House prices are rising faster than they have in over 30 years, with median values up 20.3% over the last 12 months. However, the market is cooling, with national monthly growth staying steady at 1.5%, down from the peak of 2.8% in March. Hobart and Canberra continue to lead the capital markets (up 2.3% and 2.0%, respectively), while Darwin drags behind with prices almost stagnant (up 0.1%). Regional markets are narrowly outperforming the capitals, with combined prices up 1.7% over the month.
Source: Core Logic
Rents have been on a similar trajectory, with the national median up 8.9% over the last 12 months and 1.9% over the September quarter. Interestingly, units have closed the growth gap, holding steady at a 1.9% increase over the quarter. Meanwhile, median house rents, which were up 3.5% over the March quarter, have eased to also be 1.9% over the quarter.
Spotlight on South-East Queensland
The property market is undeniably hot right now and few areas are performing better than South-East Queensland. There are several factors driving this and most market watchers expect the growth trend to continue for the foreseeable future. With that in mind, we wanted to take a closer look at this region and share our thoughts on its investment potential.
The current state of the South-East Queensland property market
South-East Queensland is broadly defined as covering six key areas: Brisbane, Moreton Bay, the Gold Coast, the Sunshine Coast, Ipswich, and Logan. It is an extremely diverse region, encompassing everything from inner city enclaves and iconic beachside locations to traditional suburban areas and major regional centres. However, the region is united by one important thing – significant population growth.
The South-East Queensland region has been one of the biggest beneficiaries of recent population migration. With more people now working from home, many are choosing to relocate to lifestyle locations, like the Gold and Sunshine Coasts. This has increased demand for property in these already competitive areas, placing significant upward pressure on prices.
Brisbane has also seen a significant increase in interest, as many NSW and VIC residents look to migrate North. Freestanding homes in blue-chip areas have been particularly popular, though high-end apartments in inner-city areas have also seen strong demand. The supply of quality properties has been a major issue, further boosting price growth.
Even the inland areas of Ipswich and Logan have seen solid growth, mostly due to their affordability. First home buyers have been particularly drawn to these areas, where family homes are still fairly accessible. This has been further reinforced by significant development in these areas, which has created additional opportunities for both buyers and investors.
What the future holds
Based on numbers included in the most recent Federal budget, Queensland’s population is forecast to grow by over 250,000 over the next four years. And the South-East Queensland region is expected to shoulder the lion’s share of this growth. To cater for this, the state Government has identified multiple “growth zones”, in line with their Shaping SEQ plan.
While these zones are spread throughout the region, two priority areas have been identified. These are Caboolture West in the Moreton Bay area (between Brisbane and the Sunshine Coast) and Southern Redland Bay. Work is underway to open these areas up for development and accelerate the availability of land.
The South-East Queensland region will also benefit from significant major infrastructure investment over the next decade, in preparation for the 2032 Olympics. While much of this will be focused in and around the Brisbane CBD, other parts of the region will also benefit. In addition to creating thousands of jobs, the upgrades to transport and entertainment infrastructure will increase liveability and connectivity.
All this adds up to strong ongoing demand for quality properties, both to buy and to rent. This means plenty of potential for capital growth, particularly in areas with limited supply and through upgrading or renovating. It also means there are many areas where you can expect strong rental returns, even from a more modest initial outlay.
The areas to watch
While the majority of the South-East Queensland region has seen great growth, market performance does vary between different areas. As such, there are some locations better suited to investors than others. There are also a few places investors would be wise to avoid.
If you are considering investing in South-East Queensland, the best location for you will really depend on your strategy. For example, if capital growth is your aim, you may want to target Sunshine Coast suburbs with easy beach access, like Caloundra and Birtinya. Similarly, units in some of the Gold Coast’s most popular suburbs, like Miami and Burleigh Waters, have seen substantial growth.
Or, if you’re after maximum rental returns, quality homes in and around Ipswich and Logan may be more suitable. For example, certain Ipswich suburbs – like Raceview, Redbank Plains, and Ripley – should see you achieve a yield of over 5%. The Logan suburbs of Logan Central, Loganlea, and Jimboomba should also offer similar returns.
All that being said, there are few areas any astute investor would be wise to avoid. This includes some of the highest profile areas of both the Sunshine and Gold Coasts (e.g. Sunshine Beach and Mermaid Beach), which have simply become too unaffordable. Units in popular areas like the Brisbane CBD, and Surfers Paradise and Southport on the Gold Coast, may also struggle to hold value and deliver the desired returns.
Suburb Spotlight: Nambour (QLD)
Located in the Sunshine Coast hinterland, Nambour sits just over 100km North of Brisbane. It is the administrative centre for the region and is only a short drive from some of the area’s best beaches.
Nambour was once a thriving sugar town, but the community took a big hit when the local mill closed in 2003. This had wide-reaching effects, with many jobs (and a lot of money) leaving the town. Signs of this loss can still be seen today, with closed shop fronts dotted along the main street.
However, this is all changing – and rapidly – with Nambour experiencing a major rejuvenation over the last couple of years. Buyers from across the region, and the country, are starting to appreciate the value, views, and lifestyle the area offers. This is bringing new energy and breathing new life into the town.
It is also having a major impact on the local property market. The median house price has increased by over 20% over the last 5 years, and now sits just short of $500k. The median unit price has also undergone significant growth, up over 11% over the last 2 years to just under $300k.
Despite this, the area remains quite affordable by Sunshine Coast standards and is a great option for investors. There is plenty of potential for capital growth, particularly through strategic updates and improvements. The local rental vacancy rate is also very low (currently 0.4%) and you can expect a yield of around 5%.
At Search Party Property, we specialise in developing tailored investment strategies and will work with you to come up with a suitable plan of attack. We also regularly assess your strategy ensuring that it is fit for purpose and delivering the desired results.
