showed a price disparity of up to 35 per cent between premium projects in Brisbane and Melbourne and a staggering 258 per cent differential compared to Sydney.

The research showed Brisbane’s average square metre rate for ‘high end’ product ranged between $9,113 - $15,421 per square metre (average $11,586 per sqm) compared to Melbourne’s $10,056 - $20,771 per sqm (average $14,730 per sqm), and Sydney’s $21,468 per sqm - $55,206 per sqm (average $37,269 per sqm).

“It’s very difficult to make predictions but based on the current trajectory we certainly believe Brisbane has lagged in terms of price growth,” said Mr Riga.

“Over the coming decade we hold a contrary view to that disparity widening.”

Southeast Queensland project marketing specialist Grant Plummer, of GAP development Sales, which have been selling key projects over the 25 years in Brisbane and the Gold Coast, believes the next decade will be Brisbane’s time to shine.

“Sydney and the Gold Coast have really led the top end, luxury downsizer market during the post Covid recovery,” he says.

“But we are certainly seeing developers entering the Brisbane market knowing full well that there the price gap will close over the next decade,” said Mr Plummer.

“New benchmarks are going to be set based on the sheer fact that we are incredibly undervalued.

“Until now the market has been strong in terms of sales but quite static in terms of price growth but we are now beginning to see that change.

“The value proposition not just for prestige apartments and residences, but the Brisbane market in general, is very compelling.”

One new project set to enter the market in coming weeks is Pikos Group’s $200 million luxury Skye Residences one of the city’s most iconic sites at Kangaroo Point.

The project overlooking the CBD skyline earmarked for a luxury resort by luxury Singapore brand Banyan Tree until it was sold to Pikos Group last year.

Skye Apartments will feature a floating 1,000sqm Sky Deck and an iconic new restaurant for the city as well as 70luxury residences targetting the luxury downsizer.

Pikos Group, headed by wellknown Brisbane businessman Pedro Pikos, is one company bracing for Brisbane’s exponential growth.

The company has development portfolio of $1.2 billion including residential projects and a hospital and medical precinct with 25,000 square metres of floor space at Annerley.

“Queensland Government projections estimate Brisbane will need to increase the amount of floorspace needed for medical services by 50 per cent over the next 20 years to meet demand,” says Mr Pikos.

“This is based on a forecast population growth of 2.3 million people in Queensland over this period.

“One can only imagine what this is going to mean for property prices in the long term, but we certainly see upside in high-end, ultra-luxury residences on premium locations like where we are developing Skye.”