Anything priced below $1 million is hot property in Brisbane.
Analysis of the 10 best and worst performing suburbs over the past year in Brisbane highlights the continued huge demand for units and for houses priced below the city’s median dwelling value of $992,864.
Only two suburbs recorded an annual house value gain of more than 20 per cent, while all ten of the top unit performers did so (as highlighted in the four tables below, provided exclusively to API Magazine by Cotality).
The unit sector has outperformed houses since the beginning of 2024.
Cotality Research Director, Tim Lawless, told API Magazine that Brisbane’s housing value growth trends have been skewed towards the lower quartile and broad ‘middle’ of the market where price points are more aligned with household incomes and borrowing capacity.
“Over the past 12 months, lower quartile house values have recorded a 13 per cent rise while upper quartile values are up a smaller 7.9 per cent.
“A similar trend can be seen across the unit sector where lower quartile values are up 17.6 per cent over the past year and upper quartile values are 12.2 per cent higher.
“Given Brisbane dwelling values have surged 82.5 per cent higher over the past five years, housing affordability has gone from being far healthier than the national average to a market where housing affordability is now stretched, tracking above the national average since mid-2024,” Mr Lawless said.
Median apartment prices in the Queensland capital are now the second highest nationally, after Sydney, while median house prices rank third after Sydney and Canberra.
The Brisbane real estate market’s sustained price growth raises the question of whether an affordability limit will be reached soon to slow it down.
That appears unlikely, according to Will Silk, Residential Research Lead, JLL Australia.
“The Brisbane property market has recorded exceptional price and rental growth over the past three years and continues to display strong quarterly gains among Australia’s capitals.
“Ongoing supply constraints, driven by labour shortages and major infrastructure works, are likely to keep upward pressure on housing.
“While affordability challenges may exclude some buyers, this often redirects demand into the rental market, attracting investors and sustaining prices.
“Overall, unaffordability alone is unlikely to materially dampen Brisbane’s market in the short term.”
The weakest markets for house value growth all have a median value that is above the Greater Brisbane benchmark of $1.09 million.
Continued high demand for those lower priced properties appeared more likely than overall price containment.
“As prices continue to rise, buyer activity naturally gravitates toward more affordable segments of the market and in Brisbane, this has been reflected in greater demand for smaller homes and apartments,” Mr Silk told API Magazine.
“Given these factors, growth in Brisbane’s lower and middle price tiers is expected to continue into 2026, maintaining their leadership in overall market performance.”
George Kafantaris, Managing Director, CBS Property Group, said unit performance is likely to remain solid in the short term.
“Affordability challenges, strong investor interest and reinvigorated demand for well-located medium-density housing continues to support the sector, particularly near transport, universities and major employment hubs.
Mr Lawless, however, questioned whether the pace of growth could continue.
“It’s fair to say the pace of growth is likely to prove unsustainable.
Even if capital growth levels out in 2026, there’s the near-certainty that many suburbs will outperform the wider market and deliver high double-digit growth.
Mr Kafantaris identified seven suburbs he believed would be bright spots in the city next year. They were:
Chermside: A major activity centre with strong amenity, transport access and ongoing densification. Unit yields remain attractive and rental demand is consistently high.
Nundah: Offers excellent connectivity (rail and airport), strong rental demand and low vacancy rates. A historically stable suburb with continued appeal for both investors and young professionals.
Tarragindi: An established, tightly held, family-oriented suburb with limited new supply. It has character homes, good school catchments and steady demand to support long-term growth.
Springwood: A more affordable option with strong growth outlook, improved infrastructure links and amenity upgrades. Appeals to both homeowners and investors seeking value.
Moorooka: Still one of the more affordable inner-south locations with genuine gentrification momentum. Improving transport and lifestyle options provide long-term upside. Flood mapping checks are recommended.
Paddington: A premium, low-supply, character-rich suburb with exceptional lifestyle appeal. Strong demand from professionals and families supports ongoing capital growth.
Oxley: Well-connected via rail and major roads, with improving amenity and comparatively affordable entry prices. Solid choice for long-term investors, though flood risk should always be checked.
Mr Silk said many Brisbane suburbs remained attractive to investors and owner-occupiers, particularly those offering strong connectivity to the central city, established amenities, or lifestyle appeal.
“Inner-city areas and well-serviced middle-ring suburbs generally maintain strong value through market cycles.
“Locations close to transport, employment centres and schools continue to appeal as the city’s population and infrastructure network expand.”
Article Q&A
Why are Brisbane homes under $1 million in such strong demand?
Properties priced below the city’s median dwelling value attract the widest pool of buyers, align better with borrowing capacity, and offer more attainable entry points. This segment continues to record the strongest growth across both houses and units.
Are Brisbane units outperforming houses in 2024–25?
Yes. Unit values have risen faster than house values, with all of the top-performing unit suburbs recording annual gains above 20 per cent. Lower purchase prices, strong rental demand and affordability pressures are drawing more buyers into the unit market.
Is Brisbane’s property boom likely to slow down soon?
Analysts say affordability pressures may eventually temper growth, but ongoing supply shortages, population increases and infrastructure works are expected to keep upward pressure on prices in the short term.
Which Brisbane suburbs are expected to be hotspots in 2026?
Property experts highlight Chermside, Nundah, Tarragindi, Springwood, Moorooka, Paddington and Oxley as likely outperformers in 2026 due to their amenity, connectivity, lifestyle appeal and relative affordability.
Sydney’s property market is among the most expensive in the world, with only Hong Kong outpointing it as the least affordable property market on the planet.
There are few signs of that situation reversing any time soon.
While it is uniformly expensive, with its $1.24 million median dwelling value far beyond the other state capitals, the past 12 months have delivered wildly different results throughout the city.
And for property investors trying to assess which suburbs will deliver the best capital growth prospects over the coming year, it is a disparate list of hotspots that have caught the eye of a range of commentators who shared their forecasts with API Magazine.
Among the ten best and worst house and unit markets (see four tables below, provided exclusively to API Magazine by Cotality) there were some distinct trends that were specific to each housing type.
For houses, both the best and worst lists had a wide range of median prices. While all are expensive by national standards, the fact the biggest price gain over 12 months was for a suburb with a median house price of $845,000 and the third best performer was almost $6.6 million speaks volumes for the fact house prices are not limited to a particular price range.
REINSW President and CEO and Director of BresicWhitney, Thomas McGlynn, said Sydney could not be viewed in isolation.
“Sydney is the country’s most complex property market with many microclimates within it, resulting in a mixed picture across the data.
“Values in Bronte for example, have likely been driven by tightly held, premium properties with water views, while growth in Dulwich Hill on the other hand, is likely an uplift as a result of transport and infrastructure developments,” he told API Magazine.
Among the bottom ten for declining house markets, it was a far more consistent picture with homes comfortably above the median $1,550,563 house price faring poorly. Seven of the top ten were priced in the two millions and all were above the median value.
The best performing unit markets over the past 12 months showed a clear disposition toward the affordable end of the market.
Only three of the best performing suburbs had a median price above $900,000, while all ten of the worst performing unit markets were above that price mark. The median unit price in Sydney is $880,777.
Allen Habbouchi, Principal Licensee – Sydney for aussieproperty.com, pointed to affordability issues holding back the pricier unit markets.
“The trend toward more affordable units likely reflects stronger demand from downsizers and first home buyers, especially given tighter lending conditions for high-value properties.
“Some higher-priced suburbs may have experienced a plateau after strong growth, making more affordable areas more attractive now.”
Arija McQuillan, Buyers Agent and founder of Ari Agency, said overseas migration was also shaping the Sydney unit market.
“Sydney is home to more and more primary residents immigrating from overseas and we are seeing more buyers subject to a tighter budget, which forces them to buy where they can afford and rent where they want to live.
“I have fielded a lot of enquiries from buyers with less than $1 million looking to rentvest in cheaper suburbs so they can still maintain a lifestyle in their ideal location.
“Some of the worst performers are too expensive for people to invest in so it would make sense that the growth in these areas is slow, allowing better purchasing power to those looking for their primary residence.”
Head of Research at Cotality, Eliza Owen, agreed the lower end of the unit market was heated.
“The diversity of markets in the top-performing lists reflects an inflection point in the housing cycle.
“In mid-to-late 2024, middle and low value segments of the Sydney housing market dominated growth, potentially because the combination of high interest rates, cost of living pressures and lower savings pushed buyers to traditionally more affordable markets.
“These include Tempe houses, which is at least relatively affordable for houses in the Inner West, Lakemba, Belfield and Chain Valley Bay in Wyong.
“Laced in with this though are very high-end markets starting to emerge in the top-performers list, like Bronte and Bondi Beach, because of changed conditions in 2025.
“Falling interest rates have historically been relatively quick to take effect in very high-end markets.
“At the low end of the league tables though, you still see the weight of affordability pressures affecting traditionally more expensive pockets of Sydney, and the longer-term trend shows high end units have been less appealing.”
More to market than deposit scheme
A variety of factors were driving the market, but the commentators broadly agreed that the Home Guarantee Scheme allowing first time buyers to pay just a 5 per cent deposit was not a big factor in Sydney.
“I would guess it has had very little impact,” Ms Owen said.
“It’s worth noting the scheme didn’t kick off until 1 October and the Sydney growth had already accelerated to 0.8 per cent in September.
Thomas McGlynn, President of REINSW and CEO of BresicWhitney
“Ultimately we put the acceleration down to other factors like multiple rate cuts, growth in real incomes, tight supply levels and improved consumer sentiment.”
Mr McGlynn said price increases in Sydney are rarely the result of one incentive.
“They remain driven by deeper structural forces, particularly undersupply, across the lifestyle markets.
“Prices at the more affordable end may increase due to more competition between first-home buyers as a result of the scheme but the largest impacts right now are down to sentiment and the timeframe in which many first-home buyers can enter the market.
“We saw similar uplifts in sentiment and perceived opportunity following the interest rate cuts, however these proved to be ‘sugar hits’ rather than long-term shifts.
“More investors are returning to the Sydney market, however not with great force yet,” Mr McGlynn said.
Sydney’s 2026 hotspots
Given the somewhat eclectic performance of Sydney real estate over the last 12 months, where should property investors and prospective buyers be looking if they want to see their investment pay off in 2026 and beyond?
The four commentators API Magazine spoke to come from a range of real estate backgrounds, including data analysis and research, buyers agent, peak body leadership and sales.
For Ms Owen, there were options for all budgets.
“I would still place a bit of confidence in Lakemba, for houses or units, for another year.
“It’s one of the last affordable pockets for Sydneysiders and close proximity to the trendy Inner West makes it an increasingly desirable option for young renters and homebuyers, and the same goes for areas like Canterbury and Campsie, which are well located but still have some bang for buck.
“If you’ve got a big, big budget, the short-term capital growth opportunities seem to be in the North Eastern suburbs pocket of Sydney, with short-term growth currently accelerating in markets like Waverley, Bondi Beach, Bronte and Queens Park.
“Developable, rezoned areas are also good for sellers at the moment, with the likes of St Marys seeing strong sales results in anticipation of the new metro airport line and upzoned land.”
Government and private investment that was transforming parts of the city were the focus for Mr MGlynn.
“We are closely watching suburbs subject to new infrastructure and transport developments, like Dulwich Hill.
“These areas often see increases in new housing supply alongside this, presenting more opportunity for investors, buyers and tenants,
“Areas with a mix of established units and homes that are tightly held, like Strathfield or Willoughby, are likely to attract investor interest.”
Ms McQuillan said she usually advocates for blue chip locations close to the city, while Mr Habbouchi said he would suggest looking at emerging suburbs with ongoing infrastructure projects and good rental demand.
“Areas like Parramatta, Zetland, and Liverpool are benefiting from major developments like transport upgrades and urban renewal, which are expected to drive demand and appreciation amid broader Sydney market forecasts of 5to 8 per cent growth citywide in 2026,” Mr Habbouchi said.
Article Q&A
Which Sydney suburbs are tipped for the strongest property growth in 2026?
Analysts highlight affordable Inner West areas like Lakemba, Canterbury, and Campsie, as well as premium eastern suburbs such as Bondi Beach, Bronte, and Queens Park, for solid short-term capital growth.
Why are Sydney’s affordable suburbs performing better than high-end areas?
Rising interest rates and cost-of-living pressures have driven buyers toward lower-priced markets, while expensive areas have seen slower demand and plateauing prices.
What’s driving Sydney’s current property price trends?
Experts point to a combination of falling interest rates, limited housing supply, and improving buyer sentiment as the key factors lifting prices across the city.
Is Sydney property still a good investment in 2025–26?
Despite high entry costs, Sydney’s long-term fundamentals remain strong, particularly in areas linked to infrastructure upgrades and population growth.
By whatever metric you apply, the Perth property market is on a sustained burst of growth.
Whether it’s the last five years, during which dwelling values have risen by a nation-leading 81.9 per cent, or the latest quarterly data in which it leads the way with capital growth of 3.1 per cent, expectations that the market would stop breaking its own median home price records have proven mislaid.
Towards the end of 2024, the engine room of the Perth real estate market was the outer suburbs.
Back in November, the ten worst performers for house price movements were all inner suburban areas, including Mosman Park’s 7.7 per cent decline and South Perth’s 6.1 per cent house price slide.
The latest data reveals that growth is now more evenly spread.
Outer suburbs are still performing strongly but four of the top ten areas are now closer to the city centre, with South Perth particularly notable for its turnaround, according to Cotality.
Property prices in SA3 areas (larger than suburb category; source: Cotality)
The broadening of the Perth market to one spread more evenly across the city was a trend confirmed by Gabe Hagen, Residential Business Development Manager, Realmark.
“There’s no doubt we’re seeing growth become more evenly spread across Perth, and the numbers tell the story.
“For much of the post-COVID period, the sharpest rent and property price gains were concentrated in outer suburban corridors – places like Baldivis, Rockingham, Wanneroo and Mandurah, where greenfield developments and new estates have been able to deliver stock to meet surging demand.
“Rental bond lodgements in these areas rose by 400 to 1,100 in just 18 months, highlighting how the outer fringe has shouldered the bulk of Perth’s growth.
“What’s changed in the past year is that the inner- and middle-ring suburbs, which had previously been lagging, are now showing renewed momentum.
“The loss of nearly 900 rental bonds in Perth City over the past year has effectively created scarcity right in the heart of the CBD – and scarcity is a key ingredient for future growth.
“This dynamic sets up the inner city for significant upside leading into 2026.
“Even Melville and Belmont–Victoria Park, which have seen steady bond losses, remain attractive for their proximity to employment hubs and lifestyle amenities.
“The combination of falling stock and sustained demand suggests these inner-ring markets will deliver some of the strongest rental and capital growth into 2026,” Mr Hagen told API Magazine.
Source: REIWA. Filtered for suburbs with a minimum of 28 house sales in the year to August 2025 as at 24 September 2025.
Among the hotspots to watch into 2026, according to Paul Wisby, Sales Representative for Bailey Devine Real Estate, were a basket of inner suburban areas.
“Areas like Mount Lawley, Maylands, Inglewood, Bayswater and South Perth should all do well next year and are good examples of suburbs that blend amenity and lifestyle opportunities with easy access to infrastructure and employment hubs.”
Some signs of market cooling
Western Australia was the only state to record worsening affordability in the past quarter, although it remains the most affordable among the major mainland capitals.
WA also ranks second nationally for investor land loan growth (23 per cent) and new dwelling loan growth (14 per cent).
But elsewhere there are some hints that price growth won’t get out of hand and may even cool.
After three years of breakneck gains, Western Australia’s loan market is catching its breath.
Growth in homebuyer lending was flat at 0 per cent, with 40,760 loans issued.
Western Australia also leads the nation in external refinancing for both owner-occupiers and investors, with annual growth of 9 per cent and 26 per cent respectively.
“WA is a market that’s cooling and consolidating,” Money.com.au’s property expert Debbie Hays said.
“Home owners are choosing to improve their properties and optimise their mortgages, while some investors are still taking on new debt and chasing price growth while they can.
“Investor lending in WA is also subdued, rising 10 per cent to 25,178 loans over the year, below the national average.”
Source: REIWA. Filtered for suburbs with a minimum of 28 unit sales in the year to August 2025 as at 24 September 2025.
Unit weekly rents are surprisingly close to those of houses, with the average weekly rent price sitting at $660 for units, just $40 below that for houses. Units are attracting an average rental yield of 5.5 per cent, compared to 4.0 per cent for houses.
Is boom-bust era over?
Julie Kelley, Global Sales and Marketing Manager, aussieproperty.com, said the Perth market had shown signs of breaking away from a boom and bust cycle dictated by the resources sector.
“In the five years that capital growth rates in Perth have outpaced the rest of the country, the iron ore price has fluctuated enormously, peaking around $230-240 per metric ton in mid-2021 before falling to approximately $100 per tonne by mid-2024 and since stabilising in the $100-110 range.
“In that time the city’s property prices have moved upwards independently of mineral price movements, suggesting other factors are now driving the market.
Perth’s property market has massively outperformed the likes of Sydney and Melbourne over the past five years (source: Cotality).
“Perth is attracting new residents based on its great lifestyle and the relative affordability of property compared to other cities.
“WA is the fastest growing state or territory in Australia in terms of population growth, while continued housing supply constraints and high rental demand suggest there’s still room for upward real estate price movement, especially in well-positioned suburbs.”
Asked whether the Perth property market was at its peak, Jennifer Noye, Sales Executive, Edison Property, said it was unlikely to be the case.
“This is a question on everyone’s lips, especially the buyers.
“We expect the market will continue to rise, as we are currently experiencing record low number of listings.
“The government incentives will only bring more buyers to an already heated market, therefore, we believe there is still room to grow.
The growth seems to be in all areas of Perth, both outlying suburbs and inner city.
“Inner city suburbs are all achieving above the sellers’ expectations.
“There is just not enough property available to meet the high demand,” Ms Noye said.
Article Q&A
Which Australian city’s property market has performed best in the last five years?
Whether it’s the last five years, during which dwelling values have risen by a nation-leading 81.9 per cent, or the latest quarterly data in which it leads the way with capital growth of 3.1 per cent, expectations that the market would stop breaking its own median home price records have proven mislaid.
Where are property prices rising fastest in Perth?
Towards the end of 2024, the engine room of the Perth real estate market was the outer suburbs. Back in November, the ten worst performers for house price movements were all inner suburban areas, including Mosman Park’s 7.7 per cent decline and South Perth’s 6.1 per cent house price slide. The latest data reveals that growth is now more evenly spread. Outer suburbs are still performing strongly but four of the top ten areas are now closer to the city centre, with South Perth particularly notable for its turnaround.
What is the median property price in Perth?
Perth’s median house price now sits at $881, 867, while units are at $624,821.
How much does rent cost in Perth?
Unit weekly rents are surprisingly close to those of houses, with the average weekly rent price sitting at $660 for units, just $40 below that for houses. Units are attracting an average rental yield of 5.5 per cent, compared to 4.0 per cent for houses.
There is a chronic housing shortage in Western Australia but UDIA WA is offering up a clear set of actions to deliver more homes, faster.
Governments across the country continue to grapple with solutions to the housing supply crisis that is gripping the nation.
The need to address supply constraints has been ongoing, however, with recent figures from the Australian Bureau of Statistics confirming that Western Australia is the fastest growing state in Australia, and with housing affordability pressures continuing to mount, the need to take action is becoming even more critical.
According to CoreLogic, the median price of a new home in Perth has tipped over $650,000 and the rental vacancy rate is sitting at just 1.4 per cent.
In a bid to unlock much needed housing supply, UDIA WA recently released a report that identifies critical infrastructure requirements across three key growth corridors in Perth, which if funded could unlock land to bring forward supply and ultimately facilitate the delivery of close to 90,000 new homes.
These areas have been identified, because the primary constraint to getting residential land delivered in these areas is catalyst infrastructure such as wastewater pump stations and trunk mains, power substations and feeder networks, and intersection and road upgrades.
The new report builds on work that started with our pre-budget submission to the State Government late last year, which identified enabling infrastructure requirements in several areas.
Land not an unlimited resource
UDIA WA’s state election campaign has also identified how crucial it is that infrastructure coordination, funding and delivery align with development pipeline intentions for undeveloped urban zoned land and potential future urban land.
We are confident that proper coordination would enable early planning and greater certainty for residential projects and more efficient delivery of much needed homes.
The report takes our initial recommendations in the pre-budget submission and our election campaign platform and goes a step further in providing specific detail around what immediate priority enabling infrastructure is required and the initial investment needed within the next term of government, as well as longer term infrastructure requirements.
Excerpt from UDIA WA Growth Areas Infrastructure Requirements Report
The infrastructure requirements identified in this report are items/packages where industry believes there is a direct correlation between the infrastructure funding and accelerated delivery to market, and there is currently no funding committed (unless otherwise stated in the report).
A report like this is also important in highlighting that while there is land in Perth that has been zoned for urban or future urban use, it is not a simple process to bring that land to market and enable the delivery of housing.
Many people in the community have a misconception that urban zoned land is plentiful in a place like Perth, but the reality is, there are a myriad of constraints on this land from infrastructure to environmental issues that need to be addressed. In some cases, those constraints, particularly environmental, cannot be addressed and the land is fundamentally beyond access.
For the specific areas identified in the infrastructure requirements report, it is infrastructure limitations that are the key issue, but addressing these is possible.
To identify the critical infrastructure building blocks for key growth areas, a Working Group was formed with members of UDIA WA’s Infrastructure and Masterplanned Communities committees. It comprised developers, engineers and planners to ensure broad expertise and a holistic view.
The Working Group analysed different development areas across the Perth Metropolitan region which could deliver significant housing supply but that were constrained by a lack of infrastructure.
The intent is for the report to be regularly refreshed for infrastructure requirements in other growth areas, including Yanchep, Wungong, Karnup and the South West region to be considered further.
Infill development challenges
While unlocking new land for housing is one part of the puzzle, delivering housing across a range of areas in Perth is important.
However, the challenges in relation to infill development are different in nature, and our Infill Development and Precincts Committee continues to also identify opportunities to increase the viability of medium and high density infill projects and accelerate the delivery of supply in that sector as well.
Article Q&A
Where in Perth is major infrastructure development required?
UDIAWA’s Growth Areas Infrastructure Requirements Report has identified that an investment of $421 million in strategic infrastructure would unlock land to catalyse the delivery of new homes in North Ellenbrook and Bullsbrook, East Wanneroo, and East Wellard and Mundijong.
What is Perth’s vacancy rate and median property price?
According to CoreLogic, the median price of a new home in Perth has tipped over $650,000 and the rental vacancy rate is sitting at just 1.4 per cent.
Regional Queensland has emerged as one of the best performing property markets in Australia, with rental yields as high as 8.5 per cent, prices at relatively affordable levels and strong capital growth potential.
Gladstone is one of Australia’s most promising regional markets. (Image source: Shutterstock.com)
At the halfway point of the year, regional Queensland is one of regional Australia’s top property markets for 2024.
Regional Queensland was ranked in the Canstar 2024 Rising Stars report by Hotspotting as the top regional market for future growth and also ahead of several of the capital cities on five key market metrics, namely sales activity, recent price movements, vacancy rates, rental growth trends and infrastructure spending.
And it is primed to repeat that performance into the second half of 2024, with prices and rents likely to continue increasing in many regional Queensland markets this year.
There are still plenty of people relocating to Queensland from southern states leading to growing demand for real estate. This is backed up by lending data that shows loans to owner occupiers and investors are at all-time highs in Queensland.
This strong demand is being reflected in price data, with PropTrack figures showing regional Queensland unit prices rose by 12 per cent in the past 12 months and house prices by 11 per cent during the same period.
While regional Queensland markets have done very well since the start of the year, it seems unlikely they will slow anytime soon.
Since the start of 2024, there has been considerable impetus driving the Gold Coast, Gladstone, Townsville, Cairns, Rockhampton and Toowoomba, with growing signs of resurgence in the Sunshine Coast market
For investors, the markets still offer plenty of opportunities. The majority of investors are seeking affordability. According to Australian Bureau of Statistics figures, the majority of investors have incomes below $100,000. This dictates, for many, a purchase somewhere in the range from $400,000 to $600,000, a price range in which many regional Queensland markets sit comfortably.
High rental yields
It’s not just affordability that regional Queensland markets offer but also solid returns for investors with above-average rental yields in many locations.
Gladstone and Kingaroy are perfect examples of this.
Gladstone is one of Australia’s most promising regional markets. It has a diverse range of projects, either underway or proposed, including multiple hydrogen initiatives.
It has become a bustling regional centre with growing job opportunities, leading to a rise in demand for real estate.
House prices in the city remain relatively affordable, with properties ranging from the mid-$300,000s to mid-$400,000s. Rents are on the way up, with median asking rents for houses increasing by more than 16 per cent in the past 12 months according to data from SQM Research.
House rental yields are at a level that will please most investors, with the majority sitting in the 6 per cent range, while unit yields go as high as 8.5 per cent.
Closer to Brisbane, Kingaroy provides similar opportunities.
Despite its proximity to major cities, Kingaroy offers comparatively cheap land, very low vacancies, and rising rents, making it a desirable location for investors and home-buyers.
Its prime location, just two hours northwest of Brisbane, positions it for significant growth in the future.
The region has all the necessary elements for success, such as a favourable climate, a strong farming culture, and convenient trade routes. Its thriving transport and logistics industry, as well as the $31.4 billion Inland Rail Link, further contribute to its appeal.
Additionally, Kingaroy has embraced renewable energy projects, solidifying its position as a promising location for economic growth and future prosperity.
Median house prices start at just $380,000 while yields are all in the mid to high 6 per cent range and median asking rents have increased by 30 per cent in the past 12 months in some of its suburbs and towns.
Those markets alone show that the regional Queensland market has plenty of life left in it, and significant growth potential.
Article Q&A
Is regional Queensland a good property investment?
At the halfway point of the year, regional Queensland is one of regional Australia’s top property markets for 2024. It was ranked in the Canstar 2024 Rising Stars report as the top regional market for future growth and was ahead of several of the capital cities on the five key market metrics of sales activity, recent price movements, vacancy rates, rental growth trends and infrastructure spending.
Are real estate prices rising in regional Queensland?
PropTrack figures show regional Queensland unit prices rose by 12 per cent in the past 12 months and house prices by 11 per cent during the same period.
Australian property prices have “found their groove” in rising by between 0.5 and 0.8 per cent since February, with June delivering another 0.7 per cent increment.
The year’s strong property price growth has also translated into the number of new million dollar median suburbs leaping by 17.5 per cent.
Data released Monday (1 July) by Ray White Group also showed that this benchmark median property price had quadrupled to 857 suburbs since 2014.
The current real estate market strength is largely attributed to the mid-sized capitals of Perth, Adelaide and Brisbane, which have again dominated the capital growth stakes.
CoreLogic’s Research Director Tim Lawless said the market was defying a range of potentially suppressive factors.
“The national index has found a groove, with persistent growth coming despite an array of downside risks, including high rates, cost of living pressures, affordability challenges and tight credit policy.
“The housing market resilience comes back to tight supply levels, which are keeping upwards pressure on values.”
A shortage of homes for sale is overwhelming those variables.
The growth trends are reflected in advertised stock levels.
Over the four weeks ending June, the number of homes advertised for sale in Perth were 23 per cent lower than at same time last year and 47 per cent lower than the previous five year average. Adelaide (-43 per cent) and Brisbane (-34 per cent) are also recording real estate listings that are significantly below average for this time of year.
As these PropTrack property price heat maps show, the former is recording growth of 12 to 26 per cent around the metropolitan area, compared to Melbourne’s uniformly flatlining market locked into a tight range at or close to zero.
The Ray White House Price Report, using independent Neoval data, found Perth’s house median increased 3.6 per cent monthly and 26.7 per cent over the past year. The median has landed at $821,093, which means properties in Perth went up $985.31 a day, over a 30-day month.
Regional South Australia and Queensland have also recorded strong growth conditions, while regional Victorian dwelling values fell by half a percent over the year and regional Tasmania recorded a mild 0.7 per cent rise
Queensland’s continued price explosion has led to first home buyers abandoning hopes of home ownership.
Antonia Mercorella, CEO, Real Estate Institute of Queensland, said the state has the lowest proportion of first home buyers in the country, and first home buyers make up less than one in five loans in the state.
“Relatively affordable price brackets are a magnet for owner occupiers and investors alike, and this broad popularity makes ‘bagging a bargain’ an unlikely scenario.
“Apartments have again forged ahead strongly, notably in the Greater Brisbane areas and relocation hotspots of the Gold and Sunshine Coasts, offering greater affordability, good locations and low-maintenance lifestyle compared to free-standing houses.
“The highest growth for apartments for the quarter was Logan (9.99 per cent) and similarly, Toowoomba apartments stood out in the regions (6.88 per cent) – both markets still sitting comfortably under the half-a-million sweet spot.
“In the housing market, the star performer over the quarter was Gladstone (6.59 per cent), followed by Toowoomba (6.55 per cent), Rockhampton (5.91 per cent) and Townsville (5.27 per cent) demonstrating the continued renaissance of the regions.”
More property price hikes expected
Eleanor Creagh, Senior Economist, PropTrack, said national home prices have cycled through 18 consecutive months of growth to hit a fresh peak in June despite the pace of growth slowing as winter begins.
“Although the number of homes hitting the market this year has lifted, strong population growth, tight rental markets and home equity gains continue to bolster demand,” she said.
“Meanwhile, building activity remains challenged, resulting in the chronic shortage of housing being exacerbated by a lack of new construction.
“Interest rate stability has sustained buyer and seller confidence, while the continuous rise in home prices is motivating many to overcome affordability challenges and transact with the expectation of further growth, and as a result, demand is outpacing supply, pushing prices and rents higher and offsetting the higher interest rate environment.
“From July, tax cuts will lift household incomes increasing borrowing capacities and buyers’ budgets, further supporting price growth.
Although home prices are expected to rise in the coming months, they will likely maintain a slower pace through the seasonally quieter winter period, particularly with increasing uncertainty around interest rates.”
Fitch Ratings has forecast nominal home prices to grow by 4 to 6 per cent in 2024 following likely growth of 9 per cent in 2023 from the trough in January 2023. More modest rises of 3 to 5 per cent will follow in 2025.
Analyst Timothy Groombridge said housing demand is high due to strong net migration and changes in household formation.
“Average household size has trended lower since the pandemic, leading to increased demand for housing.
“The low home listings seen in 2023 are expected to continue as homeowners are reluctant to sell due to fears of being unable to get a new mortgage assessed with high servicing buffers.
“New home construction has been decreasing as high inflation has resulted in increased building costs.
“Affordability constraints due to high home prices relative to income are expected to slow price rises in 2025.
“High interest rates for longer than our expectations may lead to home price movement below our forecast,” Mr Groombridge said.
With property prices showing little overall sign of slowing or retracting, the number of million dollar suburbs is set to rise further.
Atom Go Tian, Senior Data Analyst, Ray White Group, said of the six states and two territories, Queensland is the fastest growing with its count of $1 million suburbs growing by 25 times over the last decade from just seven to 174.
Most of these existing suburbs are in New South Wales, which has at least twice the number of million dollar suburbs as any other state at 358 suburbs as of 2024. Victoria comes in second with 176.
“Assuming the growth rate of the last decade maintains its trend for the next 12 months, we can expect around 99 new suburbs to pass the $1 million mark,” Mr Tian said.
“Thirty of these will come from New South Wales, 24 from Queensland, and 18 from Victoria, which means Queensland has a very high probability of overtaking Victoria as the state with the second most count of million dollar suburbs.”
Article Q&A
Why are Australian property prices rising?
Australian property prices have risen by between 0.5 and 0.8 per cent since February, with June 2024 delivering another 0.7 per cent increment. The current real estate market strength is largely attributed to the mid-sized capitals of Perth, Adelaide and Brisbane, and driven by a lack of properties for sale.
Are regional property prices rising?
Australian regional markets have shown a similar trend to the capitals, with regional Western Australia leading the pace of capital gains with a 1.5 per cent rise in June and 16.6 per cent increase over the financial year. Regional prices lifted 0.6 per cent in June 2024, compared to 0.7 for the capitals.
Home buyers will be contemplating more expensive property purchases with their increased borrowing power, while mortgagees will be hoping to bolster their loan repayments, with the Stage 3 tax cuts coming into effect.
As the new financial year begins, millions of Australians will be feeling a sense of mild relief that they have received a cut to their tax rate.
But as well as having an average of $1,888 extra on their annual income statement, for many Australians it will be welcomed for another reason.
For home buyers, the Federal Government’s Stage 3 tax cuts are set to receive a boost in borrowing power. Those already on the property ladder could slice years off their mortgage.
The tax cuts reduce the 32.5 per cent tax bracket down to 30 per cent and increase the 37 per cent threshold from $120,000 to $135,000.
Source: Federal Government
Additionally, the 45 per cent threshold is being increased from $180,000 to $190,000, and the lowest tax bracket drops to 16 per cent, from the current rate of 19 per cent, for those earning between $18,000 to $45,000.
Individuals earning above $120,000 will see the most substantial tax cuts due to the flattening of the tax brackets and the increase in the threshold for the highest tax rate.
The long political gestation of the tax reform culminated in the delivery of the cuts from Monday (1 July), after the Albanese government adjusted the original ruling Liberal Party’s measures to pare back benefits from the wealthy and bolster savings for low income earners.
Sally Tindall, Research Director, RateCity.com.au, said borrowers should start preparing their budgets for the possibility of not just one, but potentially two more rate hikes before the year’s end.
The tax cuts could both offset and contribute to this likelihood.
Source: RateCity.com.au. Notes: based on an owner-occupier paying principal and interest with 25 years remaining at the start of the hikes on the average variable rate back in April 2022 of 2.86%. Assumes cash rate increases are in August and November 2024 and that banks pass them on in full.
Ms Tindall said that for an owner-occupier with $500,000 debt at the start of the hikes and 25 years remaining, two more rate hikes would add another $150 onto their monthly mortgage repayments.
At existing interest rates, the cuts would still mean, for an average mortgage repayment of $3,681 a month on a $625,791 average loan, the tax cut could potentially wipe out one monthly mortgage repayment per year.
That is based on a dual income family with a combined household income of one person earning $100,000 and getting a $2,179 annual tax and another person earning $80,000 and getting a $1,679 tax cut.
The combined value of the tax cut in this case is $3,858.
As of 1 July, the national minimum wage was also increased by 3.75 per cent. The new rate will be $24.10 per hour.
Greater borrowing power
Helen Avis, Director of Finance, Specialist Mortgage, said the tax regime adjustment means many Australians will see an increase in their disposable income.
“Higher disposable income directly translates to enhanced borrowing capacity for prospective home owners and investors,” she said.
“These savings can significantly impact an individual’s serviceability for a mortgage, as lenders assess borrowing capacity based on net income.
“More take-home pay means borrowers can afford larger loans, leading to an uptick in borrowing power.”
To illustrate, Ms Avis noted that a single borrower earning $100,000 annually could see their borrowing capacity increase by approximately $50,000.
“This substantial boost could be the difference between securing a dream home and settling for a less desirable option,” she said.
Steve Douglas, Chairman, Australasian Taxation Services, said that the broader economic implications could amount to increased activity in the property market.
“The Stage 3 tax cuts are poised to stimulate the housing market by increasing demand through having 13.6 million Australians having some extra real income.”
“When individuals have more disposable income, they are more likely to invest in property, whether it be their first home, an upgrade, or an investment property.”
Mr Douglas highlighted the potential ripple effects on property prices.
“With increased borrowing capacity, we may see heightened competition in the housing market, which could drive property prices up.
Mortgage aggregator Aussie published on its website two examples of how the new tax changes could bolster borrowing power.
One such scenario indicated that single Australians with no dependents earning $120,000 per year in the financial year just concluded, who could borrow a maximum $615,135, will increase their borrowing capacity in Financial Year 2025 by $27,062 on a mortgage, based on a 6.28 per cent interest rate, to $642,197.
Additionally, a married couple with two dependents earning a combined taxable income of $280,000 will increase their borrowing capacity by $75,346 on a mortgage with a 6.28 per cent interest rate in FY25, which is a 5.64 per cent increase on their previous maximum borrowing amount of $1,334,871.
Foreign property buyer numbers have taken off, with international real estate investors shaking off their post-Covid blues and turning their attention to Australia.
Foreign buyers are returning to the Australian property in large numbers, with total transactions soaring by 27 per cent over the previous financial year.
The Australian Taxation Office on Friday (21 June) released its Register of foreign ownership of residential land, which showed that Victoria had become the preferred choice of foreign investors.
Foreign buyers spent $4.9 billion on 5,360 Australian dwellings in the financial year to 30 June 2023 (the most recent data available), with Victorian investment leaping a massive 32 per cent over a year.
Foreign buyers paid an average price of $914,000, which is just below the overall average price across the country of$959,300 in the March quarter, according to the Australian Bureau of Statistics.
The data also showed that buyers were expressing a degree of confidence in the Australian property market, with buyers far outstripping sellers.
They sold 1,119 homes, with a total value of $1.0 billion. It is noteworthy that the definition of sale also includes when a foreign buyer becomes a permanent resident or citizen, even if they don’t actually sell the property, so the actual sales number is inflated against the buyer figure.
The number of offshore buyers in New South Wales was flat, and actually decreased by 1 per cent, from 664 to 656. Meanwhile, the number of buyers in Queensland and Victoria jumped. The number of buyers in Queensland climbed 17 per cent, while the number of buyers in Victoria jumped 32 per cent, by about a third.
Source: ATO
While Queensland attracted more buyers over all, New South Wales attracted more millionaire buyers. Foreign buyers purchased 284 homes in New South Wales during the year that were worth at least $1 million, compared to only 200 in Queensland.
“Victoria got by far the most millionaire buyers, with 569 foreign buyer transactions worth over $1 million each.
Overseas buyers not super wealthy
A widely held perception that foreign buyers are wealthier than local buyers was dispelled by the data.
Residential properties with values under $1 million formed the majority of residential property purchase transactions, accounting for 78.2 per cent of property transactions in 2022-23. This is an increase compared to 75.4 per cent in 2021-22.
Nor did this investment lead to any significant population growth. Of the 5,360 purchase transactions in 2022–23, 164 registrants became a permanent resident or gained Australian citizenship during the year (and are included in these statistics).
Daniel Ho, Juwai IQI Co-Founder and Group Managing Director, said the 27 per cent increase in buying last year shows that overseas buyers were bouncing back after the travel slowdown during the pandemic.
Source: ATO
“Why do foreign buyers like Australia?
“This report, encompasses buyers from all over the world, including all parts of Asia, North America, South Africa, and the UK and Europe, and such a wide population has varying motivations, but they all have some things in common – they appreciate Australia’s strong economy, good education system, and attractive lifestyle.”
“In many cases, these buyers paid 7 per cent or 8 per cent of the purchase price on stamp duty and tens of thousands of dollars, or more, on foreign buyer application fees (compared to local buyers) and once they own their property, at least until they become permanent residents or citizens, they will pay an additional land tax every year.”
Mr Ho said Australia’s apparent popularity was actually reflective of a wider international trend.
“People have been moving to Australia in record numbers, and that shows up in the foreign buyer reports but it’s not just Australia, because we see the same thing happening in the US, Canada, Europe, and the UK.
“There is a significant wave of post-Covid migration as people act on plans they had to put on hold during the pandemic.
“We also see it in Southeast Asian countries like Thailand, which have seen rapid intake of their golden visa programs since the pandemic.
“If the Australian government succeeds in reducing the number of foreign students and other migrants coming to the country, we can expect foreign buying to be affected.”
There are signs that foreign buyers are expanding their search beyond the east coast of Australia.
Victoria, New South Wales and Queensland still represent 86.9 per cent of all sale transactions, making up 91.3 per cent of the value of sale transactions for the reporting period.
But this is down markedly from 2021–22, when Victoria, New South Wales and Queensland represented 97.0 per cent of all sale transactions and 97.8 per cent of the value.
Tracking purchases over five years shows that South Australia features among the top three states, along with Victoria and Queensland, when it comes to transactions on vacant land.
Foreign buyers still a small pool
Foreign buyers comprise just 1.1 per cent of residential property sales across Australia.
Terry Ryder, Managing Director, Hotspotting, told API Magazine, that the latest number actually underlined just how little foreign investment there is in Australian residential real estate.
“There may have been a 27 per cent annual rise in transactions, but that’s from a really low base.
“Foreign buyers have been slugged in major increases in taxes in recent years, a trend that continued with the latest Federal Budget and some of the state budgets.
“It’s resulted in fewer foreign investors compared to historical norms and that has impacted the supply of apartments.
“Foreign buyers were once a major source of off-the-plan sales that allowed high-rise developers to get sufficient pre-sales to secure finance and proceed with a major project.
“Using foreign buyers as a cash cow with no electoral consequences is very short-sighted and has contributed to the rental shortage and the overall undersupply of new dwellings.”
Legal battles may be on the cards after New South Wales deemed its own taxes and surcharges on foreign property buyers were against international legal treaties to which Australia was a signatory along with eight other nations.
Massive taxes imposed on foreign buyers at purchase and in annual land taxes have been scrapped by the New South Wales Government after it was determined they were in breach of international treaties.
For now the other states have refrained from following suit, raising the question of whether legal battles may be looming if the taxes are inconsistent with the international tax treaties to which Australia is a signatory.
The abolition of the foreign surcharges related to residential land purchases apply to residents of eight countries that have a reciprocal arrangement with Australians buying in those nations.
Among them is India, from which a huge number of property enquiries emanate.
Countries exempt from NSW’s foreign surcharges:
New Zealand
Finland
Germany
India
Japan
Norway
South Africa
Switzerland
As Simon Gold, Director, Australasian Taxation Services, explained, the taxes were an enormous impost on foreign buyers and a strong deterrent to purchase in Australia.
New South Wales might now be well placed to attract more foreign investment in Australian residential property.
Mr Gold said there are two state taxes at play here.
“The first is a stamp duty surcharge, which for foreign buyers in NSW is set at a whopping 8 per cent of the purchase price.
“There is then a yearly land tax surcharge too, which for foreign investors in NSW stands at a massive 4 per cent.”
Other states levy a similar burden on foreign buyers.
Victoria and Tasmania are also 8 per cent, with the other states sitting at 7 per cent. There is no stamp duty surcharge in Northern Territory or ACT.
This applies even if the property happens to be exempt from ordinary land tax for example if the property was below the threshold. The other states and territories then range from a land tax surcharge between zero and 2 per cent.
Are foreign property surcharges legal?
Revenue NSW’s website has recently announced it was rescinding the two taxes because they were “inconsistent with international tax treaties entered into by the Federal Government with certain nations.”
“These international tax treaties are related to taxation and other matters and have been given the force of federal law,” the website states.
Mr Gold told API Magazine that it would be interesting to watch how other states responded to the NSW move and whether they could somehow shirk the legal obligations to which the New South Wales Government felt compelled to adhere.
“It’s a good question, and in short who knows?
“As this is a state-based tax, each state and territory has the ability to review , modify and/or repeal this policy independently.
“NSW is the first state to proceed in implementing this change, while the other states and territories have so far decided against repealing the foreign surcharges.
“It will be interesting to see if that is ultimately challenged through the courts,” he said.
Under the new framework in NSW, individuals who are citizens of the above nations purchasing residential-related property or who own land in their own capacity do not have to pay surcharge purchaser duty and surcharge land tax.
Surcharge purchaser duty or surcharge land tax liability for non-individuals, such as corporations, trusts or partnerships that arises because of an entity’s affiliation with these nations may also be affected by the international tax treaties.
The state may now find itself refunding millions in taxes that it has collected against the terms of the treaties.
Refunds may be available for those from one of the nations concerned, who paid surcharge purchaser duty or surcharge land tax on or after 1 January 2021.
Will foreign property investors flock to NSW?
Given the critical rental shortage, encouraging foreign investment in housing (or at least, not discouraging it) would seem a sensible measure to boost supply and help ease what is fast becoming a desperate situation for many Australians trying to find a home in which to live.
While some bemoan the impact of foreigners on property affordability, in 2021-22 foreign buyers represented about 3 per cent of all transactions on new property, and less than 1 per cent of total property sales.
Mr Gold said that with housing affordability a current hot topic, it will be interesting to see if the transaction costs necessary to buy a property appear on the political agenda, whether it be the foreign buyers stamp duty surcharge, or even stamp duty in general.
As to whether the NSW measures will encourage a major influx of investment activity is yet to be seen.
“Ultimately time will tell, however, one would expect that foreign nationals from the eight listed countries may now look to invest in NSW as opposed to other states.
“Anecdotally – and perhaps coinciding with rising rents – a few of our clients from the affected countries have actually reached out expressing their desire to now buy their home as opposed to feeling they need to keep paying rent until such time as their permanent residency application comes through,” Mr Gold said.
Do foreign buyers of Australian property have to pay extra taxes?
Significant surcharges and land taxes are imposed on buyers of residential property in most Australian states, although New South Wales has scrapped this arrangement with eight countries due to legal concerns.
What taxes do foreign buyers have to pay on Australian residential property?
The first foreign buyer tax imposition is a stamp duty surcharge, which for foreign buyers in NSW is set at 8 per cent of the purchase price. There is then a yearly land tax surcharge too, which for foreign investors in NSW for example, stands at 4 per cent. Other states levy a similar burden on foreign buyers.
With Perth property price growth widely tipped to exceed 10 per cent in 2024, Sydney and other interstate and international investors are finding the temptation irresistible and flocking to the city’s real estate.
Sydney, Melbourne and overseas buyers are setting their sights on Perth’s property market, which is widely anticipated to rise by another 10 per cent or more in 2024 after doing the same in 2023.
Properties are selling at a record pace in the West Australian capital, with a median selling time of a lightning quick eight days.
That’s twice as fast as this time last year and is being driven by a chronic shortage of properties on the market.
There were 5,011 listings on www.reiwa.com at the end of October, a 2.7 per cent increase on the 30-year low recorded in September, but 37.4 per cent lower than the same time last year.
Perth is also leading the charge nationally when it comes to property price growth.
While residential property values across Australia experienced a 0.9 per cent increase in October, Perth comfortably exceeded that (1.6 per cent), ahead of Brisbane (1.4 per cent) and Adelaide (1.3 per cent).
The Perth property market’s growth has been steady too, with dwellings rising in value by 4.6 per cent over the past quarter and 10.8 per cent over the past year, which is the strongest annual rise in the nation.
Delivering an Australian property market update in Hong Kong, Steve Douglas, Chairman of SMATS Group and Managing Director of Australasian Taxation Services and aussieproperty.com, said Western Australia’s population growth rate of 2.3 per cent since December last year was the highest in the nation and was driving property prices higher and quicker than anywhere else in the country.
“It’s different to past booms such as the early to mid-2000s in that it isn’t necessarily driven by the resources sector,” Mr Douglas said.
“The economy is strong but the city’s relative affordability is making it increasingly attractive for interstate investors and migrants looking for solid rent yields or, if they’re moving, an unmatched lifestyle that is making people choose WA over other states.”
Mr Douglas added that downsizing retirees were also behind a significant portion of the current growth cycle.
“The biggest thing happening in Australia at the moment is that there is a load of people downsizing in high-pried places like Sydney, in particular, and when they sell the home they have lived in there is no capital gains tax.
“That is creating a wave of Baby Boomer cash buyers undeterred by high interest rates moving to lifestyle-rich and more affordable cities such as Perth to enjoy their retirement.”
Buyers and agents alike are reporting a ‘feeding frenzy’ that is seeing properties advertised for $800,000 going for $100,000 or more extra.
Julie Kelley, Global Sales and Marketing Manager for aussieproperty.com, said the market is moving quickly with it intensifying markedly in just the last six weeks.
“I expect Perth property prices to exceed double-digit growth in 2024.
“We have already seen increases of 5 per cent or more in many Perth suburbs in less than two months, listings are massively down and dwelling approvals remain at decade-low levels, meaning stock availability is a real issue.”
The suburbs that saw the most growth in October were Mosman Park (up 3.8 per cent to $1,910,000), South Perth (up 2.7 per cent to $1,875,000), Manning (up 2.7 per cent to $945,000), Spearwood (up 2.7 per cent to $575,000) and Cooloongup (up 2.5 per cent to $458,500), according to REIWA.
The appeal of Perth to Sydney buyers has a strong financial logic behind it.
Portion of income required to meet home payments
The average Western Australian family contributes 35.0 per cent of their income towards mortgage repayments, compared to homeowners in New South Wales spending 56.0 per cent of their family earnings on mortgage payments.
FOMO taking grip as buyers compete
Backing up the sense of FOMO emerging in the Perth market, API Magazine spoke to a prospective buyer at a home open in Perth’s southern suburbs who spoke of the difficulty of picking up a property in the current market.
“I’ve been to more than a dozen home opens and put several offers in tens of thousands of dollars above the asking price and not gotten anything,” Keith Ashley of Hocking said.
“Agents have told me that in suburbs along the corridor to be linked by the new Thornlie to Cockburn rail line, such as Canning Vale and Jandakot, they have interstate buyers on standby ready to buy anything that becomes available before it goes to market.”
Ms Kelley said there had been an enormous increase of interstate interest in Perth real estate, particularly from Sydney and Melbourne.
“We have also seen a record level of interstate migration.
“Given Perth’s vacancy rate of 0.7 per cent and the difficulty in securing rental properties, so many cashed up eastern states migrants are looking to purchase, although off-the-plan developments haven’t been as popular over the past year due to the risk factors associated with the current state of the building and construction industry.”
“Ultimately, gross rental yields in excess of 5 per cent combined with a high likelihood of significant capital growth are proving too good to resist for interstate, as well as Asian and expatriate, buyers,” she said.
The vacancy rate in Perth has been below 1 per cent since August 2022, and shows no sign of changing in the short term.
Landlords nationally expanding their horizons
New research indicates the distance between where landlords live and where they invest almost doubled in the past year.
Mike Mortlock, Managing Director, MCG Quantity Surveyors, said his company’s latest analysis of their client data showed the average distance between where landlords live and where they invest has reached a staggering 1,502 kilometres to date in 2023. This year’s outcome is a near doubling of the same analysis in 2022, which showed an average of 857 kilometres between a landlord’s home and investment.
He said the rise of Western Australia on property investors’ collective radar was the main catalyst and cited regulatory measures in some other states as one of the propellants.
“Western Australia has become the centre of Australian property investment – there’s little doubt its popularity with real estate buyers from the east coast has increased the gap between home and investment.”
“WA is now considered among the nation’s most investor-friendly jurisdictions.
“Price is a factor too as some big capital city markets are now beyond the reach of everyday buyers but there remains a raft of ill-conceived legislative moves among east-coast political parties that is playing to Western Australia’s advantage.
“Talk among investors is that tenancy legislation, compliance costs and increased tax burdens in our most populous states are forcing their hand when deciding where to purchase or build an asset.”
Article Q&A
What will property prices do in 2024?
Many commentators are predicting Perth property prices to exceed double-digit growth in 2024, driven by downsizers, record migration, low supply and relative affordability.
What is the vacancy rate in Perth?
The vacancy rate in Perth is 0.7 per cent, has been below 1 per cent since August 2022, and shows no sign of changing in the short term.
Why are interstate investors buying property in Perth?
The average Western Australian family contributes 35.0 per cent of their income towards mortgage repayments, compared to homeowners in New South Wales spending 56.0 per cent of their family earnings on mortgage payments. Perth’s affordability and capital growth prospects are a major lure.
Thomas McGlynn, President of REINSW and CEO of BresicWhitney
Property prices in SA3 areas (larger than suburb category; source: Cotality)
