There’s a boom coming to the next Queensland regions for investors
In five Queensland regions, investor hotspots have been identified as the next places to invest “before the boom”.
Based on InvestorKit’s Overvalued or Undervalued research, we’ve identified the top locations set to boom in the next 12 months based on housing affordability.
Our data-driven predictions of overvalued and undervalued cities last year proved accurate, with more than 80 percent of overvalued cities experiencing a housing price decline, while more than 90 percent of undervalued cities and regions enjoyed an average growth of more than 7 percent.
Even though the Australian housing market is going through a rough patch, our data suggests there are opportunities to find an affordable growth investment in undervalued markets with strong fundamentals.”
Among Queensland’s top investment destinations, InvestorKit recommends Bundaberg, Townsville, Rockhampton, Warwick, and Gatton.
“These regions have strong or strengthening local economies,” Mr Paliwal said.
Over the past decade, their unemployment rate has been at its lowest level ever
All of them are experiencing faster growth rates in the GRP (gross regional products) and in population growth rates.”
The high demand in the identified regions contributes to the limited supply, according to Mr Paliwal, who also noted that each of these towns is not only affordable, but also has bright growth prospects. Despite the high market pressure, inventories are really low in each of the five regions with under three months of stock.
In comparison to the pre-Covid time, there is a significant decline in stock available on the market.”
Bundaberg has a median house price of $505,000; Townsville has a median house price of $435,000 and Rockhampton has a median house price of $400,000.
There were $395,500 and $430,000 median house values in Warwick and Roma, respectively, based on suburb-level values.
Melbourne has a median house price of $1.1 million, while Brisbane’s is $1.1 million.
According to Paliwal, there has been an increase in demand in Queensland due to a tight rental market.
In the REIQ’s Residential Vacancy Report for the March 2024 quarter, vacancy rates were as low as 0% in Queensland, with rental availability remaining dangerously low.
In these regions, rents are rising rapidly, Mr Paliwal said.
“Four of the five regions are experiencing crisis-level vacancy rates, while the fifth region (Gatton) is also below the high-pressure threshold of two percent and significantly lower than its last decade average.
We expect the fast-growing rental prices, combined with the affordable housing prices, to encourage more renters to buy and attract more investors, driving housing values higher.”
Nearly one million Queensland households are suffering from financial stress due to the rising cost of living and housing crisis, according to Digital Finance Analytics (DFA).
It is estimated that more than 320,000 homeowners (45 percent) are under mortgage stress, spending more than 37 percent of their income on home loan payments. Nearly 490,000 tenants — a whopping 72 percent — are in rental stress, spending on average 36 percent of their monthly earnings on housing.
According to Finder, a Queensland school leaver would need to save for 21 years to afford a deposit.
In the past, one income earner and a stay-at-home parent could raise a family in their own home, said Graham Cooke, head of Finder’s consumer research department.
There is no way that wage growth can keep up with the skyrocketing property prices for most people.
Despite the fact that some are able to enter the property market easier with the help of their parents’ bank, not all are able to do so.
Despite both research projects’ dire results, Mr Paliwal said Queensland was still affordable compared to other east coast states.
There are a number of expensive markets in the southeast Queensland (SEQ) region, including Brisbane, Gold Coast, and Sunshine Coast.
“The majority of their hotness comes from incoming migrants from the two major capital cities, as well as from abroad.
There will be a slowdown in house value growth as prices approach an affordability ceiling.”
He said that, on the other hand, the rest of the state is much more affordable.
The median house price outside of SEQ in 23 of 26 SA3 regions is under $650,000, and in 19 it is under $500,000.
The growth in most of these regions over the last 10 years was much lower than the long-term average, so they have a lot of catching up to do.
Many of them are extremely hot because of their affordability, lifestyle, and thriving local economy, so hot that buyers are willing to pay much more than the actual value.
According to Mr Paliwal, Queensland’s economy and population are among the strongest performers among all states, as well as its property market.
“SEQ and the rest of the state, however, have very different markets,” he said.