Qld’s next boom region: Investors

There are five Queensland regions that have been identified as “stand-out” investment hotspots and labelled as the next places to buy “before the boom”.

According to InvestorKit’s Overvalued or Undervalued research, the top affordable locations will boom over the next 12 months across capital cities and regional areas.

According to InvestorKit founder Arjun Paliwal, over 80 percent of overvalued cities and regions experienced a housing price decline last year. Over 90 percent of undervalued cities and regions experienced average growth of more than 7 percent.

While the Australian housing market has certainly been tough, our data suggests there are still opportunities to find a growth investment at an affordable price if you look for undervalued markets with solid fundamentals.”

In Queensland, InvestorKit recommends Bundaberg, Townsville, Rockhampton, Warwick and Gatton for investors.

“The local economies of these regions are either strong or strengthening,” Mr Paliwal said.

Their unemployment rates are at their lowest level since over a decade ago

There is a rapid increase in GRPs (gross regional products) and population growth rates in all of them are higher than the last five years.”

The high demand in each of the regions identified contributed to limited supply, and Mr Paliwal added that each town had great growth prospects in addition to being affordable. All five regions have low inventory levels, under three months of stock, indicating high market pressure.

In comparison with pre-Covid times, there is a decline in available stock on the market.”

According to the LGA, Bundaberg is the most expensive; Townsville is the most expensive; Rockhampton is the most expensive.

The median house values at a suburb level in Warwick and Roma were $395,000 and $430,000, respectively.

Compared to Melbourne, the median house price in Brisbane LGA is now $1.1 million.

In Queensland, tight rental markets have created more demand for rentals, according to Mr. Paliwal.

According to REIQ’s Residential Vacancy Report for March 2024, vacancy rates in Queensland were as low as 0%, with rental availability remaining dangerously low across most of the state.

RELATED: QLD vacancy rate “dangerously low”

There is a rapid increase in rents in these regions, according to Mr Paliwal.

The crisis-level vacancy rates in four out of five regions are less than one percent, while the vacancy rate in the fifth region (Gatton) is below the two percent high-pressure benchmark.

We expect the fast-growing rental prices, coupled with the affordable housing prices and high yields, to drive more renters to buy and attract more investors, driving housing values upward.

Recent research by Digital Finance Analytics (DFA) found that close to one million households in Queensland were under financial stress due to the housing crisis and rising costs of living.

More than 320,000 homeowners (more than 45%) in the state were in mortgage stress, spending more than 37 percent of their income on home loan repayments, while nearly 490,000 tenants — 72 percent — were in rental stress, spending an average of 36 percent of their monthly income on rent.

According to Finder, a Queensland school leaver would need to save for 21 years to afford a house deposit.

Graham Cooke, Finder’s head of consumer research, said: “The days when one income earner and a stay-at-home parent could raise a family at home are long gone.”

“Wage growth simply isn’t keeping up with skyrocketing property prices for most people.

“The bank of Mum and Dad makes it easier for some to enter the real estate market, but not all will be able to do so.

According to Paliwal, Queensland remains affordable when compared to other states on the east coast, despite the dire results of both research projects.

The southeast Queensland (SEQ) cities of Brisbane, Gold Coast, and Sunshine Coast are among the most expensive markets in the country.

It is primarily due to incoming migrants from the two major capital cities and overseas that they are so hot.

Prices are approaching the affordability ceiling, which will slow down house value growth.”

Meanwhile, he noted that other parts of the state are more affordable.

According to him, 23 of the 26 SA3 regions outside of SEQ have a median house price under $650,000, while 19 have a median house price under $500,000.

There is much room for improvement in these regions since their last 10-year growth is much lower than the long-term average.

Many of them are very hot due to the combination of affordability, lifestyle, and thriving local economies, so hot that many buyers fear missing out on a great deal.

According to Mr Paliwal, Queensland’s population and economy are among the fastest growing across all states, as well as its property market.

The markets in SEQ and the rest of the state, however, are very different.