Key takeaways
Queensland now accounts for 23% of all investor loans over the past year, closely trailing Victoria, which holds a slim lead at 23.3%.
With Queensland’s continued momentum, it’s expected that the state will surpass Victoria very soon, becoming Australia’s second-largest property investor market.
Australia’s property market landscape is evolving, and Queensland is rising fast as a key player.
Traditionally, New South Wales has held the top spot for property investors, with Victoria coming in second.
However, recent data suggests a shift is happening, and Queensland is now on the verge of overtaking Victoria to claim the number two position.
According to data from Money.com.au, Queensland now accounts for 23% of all investor loans over the past year, closely trailing Victoria, which holds a slim lead at 23.3%.
With Queensland’s continued momentum, it’s expected that the state will surpass Victoria very soon, becoming Australia’s second-largest property investor market.
What’s driving Queensland’s surge?
Several factors are contributing to Queensland’s growing appeal to property investors:
1. Investor exodus from Victoria
One key reason for this shift is the changing tax landscape in Victoria.
The introduction of a flat-rate levy for property investors, combined with additional taxes on landholdings, has made Victoria a less attractive market for investors.
Many have begun to look elsewhere, with Queensland becoming the new destination of choice.
2. Affordability and strong rental yields
Queensland offers significantly lower entry costs for property investors compared to Victoria and New South Wales.
Investors can still find properties in regional areas like Townsville, Bundaberg, and Gladstone for around $500,000, with rental yields ranging from 5% to 10% or more.
This is a massive draw for investors looking to maximise returns, particularly as housing affordability becomes more strained in the southern states.
3. Infrastructure boom
Queensland is undergoing major infrastructure development, including projects like Brisbane’s preparation for the 2032 Olympics, the Cross River Rail, and significant new housing developments.
These projects are driving both property values and long-term growth potential for investors.
4. Interstate migration
Queensland’s population is booming, with over 107,000 people migrating to the state from other parts of Australia in the year to March 2024.
As more people move to Queensland, driven by the more affordable cost of living and lifestyle benefits, the demand for housing continues to increase.
5. Lifestyle and climate
It’s no secret that Queensland’s warmer climate and access to beaches are attractive.
The Sunshine Coast, Gold Coast, and other popular regions are becoming prime targets for both residents and investors.
The lifestyle appeal of these areas is only growing, making Queensland an even more desirable location for both owner-occupiers and investors.
The numbers behind Queensland’s growth
Queensland is leading the nation with a 36% year-on-year growth in investor loans—nearly double the national average of 21%.
Even more telling, first-home buyer investor loans in Queensland have grown by 23%, highlighting a broader trend of Australians investing in property rather than purchasing a home to live in.
This contrasts starkly with Victoria, which has seen its share of investor loans shrink over the past year.
Just a year ago, Victoria held 26.2% of all investor loans, while Queensland had 22.4%.
This is a significant shift, and it looks like Queensland is only going to continue to grow in prominence.
What should investors watch out for?
While Queensland presents many opportunities, it’s crucial for investors to do their due diligence.
The booming market, especially in regional areas, can offer lucrative rental yields, but it’s essential to consider the long-term potential of these markets.
Infrastructure developments, population growth, and economic stability will be key indicators of a location’s future success.
As Mansour Soltani, Money.com.au’s Home Loans Expert, notes:
“Cheap doesn’t always mean good, but it can be a solid entry point into property investing.”
In other words, investors should balance affordability with the fundamentals of the location they’re investing in.
Conclusion: a bright future for Queensland investors
The rise of Queensland as a dominant property investment market reflects broader shifts in Australia’s economic and property landscapes.
As tax changes push investors out of Victoria and affordable, high-yield opportunities emerge in Queensland, it’s likely that the Sunshine State will continue to gain momentum in the years to come.
For property investors, Queensland offers an exciting opportunity, but like any investment, careful consideration and strategic planning are essential.
If you’re looking to capitalise on the Sunshine State’s growing market, now might be the time to take action, before the gap between Queensland and Victoria widens further.
