High migration to the state is heightening demand for Queensland property, causing vacancies to tighten, especially regionally
Strong migration continues to be the Sunshine State’s trump card.
“Queensland is taking a larger share of interstate migration each quarter,” says Matthew Lewison, director of OpenCorp.
“It has been speculated for a while that the more affordable property price and strengthening employment market would be attractive compared to Sydney’s high cost of living. Statistically, this is now showing up, with NSW having its worst net interstate migration result for 10 years.”
Queensland’s rising population is buoying demand for houses, especially in the southeast. Rental markets across the state have already reported remarkably tight vacancy rates. Pockets of Greater Brisbane – such as Ipswich, Logan, Moreton Bay and Redland – have vacancy rates ranging from 1.2% to 2.5%, according to the Real Estate Institute of Queensland’s (REIQ’s) Rental Survey for August 2018.
In the Brisbane LGA, the vacancy rate tightened over the June 2018 quarter from 3.1% to 2.3%. Nonetheless, local real estate agents consider this market to be fragmented, with some suburbs performing better than others.
Regional areas of the state have strengthened considerably since 2016. REIQ noted that the areas of Toowoomba, Mackay, Bundaberg and Rockhampton, which were struggling previously, all had vacancy rates within the healthy range in June 2018.
Although Townsville and Gladstone are not among those strong performers, both regions are expecting an upswing based on improvements in the local economy.
“The central Queensland location of Mackay is strengthening fast,” says Simon Pressley, managing director of Propertyology. “The combination of a large reduction in the number of properties for sale and an increase in buyers is putting pressure on property prices. Vacancy rates have tightened to 1.8%.”
Low vacancies don’t translate
Despite how tight Queensland’s rental market has become, this has not necessarily favoured investors. CoreLogic’s Total Returns Index for July 2018 indicates that property value growth in the state has stalled, which has caused rental yields to fall.
“With dwelling values now falling and gross rental yields close to historic lows, the total returns from residential housing are not looking so attractive. A greater share of returns is coming from the yield component,” says CoreLogic research analyst Cameron Kusher.
SUBURB TO WATCH
CALAMVALE: Prices slip but market still strong
Situated 18km south of Brisbane, the spacious suburb of Calamvale has had a strong few years; however, prices dipped slightly in the 12 months to July 2018.
While its long-term growth has not been as strong as the house market’s, the unit market is an excellent option for buyers. The median price is low, at $368,301, but still generates an average rental yield of 5.1% from a weekly rent of $385.
Calamvale is surrounded by the suburbs of Acacia Ridge, Sunnybank Hills, Parkinson and Algester. It is close to the Karawatha Forest as well. Calamvale Creek runs through the suburb, linking to the Golden Ponds Wetlands. The wetlands system helps to improve stormwater runoff.
Nature: Calamvale Creek and the Golden Ponds Wetlands are a natural attraction
Location: Calamvale is bordered by many suburbs and is close to the Brisbane CBD