Forget generic price growth: it's time to take a closer look

Earlier this year, Brisbane's cost of living was reported among the world's highest at 13th, based on a survey by Expatistan – a group that analyses world-wide cost of living data.

In terms of our capitals, Brisbane came in second, behind Sydney (11th); while Melbourne placed 18th, Perth 24th, Adelaide 25th and Canberra 26th.

Yet if we break out housing – a major component of the variables measured in the survey – Brisbane's housing price points may surprise many.

The fact is that the majority of home sales taking place across Brisbane are for a price tag of less than $400,000.

And a similar trend exists across most other Australian capitals as well, including Sydney and Melbourne – also in our regional centres.

While the perception may be otherwise, the reality is that most dwellings sold Australia-wide are for less than $500,000. A third sell for prices under $350,000.

When it comes to buying property, knowledge of location price points can be helpful for investors in terms of making better property choices and maximising future investment returns.

That's because knowing how many sales take place in a particular area and price category, can provide an indication as to how long a property might take to resell; and how much future promotion and resources might be required to achieve that sale.

Price points – along with other key criteria such as value, design, site, supply and demand – are something that investors really should pay more attention to, rather than generic price growth alone.

Another way of looking at price points is to visualise the market as being shaped like a pyramid, where sales volumes are diminishing as prices rise.

The point being that in general, the more you pay for a property, the fewer buyers there are to resell to in the future.

That's not to say that the top end housing market has not seen growth across Australia.

Today, one in 10 of our homes achieves over $1 million on sale, up from 3% 10 years ago.

And one in fifty homes sells for over $2 million, up from 0.7% a decade ago.

In Brisbane, these are the latest dwelling price points:

• Under $400,000 – 38%
• $400,000 to $600,000 – 39%
• $600,000 to $800,000 – 13%
• $800,000 to $1 million – 6%
• Over $1 million – 4%

Investors, especially those just starting out, would be wise to consider buying property in the larger price brackets. The old adage of safety in numbers does apply.

It's important to remember, too, that price movement is not necessarily uniform across a market. Some price points move more than others and will change, depending on the position of the market in the property cycle.

Currently, in Brisbane's recovery market, here's what we are seeing:

• Properties priced below $350,000 have seen a 12% lift over the past three months
• Those priced $500,000 to $1 million have increased more than 30%
• And sales over $1 million are up an impressive 43%.

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