These Queensland cities are expected to hit record high prices

The Sunshine State’s property market is predicted to shine during the next financial year.

Known for its fantastic beaches, unique tourist attractions and beautiful weather, it’s no surprise Australians are looking to relocate to Queensland’s major cities.

But with more people flocking to the state, supply is unlikely to meet demand, and prices are expected to increase in Brisbane, the Gold Coast and the Sunshine Coast after several quarters of downturn.

The most recent Domain Forecast Report predicts that house prices in these Queensland markets will increase by 1 to 4 per cent by the end of the 2023-24 financial year.

FORECAST GROWTH OF MAJOR QUEENSLAND CITIES

Location	Houses	Units
Brisbane	1-4%	0-1%
Gold Coast	2-4%	1-2%
Sunshine Coast	1-2%	1-3%
* Forecasts are the predicted percentage change in house and unit prices by the end of FY24. Note this forecast spans 13 months (from the beginning of June 2023 to the end of June 2024).

Brisbane

Brisbane has seen the most house-price increases in the last two years and forecasts predict an additional 1 to 4 per cent growth in the upcoming financial year. Despite suffering a downturn for three consecutive quarters, Brisbane home owners have made more on their properties in the last two years than those in major cities like Sydney and Melbourne. 

Unit prices are predicted to stabilise, with a forecasted growth of zero to 1 per cent. Despite the low growth prediction, Domain’s forecasts expect Brisbane to hit a new record high unit price at the end of the 2023-24 financial year.

Michael Kleimeyer of Ray White Paddington believes there will be decent price growth in the Brisbane area in the coming year.

“Thanks to interstate migration continuing, we have a large number of people looking to buy, upgrade and even downsize their property,” he says. “So the demand will keep the price up.

“We’re getting clients from ACT, NSW and lots of expats looking to buy property here. Because of COVID, work life has changed and now being able to work from home has given people more [choice] of where they can live and work.”

Citing a lack of new developments and a 40 per cent drop in stock, Kleimeyer says high demand and low supply have kept prices from decreasing. 

“We’ve recently sold a house for $1.3 million that had been bought 18 months ago for $1.1 million,” he says. “The inner-city Brisbane market hasn’t dropped.”

Gold Coast

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Broadbeach and the suburb of Broadbeach Waters on the Gold Coast. Photo: Getty

House prices are expected to increase by 2 to 4 per cent to reach a record high of between $1 million and $1.02 million, according to Domain’s forecast. Unit prices are predicted to grow by 1 to 2 per cent to reach between $656,500 and $663,000. So far in 2023, Gold Coast unit prices have grown, and prices are likely to continue increasing slowly in the 2023-24 financial year.

Jordan Thams of Ray White Surfers Paradise says property prices have increased due to a large migration from people in the southern states who are looking to escape harsher climates and find more affordable properties.

“What we are seeing [is that] prices are fairly stable, largely due to a shortage of listings in good locations [due to] people not wanting to sell their properties and people having to pay a premium price,” he says.

Much like the rest of the country, there is a significant supply shortage, Thams says, with the few new developments available typically being luxury apartments by the beach with a $1 million starting price.

“All the developments that are planned are for people with a lot of money,” he says, adding that there are not many lower socio-economic developments that are more affordable. “There is going to be an even worse lack of supply for more affordable property.”

Sunshine Coast

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An artist’s impression of the new ‘data’ city centre being developed at Maroochydoore by Walker Corporation with the Sunshine Coast City Council. Photo: Sunshine Coast City Council

While the Sunshine Coast experienced a deep downturn in the last year, with the median house price decreasing by 9.4 per cent, the forecast predicts that, in about five quarters, it will come close to the $1.03 million peak it reached in March 2022.

Alex Harris from Noosa4Sale says that, despite the supply problem, people from the southern states still want to live in places like the Sunshine Coast.

“[The prices] will remain strong,” she says.

Harris predicts the forecasted growth will come from investors selling their investment properties to owner-occupier buyers – a trend seen over the past year.

“We are off the peak, but prices are still holding, and I expect them to go up in the September school holidays this year,” she says.

While a lack of supply is expected to keep prices stable or moving upward in certain markets, it’s possible that the pent-up supply could return to the market and spark price falls if housing confidence improves. Until then, growth should remain stable, says Domain chief of research and economics Dr Nicola Powell.

“While prices are expected to rise, affordability will contain the pace of growth as rapidly rising interest rates and the serviceability buffers placed on top have seen the maximum borrowing capacity shrink significantly,” she says.

Article source: Queensland Property Investor