The Australian economy is now in its 16th year of sustained economic growth, fuelled by industrial growth in China, according to a recent report by Knight Frank. The report, entitled 'Australian Prestige Residential Market Spring 2007', also found that unemployment rates in the country remain near 32-year lows, falling from 4.8 per cent to 4.3 per cent since October 2006. Rates remain the lowest in Australian Capital Territory, Western Australia and Queensland, which has led to strong price growth in Perth and Brisbane's property markets.

Data from the Real Estate Institute of Western Australia show that Perth's preliminary median property price for the March quarter reached AUS$470,000, with prices up 2.2 per cent, or AUS$10,000, from the December quarter.

"Drawcards for investors and migrants [to Perth's property market] are the existence of four universities and a modern urban transport system," states the Knight Frank report. "Other attractions are the lifestyle and easy access to Asian markets – Perth is in the same time zone as Singapore, Hong Kong and Tokyo.

"The city had a 'shot in the arm' recently, with BHP Billiton announcing that they are to amalgamate all of its WA operating divisions into a 40,000-square-metre office building to be developed on the old Westralia site at 125 St Georges Terrace. The company is also likely to relocate some employees from Melbourne."

However, the rate of price growth experienced in Perth's property market over the last two years, reaching 50 per cent, is unlikely to continue into the near future. REIWA President Rob Druitt recently told Echoice Home Loans that "we see positive property growth over the next two, three, five years but certainly not at the same rate that we saw in the last two years."

High numbers of British emigrants and Australian inter-state migrants attracted by river and mountain views, proximity to the famous Gold Coast and a booming job market are also pushing up prices in Brisbane's property market.

Latest official figures from The Australian Bureau of Statistics show that Brisbane property prices rose 6.5 per cent in the June quarter, more than double the national average of 3.2 per cent for the same period.

With Brisbane escaping the affects of interest rate rises, which have hit many of the city's southern neighbours, the property building sector grew 17 per cent over the last 18 months, according to a report by ANZ Australian Property Outlook.

Knight Frank also notes that the prestige residential market in the Brisbane region remained strong over the past year, stating that:

"Preliminary figures indicate there have been 136 sales of AUS$2 million or above during the 2006/07 financial year," states the report. "Eight of these sales were above $5 million with the highest recorded prestige residential sale within the Brisbane region an $11.2 million purchase of a residence at Hamilton. In total, a value of $410.9 million in prestige residential sales has been recorded in preliminary figures for the 2006/07 financial year."

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Article first published 11 October 2007