Queensland has been a great hunting ground for property investors over the past decade, with affordable family homes offering good cashflow and plenty of upside for growth.
Much has happened over the past five years, with plenty of headwinds and causes for uncertainty throughout Australia and indeed the global economy.
We’ve had a pandemic, the threat of recession and even a depression, plus a recent surge in inflation that still threatens to spiral out of control.
So, just how well has Queensland performed over the past 5 years, and what does the future hold for the sunshine state?
A recent report by PRD Real Estate found that the greater Brisbane market has had 41% growth since just before Covid.
PropTrack data shows 44% growth over 5 years for the market.
And SQM Research data reveals asking prices for homes in Qld are up by close to 10% year on year, even though rates were being hiked aggressively during that period.
Brisbane and its surrounds had been due for a growth spurt and the lifestyle and affordability on offer lured many families from NSW and Victoria who relocated north and added to the demand for housing.
5 year growth by region
It was a similar story inland from Brisbane in the Ipswich region, with 51% value growth according to PropTrack.
Central Qld was another big performer with an average of 58% growth, while Gold Coast went even better with 63%.
The Sunshine Coast was recently named as Australia’s most popular region for interstate migration, according to the ABS, and 71% growth over 5 years substantiated that data.
Up north, Cairns and Townsville were more subdued with 34% value growth, but there was a significant boost in their economies after Covid lockdowns stopped international travel and domestic tourism demand went through the roof.
The Darling Downs, Logan, Moreton Bay and Mackay regions all had growth in the mid 40% range.
What about the rent?
Rental prices have been on the rise in the last 2 years. To be fair, they’ve been on the rise everywhere in Australia with vacancy rates at record lows. But Qld is one of the states leading the way, with its vacancy rate consistently below 1%, rating only behind Perth as the tightest market week in, week out since 2021, according to SQM Research.
The latest rate for Brisbane and its surrounds is 0.7%, with a median asking rent of $688 a week for houses and $550 for units. These prices are up 9.7% and 18.3% respectively over the last 12 months.
What’s driving the conditions?
The recent value growth can be put mostly down to demand outweighing the supply.
Like the rest of the nation, demand went through the roof in 2020 when the RBA cut the cash rate all the way back to 0.1%.
But as rates have gone up, the market has retained most of its value and after a brief dip has now begun growing again.
Because even though mortgage payments are rising, there are not enough new places being built or made available to rent to satisfy the demand.
Like much of the country, Queensland is behind on its construction targets, as the industry battles headwinds such as inflated costs of materials, labour shortages and supply delays.
Many construction and trades workers have also moved out of the residential space to focus on the government infrastructure that is being built now to enable Brisbane to host the 2032 Olympics. So there is more than enough demand to soak up the limited supply that is available.
Economy still performing
There has been a resurgence in mining projects in parts of the state, while the tourism industry has come back to life after Covid.
Affordability of homes relative to places like Sydney and Melbourne, not to mention the weather and lifestyle on offer, has also sustained strong interstate migration for a number of years, which has put upward pressure on values.
Then there are the first home buyers, who are still being incentivised by the state government in the form of stamp duty exemptions and healthy grants for new properties. This is keeping a floor under values at the lower end of the market.
The outlook is strong for Qld with continued growth expected over coming years, though perhaps at a more subdued pace.