In a recent property professionals survey conducted by NAB, Queensland’s housing market has been tipped to lead the country for capital growth over the next two years. This call out comes amidst the continuing concern for housing price softening in New South Wales and Victoria.
300 property professionals were contacted for NAB’s quarterly review. Predictions for rental growth in Queensland are forecast at 1.3% over the next 12 months, equating to an increase of 1.9% in two years.
Nation confidence has dipped but Queensland remains steady
“Overall confidence levels fell to a new survey low, driven down mainly by NSW and Victoria where capital city house prices declined,” NAB Chief Economist Alan Oster said.
With tougher restrictions placed upon investors, demand from these types of buyers has fallen nation-wide. Queensland however is the only state to buck the trend, as the share of sales to that market jumped to a four-year high of 22.8 per cent in the past quarter.
NAB’s report indicates that “this may have reflected anecdotal reports of increased Chinese property investment associated with record numbers of Chinese student enrolments in the state.”
Among other key survey findings, housing demand from first home buyers continued to offset a reduction in demand from foreign buyers in new and established housing markets.
According to Mr Oster, “State government incentives and moderating house prices are likely helping first home buyers move onto the property ladder.”
In a large state, the question is ‘where?’
NAB’s Quarterly Australian Residential Property Survey also revealed certain areas tipped to enjoy above average growth over the next year. These include Brisbane, Cairns, the Gold Coast and the Sunshine Coast, with Coomera and New Farm singled out as suburbs expected to outperform.
Much of this demand is stemming from strong population growth the state is expected to enjoy.
Robert Honeycombe, chairman of the Real Estate Institute of Queensland (REIQ), has said that “Queensland grew by 81,000 people last year, and we were the most popular state for internal migration, growing more than any other state in the year to September 2017.”
International migration also contributed, accounting for 40% of new Queensland residents in the year to September 2017 and adding an extra 31,000 people.
The South East predicted to continue strong growth
According to new data from Ray White Special Projects' latest SEQ Vacant Land Market Report, land prices in Brisbane are up more than 11%.
Ray White Special Projects Qld executive director Mark Creevey has indicated that price growth is likely to continue to firm in south-east Queensland due to the lack of available land for development and developers focused on owner occupied product.
The report shows 10 major Local Government Areas (LGA) working to meet expected population and demand growth. In Brisbane, vacant lots showed a 31.82% rise in the year to December 2017, for instance.
Another Ray White Special Projects Qld executive director, Tony Williams, has cautioned the inaction of some Queensland LGAs. Mr Williams indicated that the inability to deliver approvals in prime development corridors including Caboolture West, Warner and Morayfield has resulted in a dramatic drop in lot approvals by more than 50%.
“If this is not addressed it could potentially have future supply and price implications,” Mr Williams said.
“The number of lots registered has shown a solid increase of 32.38% however this increase is from 11% less projects than the previous year, pointing toward diminishing future supply unless key areas are unlocked.”
Strong government investment in Queensland infrastructure.
Earlier this year, the Queensland Palaszczuk Government announced its plans to roll out over $45 billion worth of infrastructure over the next four years as the state strives to keep up with population growth.
Major projects to receive attention from the funding are the $5.4 billion Cross River Rail, an update of the Bruce Highway, M1 upgrades, and hospitals across southeast Queensland.
Minister for State Development and Infrastructure, Cameron Dick, reported that the planned investment was important for Queensland's expected population rise.
Other projects expected to share some of the light are the Cairns Convention Centre and Townsville Port expansions and the construction of the Townsville Stadium.
“Our population has just reached five million. It will continue to grow by around 100,000 a year over the next 20 years,” Dick said.
“Queensland is the country’s top destination for interstate migration.
“It is essential that a growing state plans for the future and provides the infrastructure needed to accommodate population growth."