Queensland’s property sector is experiencing a significant upsurge driven by the state’s population growth, attracting substantial investments, particularly in the South East Queensland (SEQ) region. The influx of major investors is reshaping the real estate landscape, positioning Queensland as a lucrative market compared to its southern counterparts.

Despite a general softening of yields in line with national trends due to rising interest rates, industry experts like Don O’Rorke, the CEO of Consolidated Properties Group, remain bullish on Queensland’s prospects. O’Rorke emphasizes the state’s appeal, citing sustained population growth as a key factor attracting investment across residential, commercial, and retail segments.

Recent data from the Australian Bureau of Statistics highlights Queensland’s population increase of 2.7% in the past year, with projections indicating a steady rise to 6.895 million by 2041. Notably, the state’s growth is significantly bolstered by interstate migration, particularly from New South Wales and Victoria, fueling demand for housing and driving property prices upwards.

Dubbed the “Golden Decade,” Queensland’s current real estate boom is underscored by a report from JP Morgan, which identifies the state as the top-performing property market in Australia. The report estimates that Real Estate Investment Trusts (REITs) have allocated a substantial portion of their assets, around $16 billion, to Queensland, driven by robust population growth and massive infrastructure investments in preparation for the 2032 Olympics.

The commercial property sector in Brisbane, specifically the CBD, stands out with a scarcity of new office developments, leading to a remarkably low vacancy rate of 11%, outperforming major cities like Melbourne and Sydney. This shortage has also fueled a notable 19.2% year-on-year growth in effective rents, making Brisbane an attractive market for REITs seeking high-quality office spaces.

Vanessa Rader, Head of Research at RWC, points out the shifting investment focus from traditional real estate hubs like Sydney and Melbourne to Queensland, emphasizing Brisbane’s resilience and growth potential. She notes that Brisbane’s office market is thriving due to population influx and minimal work-from-home challenges, which have spurred business expansions and increased workforce migration to the region.

In the industrial sector, South East Queensland is witnessing sustained investor interest despite a slight slowdown in demand for logistics properties. The market remains robust with rent growth projected at around 10% in 2024, underpinned by the region’s population-driven retail needs and ongoing infrastructural developments.

However, challenges such as escalating construction costs and labor shortages pose concerns for the property industry in Queensland. The intense competition for labor, particularly from government projects, has led to operational hurdles and increased project complexities, impacting the pace of residential and commercial construction in the state.

As Queensland’s property market continues to attract significant investments and undergo rapid transformation, stakeholders are advised to navigate the evolving landscape cautiously, scrutinizing deals on a case-by-case basis to capitalize on emerging opportunities in this dynamic real estate environment.