Do you think south-east Queensland will be the best place to invest in property in 2024?

Queensland’s new ‘golden triangle’ has seen a wave of southern investors return due to an infrastructure boom and skyrocketing rental yields.

Located between Logan, Ipswich and Beenleigh, the still affordable hotspot encompasses some of the last remaining pockets in the region where you can buy a home for under $700,000 and rent for $350 per week. Experts say these two key ingredients have driven a 25 percent surge in investor activity each year.

It follows an almost two-year slump fuelled by the 2022 Queensland land tax reforms and rising interest rates, which scared off scores of investors. Instead of just the Queensland land holdings of investors, the reforms – scrapped later that year – would have assessed the land tax rate for investment property across Australia.

As the Sunshine State collects record interstate migration and major infrastructure investment ahead of the 2032 Olympics, savvy Sydney buyers are particularly interested in Brisbane, a city considered one of the nation’s top investment destinations. Rent yields are through the roof in that new golden triangle, and the lion’s share is being attracted there.

Based on Domain’s April Rent Report, Logan City boasts the highest rental yield in south-east Queensland at 7.66 per cent, with median weekly rents rising 20 per cent to $360 per week. Eagleby units ranked second with a rental yield of 6.72 percent, with rents increasing 16.7 percent annually to $420. 

Compared to Brisbane, Sydney’s average unit rental yield is 4.67 percent, while Brisbane’s is 5.5 percent. Domain’s report indicates a national average of 5.1%.

Increasing rents have brought bucketloads of investors back to the capital of Queensland, according to Sam Gordon of Australian Property Scout. 

According to him, there has been a 25 percent increase in investor activity over the past six to 12 months.

“I see Brisbane as having longer-term growth due to the amount of infrastructure being built and the number of people moving there.”.

“They’re looking at spending about $700,000, and that’s why Logan and Ipswich are getting so much attention.

As a result, Brisbane has become one of the top investment destinations. Although Perth is considered the hottest market, Brisbane is hot on its heels… but there is a lot of demand because of those yields, as well as a lot of competition from first home buyers.

According to Gordon, his most savvy investors snag off-market deals on “ugly ducklings” at a time when they could add value.

As a result of population growth and the housing shortage, Brisbane’s economy should remain strong for the next 12 to 24 months.

It’s tough for us right now to compete with client expectations of what they can get for their money due to the fact that what was sold for $500,000 a year ago is now selling for $600,000.”

Investor activity in Zevesto’s sought-after patch has indeed ramped up, but investors struggle to compete with hungry owner-occupiers, said Rob Ford, Founder and Director of Zevesto.

Increasing rents drove the investor crowd – largely from Melbourne and Sydney – and granny flat properties were in high demand.

“Our rental renewals increased by 18 percent across the board, which tells us there is a shortage of rentals … and a huge number of people are moving into South East Queensland, so I believe demand is the driving force,” Ford said.

Although there’s debate about whether rates will rise or fall, investors now have a good deal of certainty.”

There is a high demand for properties with auxiliary units or granny flats in Logan, Marsden, Boronia Heights and Woodridge, according to Ford. Now, they faced a major challenge due to a lack of housing.

There is about a 20 percent reduction in stock levels compared to the long-term average, and that’s consistent across the entire company inventory. As long as demand remains high, the entire industry will be tight.

I would probably invest $500,000 in Eagleby if I had $500,000 to invest right now.”

Although Brisbane’s bargain boroughs are big investors’ magnets, Domain’s Rent Report showed traditional inner-city tenants’ hotspots still offer good rental yields. After climbing 22.8% annually to $700 per week, Brisbane City units sit at 5.97 percent.

Brisbane looks great because interest rates have softened a little bit and rents have increased, which makes it attractive to negatively geared investors, and if you have to borrow less and get a higher yield, you will be making more money,” said Cush.

Investors are returning because the entry barrier has been lowered. Brisbane’s CBD is 15 minutes away, while Sydney’s is 15 minutes away.”

Houses are a hot commodity because of their higher capital gains than units, according to Cush. Nevertheless, he said suburban areas such as Nundah, which were close to the city and had a good housing mix while being close to public transportation, were some of the best places to invest dollars.

With Woolloongabba’s huge transport services and shopping precincts, Chermside was another hotspot where savvy investors had their dollars invested.

A strong Brisbane economy and higher capital gains are spurring investors back into the inner-city property market, according to Ray White New Farm Principal Haesley Cush.

As far as suburbs are concerned, I really like the ones that have infrastructure around the city right now. Conditions are excellent (for investors). In Cannon Hill, there’s a good shopping precinct, and as the city develops, it sits in a sweet spot,” said Cush.

According to Mish Daniel of Revolve Commercial, her team clocked up a colossal investor spike of more than 50 percent over the past two years.

The reason for that might be due to a couple of factors. The city hasn’t traditionally been regarded as a growth capital and Queensland is cheaper than its southern counterparts,” she added.

Investors have found it very palatable because of that. A housing shortage is driving up prices in Queensland and so much unexplored territory is attracting investors.”

There is a larger ‘golden triangle’ between Toowoomba, Sunshine Coast and Gold Coast, which makes it a prime property market for southern punters.

In Toowoomba, we have seen a huge spike in the economy by itself. In addition, there will be a lot of capital expenditures.”