Queensland Property Investment Hotspots Plus Regional Australia
Investment Property in Queensland Proves Popular
Queensland is Australia’s fastest growing state. The growing population is pushed by the interstate migration and foreign investment.
It has been the favourite location for lifestyle, migration, and investment because of its natural allure, attracting more and more investors and new residents per year.
In contrast with other states, Queensland’s population is distributed to different cities, each with diverse natural resources, attractions, and strong economic growth.
The state is known for its very strong coal mining industry and other large industries that include chemical production, power generation, and other energy-related activities that set off the rise in economy and employment opportunities.
Employment is steadily rising as more and more investors are getting involved with the mining industries, and other powerful industries known as the major bloodline of Queensland which also triggers the rise in population and housing demands.
South-East Queensland for Capital Growth
Property powerhouse John McGrath, one of the country’s most successful property mogul’s and founder of McGrath Estate Agents, with 64 offices all over Australia says there’s only one place in all of Australia to be buying real estate right now, and that’s in south-east Queensland.
Right now, you can lock in the cheapest money you have ever been able to borrow. I am telling my clients to buy on the Gold Coast or in Brisbane.
South-East Queensland is my top pick of everywhere to buy in Australia at the moment. For us, I see the golden triangle out to Toowoomba, up to the Sunshine Coast and down to the Gold Coast.
Anywhere in Queensland will do well but I’d be hard pushed to find anywhere better to invest than the south east of Queensland in the next 3-5 years for capital growth. There are great opportunities on the Gold Coast, and there’s a lot of discretionary income.
Mr McGrath, who started his successful real estate group in Sydney 32 years ago, said it’s possible for “everyone in this country to build substantial wealth through property especially in a low-interest-rate environment.
Inner Brisbane will always do well, close to the waterways or close to the CBD, that is the lifestyle element that people love. I have people buying workers cottages close to Brisbane’s CBD at $700,000 for cheaper than you can buy a one-bedroom unit in Sydney.
Property Investment in Queensland Makes Good Sense
South East Queensland property, with prices of houses and units roughly half of what you’d pay in a city like Sydney, look like a real bargain.
According to Domain Group’s chief economist Dr Andrew Wilson, rental yields are much healthier too. Because prices up to now have been a bit flat there, and vacancy rates low while rents are quite moderate, it means yields are higher than in Sydney and Melbourne, he says.
For instance, while rental yields in Sydney are 4.1% for houses and 3.3% for units, on the Gold Coast they’re 4.4% and 5.3% respectively, with Brisbane reporting 4.8% and 5.1%, on Domain Group figures.
Moreover, house rents on the Gold Coast have risen by 2.2%, over the past year against Brisbane’s 2.5% and Sydney’s miserly 1.9%. Unit rents, over the same period, shot up by 5.4% on the Gold Coast, 2.7% in Brisbane and 4%, in Sydney.
The sales prospects of all the developments under construction look even brighter for another reason. The weaker dollar is helping tourism to the region, says Dr Wilson. And the Chinese are now becoming more and more interested in investment there.
Interstate buyers are increasingly interested in South East Queensland too, believes Marwan Rahme, managing director of the finance, wealth advisory, property and capital group of companies, Kanebridge.
He regularly takes groups of investors to Queensland, then puts them in a helicopter to show them the lie of the land.
Investment Property Gold Coast
Despite improving investment credentials across south-east Queensland, property buyers have been cautioned about the potential dangers of jumping into certain markets.
According to managing director of SQM Research Louis Christopher, these areas are not good for novices, first-time property investors.
Rather, they are potentially more suitable for experienced investors who need some diversification, who invest purely on the numbers and can see through the glitz for what it is.
There are many similarities between the Gold and Sunshine Coasts, Mr Christopher said, both in terms of their past performance and future growth prospects.
Similar to the Gold Coast, the Sunshine Coast housing market experienced an extended and acute housing downturn between 2009 and 2013. Prices in some areas fell by more than a third.
A combination of heavily inflated prices due to a 10-year run up (1998 to 2008), elevated unemployment numbers, a big drop in local tourism numbers, higher unemployment and higher interest rates (in 2010) all created the perfect trigger for a property crash.
Future Growth Prospects
I think these areas have strong futures, not just in the long term, but also over the short term, Mr Christopher said he anticipates the Gold Coast will outperform Brisbane
What also makes this part of the world very interesting to invest in is the standard of many of the new projects being built,” says Owen Moore, director of Richardson & Wrench Projects.
You’re seeing a lot of amazing resort-hotel-style developments, with beautiful rooftop pools, gyms, dining rooms and a strong commercial component which appeal to the downsizer market who are really falling in love with them.
We have developers from Sydney saying it’s impossible to replicate those sort of projects because the cost of land and construction costs are so high in Sydney. But on the Gold Coast, you can afford to create these stunning buildings.
Investment Property Sunshine Coast
In a recent Herron Todd White Report, Sunshine Coast (Australia’s 10th largest City) sits well in the property clock to achieve a strong return on your investment.
This need for dwellings under $500,000 is being driven by large new infrastructure program’s and projects totalling Billions of Dollars in landmark catalysts that will change the face and capital value in the Sunshine Coast forever
– Building of the new Kawana Town Centre
– $5.3bn Oceanside Kawana Healthcare precinct
– $2bn Sunshine Coast University Hospital
– $150m Private Hospital
– Maroochydore Principal Activity Centre
– $450m Sunshine Coast Airport expansion and conversion into an International Airport
– Maroochydore building a new city called Sun Central creating around 30 000 new jobs
– $2bn Light Rail proposal
– $350m Sunshine Plaza Upgrade
The Sunshine Coast has around 298,000 residents and growing by around 7,000 new people or 2.39% year on year growing to just under 400,000 by 2026 (only 10 years from now).
The new Harmony master-planned community, where AVID Property Group will deliver more than 4,800 homes for 12,000 future residents which will include open spaces and a GFA Town Centre. Civil works will take a year with home construction to begin during 2017
Sunshine Coast Mayor Mark Jamieson said the start of the $3 billion project would not only deliver quality housing to meet the growing needs of the region but also provide a boost to the local economy through jobs.
Property Investment Brisbane
It’s no secret that residential property has swiftly become the golden goose for investors in Queensland.
Considering that Brisbane has the third highest capital gains in Australia recorded by CoreLogic RP Data over the last year (accelerating to second place in the month up to April!), it’s understandable why so many people are deciding to pour their capital into the real estate market.
Apart from anything else, there’s people pressure. Brisbane’s population is growing at a faster rate than Sydney and Melbourne, says Liz McFarland, developer DevCorp’s sales manager.
Brisbane will experience 44% growth over the next 20 years to reach 3.4 million, which exceeds that expected for both Sydney and Melbourne at 32 per cent and 40 per cent respectively.
Home value growth has been moderating in both Sydney and Melbourne. This is likely due to people heading to greener (and less expensive) pastures, as well as the uptick in building approvals reported by the Australian Bureau of Statistics over the last few years.
The fact that there is such an emphasis on improving housing supply means that most of the capital cities are likely to see real housing values stagnate or fall, according to BIS Shrapnel predictions.
That is, except for Brisbane. By June 2018, BIS Shrapnel has predicted that all capital cities except for the Queensland hub will suffer real price drops of up to 10%, but it looks like Brisbane has plenty to keep its head up about.
Queensland Property Investment: Best 4 Markets
Report reveals the best 4 markets for Qld
Property markets report by property analyst Terry Ryder of hotspotting.com.au, tips Queensland has four of the top ten areas in Australia tipped to outperform the rest of the general property market.
He said all four were considered to have the drivers which would achieve capital growth above the norm in the near future.
Mr Ryder said the Sunshine Coast market, which had struggled in recent years, was set to achieve some growth for the first time in five years.
Having previously been hampered by a struggling tourism economy, an oversupply of dwellings and poor affordability, the coast is heading into a new growth phase.
We are actually seeing a number of markets which are tourism based such as Cairns, Hervey Bay, the Whitsundays and Sunshine Coast, are now starting to come back.
The Sunshine Coast was being helped by multiple factors, the tourism industry was stronger, the market was more balanced in terms of supply and demand, and recent price drops had made it more affordable.
He said Fly in, fly out, workers were settling on the Sunshine Coast and most importantly there is major infrastructure being built there.
Nothing generates property price growth like major new infrastructure, which generates jobs, economic activity and improved amenity for residents.
We believe the best part of the Sunshine Coast for investors to consider is the southern precinct from Kawana south to Caloundra. This is where most of the key new infrastructure is being built.
Emerald and the Galilee Basin
Although the property market in Emerald and the Galilee Basin area were currently in temporary decline, Mr Ryder believed the amount of future infrastructure spending for the area as a result of the mining industry would soon turn that around.
There is up to eight or nine big coal mining projects proposed for the area, you only need one or two of those to happen for Emerald to have a big lift. There is going to be good buying opportunities if you believe in the future of Emerald as we do.
Ipswich was selected as it is considered one of the growth corridors of south-east Queensland and has experienced strong population growth, with about 5000 new residents added every year.
Prices rose strongly in the five years to 2009 (before tapering off) giving the suburbs of Ipswich City the strongest capital growth averages in the Greater Brisbane region.
Many suburbs were still very affordable in Ipswich with East Ipswich, including suburbs such as Booval, Eastern Heights and Silkstone, one of the most underrated precincts in the area.
Big infrastructure developments include the $2.8 billion upgrade of the Ipswich Motorway and the $1.5 billion rail link to the Springfield master planned community, he said.
Toowoomba was identified in the report because it was one of Australia’s strongest regional centres and it benefited from a diverse local economy and closeness to the Surat Basin resources province.
We particularly like places like Toowoomba that get some benefit from the resources sector but don’t depend on it, he said.
Toowoomba has plenty of affordable investment options, a recent survey ranked the city the most affordable place in Queensland, relative to total incomes.
Queensland Property Investment: 5 Most Overrated Areas
Terry Ryder also names the five most overrated Queensland markets to buy in.
The greatest contradiction in real estate is the gap between perception and reality on the best places to buy.
It’s extraordinary how many people cling to cherished beliefs about the superior qualities of locations that don’t deserve it.
A good deal of evidence on this is contained within the latest edition of the REIQ’s quarterly report.
Based partly on this evidence but also on other research, here are the top five Queensland places that don’t deserve their reputation as good places to buy.
This is Australian real estate’s biggest lemon. Somehow Noosa gained a reputation as a great place to invest in holiday homes.
The people who believe this clearly don’t trouble themselves with research. The typical Noosa apartment is today worth 37% less than it was five years ago.
Despite agency rhetoric last year about market recovery, the median unit price is still falling, it dropped 8.5% in 2013. Houses aren’t much better, with a similar decline in 2013 and values are currently 15% lower than five years ago.
If anyone knows about a worse performing market anywhere in Australia, please let me know.
Investors should never go anywhere near this market. Surfers is about speculators and tourists, never a great foundation for a property market.
The average Surfers unit is today worth 12% less than five years ago. And despite all the bullish rhetoric spewing forth from the nation’s propaganda capital, values are still falling. The median price for Surfers Paradise apartments dropped 12% in the December quarter.
The Gold Coast generally
Take a look at where values currently sit, relative to five years ago. Main Beach units: down 19%. Hope Island units: down 21%. Southport units: down 22%. Hope Island houses: down 38%. Broadbeach Waters houses: down 15%. Runaway Bay houses: down 15%.
There are now signs of improvement on the Gold Coast and inland housing suburbs, in particular, are starting to return to price growth.
But there is every indication the Gold Coast will fall into the same trap that has hindered it in the past: a chronic oversupply of high-rise apartments, which drags down the whole city market.
Now that developers have discovered their version of heaven on a stick, poorly-informed Asian investors, we’re going to see another development frenzy. If insanity is repeating the same mistakes again and again, the Gold Coast is the nuttiest place in the nation.
Brisbane CBD apartments
Marketing agents are hyping up the rising sales of inner city units in Brisbane, but I would urge investors to approach with caution. Vacancies in the CBD are above 6% and rising, and most of the near-city suburbs have vacancy rates above 4%.
High vacancies cause rents to drop and property values inevitably follow. It’s not yet as bad as Melbourne’s insane surplus, but it’s heading in that direction. Brisbane developers are chasing the same Field of Dreams as their Melbourne buddies: build it and the Chinese will come.
Back in the 1980s when the Japanese were invading tropical north Queensland and Christopher Skase was trying to redefine luxury in hotels, Port Douglas became the next big thing.
It never delivered on the hype but it somehow retains its status (with some, at least) as an exciting place to pour your life savings.
People still ask me whether “it’s still a good place to buy”. In reality, it never was, and it certainly hasn’t been lately, despite the lovely environment and proximity to the reef and the rainforest.
Here’s some raw data on the Port Douglas market:
- The median unit price has fallen an average 6% per year over the past five years and the median is now down to $220,000.
- The houses market has dropped 6% per year over the past three years.
- The typical Port Douglas house today is worth 26% less than five years ago.
- A Port Douglas house typically spends over a year on the market before selling, according to Australian Property Monitor.
But none of that will stop people continuing to buy in these places, especially if they read that everyone else is.
Queensland Property Investment: Mount Isa City
Mount Isa North-West QLD
Mount Isa has had an impressive history of growth which has been underpinned by the solidity of the Mount Isa mine as the largest local employer. Mt Isa is also the major administrative and financial centre for North-West QLD.
The Mt Isa region has projects with a potential value of over $5 Billion at various stages of development, including 7 copper mines, 2 lead mines, 2 zinc mine projects, 1 phosphate and 1 uranium mine. (Quote Bureau of Resources and Energy Economics, Resources and Energy Sector October 2012 Australian Government)
Plus there are 12 confirmed potential uranium deposits in this region. Its population over the last 5 years has grown by 3.1%pa nearly double the national average. Additional growth is predicted and estimated due to the solid additional investment in the area.
Best Mining Towns, Trends
Westpac’s City Versus Country Investment Snapshot reveals that despite the downturn in the mining industry, Mount Isa and Mackay investors are enjoying top returns.
Mount Isa Investment Opportunity
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Australian Property Investments: Top 5 Towns
Top 5 boom towns for property investment in Australia
Coastal centres feature prominently in the latest list of boom towns and have all the credentials for residential property investment the regional centres, property analyst Terry Ryder said
While their coastal locations may mean they were really considered just holiday or tourist destinations a few years ago, new infrastructure and more diversified economies mean they are now poised to become economic powerhouses within their regions
Mr Ryder said the coastal towns which made his top five had moved on from just being holiday destinations.
Sunshine Coast Hotspot
The top pick by Mr Ryder was Queensland’s Sunshine Coast.
He said it had strong population growth, a $150 million private hospital major upgrade to the Sunshine Plaza shopping centre, $2 billion University Hospital and a $450 million airport upgrade among other major projects.
The market had returned to growth for the first time in six years after being held back by a struggling tourism economy.
The market is being helped by multiple factors (now). House prices in many of the Sunshine Coast suburbs are still at affordable levels, and nothing supports property price growth like major new infrastructure, he said.
Second on the list is Albury-Wodonga on the New South Wales and Victorian border.
It also had steady population growth and a diverse economy according to Mr Ryder.
He said big projects on the cards included plans for a new town of 35,000 and $1 billion in developments.
Construction employs about 2300 people in Albury-Wodonga and the figure is expected to rise in the next few years, he said.
Another coastal region, Cairns was third on the list.
Mr Ryder said its pluses were a $1 billion airport, Chinese investment and tourism and a $110 million port project.
Cairns is making an economic comeback, with spin-offs for its property market, Mr Ryder said.
Newcastle in New South Wales made the list with $3 billion in residential construction, the world’s largest coal export port, the $1.4 billion Hunter Expressway and $350 million revitalisation works of the Newcastle CBD.
Newcastle has a rising economy and property market, having benefited from major new projects in the city and the nearby Hunter Region.
The city has delivered solid capital growth over the past three years and in the past 12 months some Newcastle suburbs recorded double-digit median price growth.
Port Macquarie Hotspot
Port Macquarie in New South Wales came in fifth on the list for a number of reasons including the $105 million base hospital expansion, growing tourism industry, and a large amount of infrastructure spending, including $1.2 billion on the Pacific Highway near Port Macquarie.
Mr Ryder said the coastal towns which made his top five had moved on from just being holiday destinations.
He said it you looked at how those markets had performed for the last five or six years you would initially think they were not a good investment option.
But it is the future that matters, not the past, he said.
They are on the list – because we think they have the most compelling growth factors among the regional centres for various reasons.
Australian Property Investing: Best Places Generally
The best places to invest in property
Regional towns with strong economies, Brisbane and several tourist hotspots in Queensland are among the property markets in Australia showing promise, say experts.
With prices peaking in many parts of Sydney and Melbourne, Canberra facing an oversupply of housing and Perth running out of steam, post-mining boom, Robert Mellor, managing director of research group BIS Shrapnel, is predicting big things for Brisbane.
He suggests buying in established suburbs five to 10 kilometres out of Brisbane’s CBD, and avoiding large apartment towers being built in the heart of the city.
Likewise, Mr Mellor, along with other experts, also recommends steering clear of high-rise apartment complexes in Melbourne and Sydney’s CBD, warning of potential oversaturation of the market.
Back to Queensland, and Mr Mellor believes tourist areas which have been slow in recent years, such as Cairns, the Gold Coast and the Sunshine Coast, could also see price rises.
Cairns is likely to see solid recovery, but not as significant as Brisbane or the Gold Coast or the Sunshine Coast, he says.
John Lindeman, director of research firm Property Power Partners, believes areas such as Cairns (the closest Australian airport to many Chinese cities) will benefit from the predicted boom in Chinese tourists.
He says areas such as WA’s Margaret River region and South Australia’s Kangaroo Island could also see strong boosts in tourist numbers, along with the Gold Coast, which he says has “been languishing for a long time”.
Mr Lindeman says the boost in Chinese tourists, helped by the falling Aussie dollar, will bring more tourism workers to those areas, who will need somewhere to live.
Meanwhile, he believes that prices on the periphery of capital cities will see growth, as first-home buyers get pushed out of more established suburbs by sky-high prices.
At the other end of the market, many baby boomers looking to retire in the next few years will sell their ‘nest egg’ to fund their retirement, he says.
One-third, of housing stock, is owned by people who are 55 and over.
Many are likely to move to cheaper areas two or three hours from capital cities, boosting prices in those areas, he predicts.
The south coast of New South Wales, or areas in Victoria such as the Mornington Peninsula, East Gippsland or the Yarra Ranges, may benefit.
Property Investing In Regional Australia
Mark Kelman, who owns 15 investment properties and authored the book Become a Property Millionaire in your Spare Time, believes it’s going to be a big year for regional areas.
I reckon all the regional areas that have a reasonable economy are actually going to start moving, he says.
Mr Kelman believes investors will turn their attention from chasing capital growth in the cities, to cash flow positive properties in regional centres.
He recommends researching towns that have “good, multiple sources of employment” and populations of more than 10,000 people – preferably growing.
Anything with upside, such as new roads being built, new shopping centres, or companies moving there, might show promise.
Mr Mellor says markets that have lagged behind Sydney, such as Wollongong and Newcastle, will continue to see solid growth, and probably outperform Sydney in the next two to three years.
The south-west coast of Western Australia may see a rise, while regional Victorian towns such as Bendigo and Ballarat may get a boost off the back of an improved regional rail system.
Do your own research
Meanwhile, Mr Kelman recommends doing your own research by inspecting a number of properties, talking to the local council about projects underway, and speaking to locals including real estate property managers to find out the types of properties people want to rent in the area.
Whenever you buy property you’ve got to take into consideration who’s going to rent it and who’s going to buy it from you, he says.