In recent years the Queensland property market has delivered modest capital growth for houses and very poor capital growth for units.
Overall, the demand for apartments among owner-occupiers in QLD is low.
Also, in addition to APRA’s lending restrictions, units in some suburbs in QLD are also subject to voluntary lending restrictions by the major lenders, such as lower loan-to-value ratio.
The QLD market greatly varies between its high and low-performing areas.
This includes the mining towns in Central and North QLD versus houses in popular beachside suburbs on the Gold Coast and the Sunshine Coast that have delivered strong capital growth.
With growing housing unaffordability across Australia and good population growth and healthy rental returns, South-East QLD has become an attractive market for both home buyers and property investors.
Inner-city units continue to perform badly.
PROJECTION
Queensland is likely to deliver improved economic growth in the medium to long-term.
With the government taking steps to attract significant private investment, particularly in the SouthEast QLD is in a better economic position.
The state also enjoys strong population growth.
With strong levels of interstate migration, houses are likely to experience sustained demand, particularly in the more popular suburbs, such as beachside areas on the Gold Coast and the Sunshine Coast.
Queensland is experiencing an oversupply of units in many areas.
Supply has significantly exceeded demand in areas such as central Brisbane, making these dwelling types less popular (particularly in areas such as Brisbane Inner City).
However, the growth is projected to be greatly varied across the state.
Mining towns still present a higher level of risk to deliver poor capital growth.
In the recently released Quarterly Riskwise Residential Risk and Opportunities Report houses in QLD have been upgraded to low medium largely due to the strength of the South East Queensland property market.
This area is experiencing strong demand and are projected to deliver healthy capital growth.
Houses vs Units
There is a major difference between the risk of houses and units in QLD.
Houses in Brisbane, the Sunshine Coast and the Gold Coast offer low risk, while units in the central Brisbane are high risk.
High population growth is a driving factor behind the low risk for houses in SE QLD.
While there are many areas in QLD with an oversupply of units, the highest risk is in inner-city Brisbane where there is significant oversupply resulting in significant capital growth losses.
The Fortitude Valley area, for example, has brought notable losses upon many investors in the unit market.
