Investors: Next Qld regions set to boom

InvestorKit’s Overvalued or Undervalued research has analysed housing affordability across capital cities and regional areas to reveal the top affordable locations set to boom in the coming 12 months.

“Last year our Overvalued and Undervalued data-led predictions proved correct with more than 80 percent of overvalued cities experiencing a housing price decline, while more than 90 percent of undervalued cities and regions enjoyed average growth of more than 7 percent,” InvestorKit founder Arjun Paliwal said.

“While it’s undoubtedly a tough time in the Aussie housing market, our data is showing us there are still pockets of opportunity to find a growth investment at an affordable price by seeking out undervalued markets with strong fundamentals.”

In Queensland, InvestorKit revealed that investors should be looking to Bundaberg, Townsville, Rockhampton, Warwick and Gatton.

“These regions local economies are either strong or strengthening,” Mr Paliwal said.

“Their unemployment rates are at the lowest level in over a decade

“Their GRPs (gross regional products) are growing faster than the last five year average and population growth rates in all of them are accelerating.”

Aerial shot of Townsville. Picture: Supplied

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Mr Paliwal said that high demand was contributing to limited supply in each of the regions identified, adding each town was not just affordable but also had great growth prospects. “Inventory levels in all five regions are really low, under three months of stock, showing high market pressure,” he said.

“This is mainly caused by the decline in available stock on market compared to pre-Covid time.”

The median house price by LGA is as follows: Bundaberg, $505,000; Townsville, $435,000 and Rockhampton, $400,000.

Warwick and Roma, which base median house values on a suburb level, were $395,000 and $430,000 respectively.

Aerial view of Mackay and the Pioneer River. Picture: Heidi Petith

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By comparison, the Brisbane LGA median house price is now $1.1 million – more than Melbourne.

Mr Paliwal said that the tight rental market in Queensland was creating more demand.

The Real Estate Institute of Queensland (REIQ) Residential Vacancy Report for the March 2024 quarter said vacancy rates were as low as 0 per cent in Queensland, with rental availability remaining dangerously low across much of the state.

RELATED: QLD vacancy rate “dangerously low”

“Rents are growing fast in these regions,” Mr Paliwal said.

“Four out of the five regions are experiencing crisis-level vacancy rates of under one per cent while the fifth region’s (Gatton’s) vacancy rate is also under the two per cent high-pressure benchmark and much lower than its last decade average.

“We expect the fast-growing rental prices, combined with the affordable housing prices as well as the high yields, will push more renters to buy and attract more investors, driving housing values further up.”

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57A Percy Street, Warwick, is listed for $395,0000

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Digital Finance Analytics (DFA) recently revealed that close to one million households across Queensland were in financial stress as the cost of living and housing crisis hits a dire new peak.

More than 320,000 homeowners (more than 45 per cent) were in mortgage stress across the state, spending more than 37 per cent of their income on home loan repayments, while nearly 490,000 tenants — a whopping 72 per cent — were in rental stress, spending on average 36 per cent of their monthly wage on keeping a roof over their head.

Meanwhile, analysis by Finder found that the average Queensland school leaver would need to save for a whopping 21 years to afford a deposit for a house.

“The days of one income earner and a stay-at-home parent being able to raise a family in their own home are long gone,” Finder head of consumer research Graham Cooke said.

“For most people, wage growth simply isn’t keeping pace with skyrocketing property prices.

“While the bank of Mum and Dad makes it easier for some to enter the property market, not all will have that privilege.

Qld housing crisis: Your child will be 39 before they can buy a home

7 O’Brien St, Gatton, is listed for $420,000

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But while the results of both research projects appears dire, Mr Paliwal said Queensland still remained affordable compared to other east coast states.

“The southeast Queensland (SEQ) cities, Brisbane, Gold Coast and Sunshine Coast, are some of the most expensive markets in the country,” he said.

“Their hotness is primarily boosted by incoming migrants from the two major capital cities and overseas.

“House value growth is expected to slow down as prices approach the affordability ceiling.”

But he said that, on the other hand, the rest of the state is much more affordable.

“Out of 26 SA3 regions outside of SEQ, 23 have a median house price under $650,000, and 19 are no more than $500,000,” he said.

“Most of these regions last 10-year growth is much lower than the long-term average, and so they have much room ahead to play catch-up.

“Many of them are extremely hot because of their combination of affordability, lifestyle, and thriving local economy, so hot that more and more buyers are willing to pay much more than the actual value, fearing missing out.”

Mr Paliwal said that Queensland’s population and economy wre both among the best growers across all states, and its property market was also one of the robust performers.

“However, SEQ and the rest of the state have two very different markets,” he said.