When it comes to property investing, it’s tempting to look at the past success (or lack thereof) of a market to predict how it will perform in the future.
Every day I speak to aspiring property investors in the Brisbane, Sunshine Coast and Hervey Bay Regions who look at a growing market and think that because it has performed well recently it will continue to grow.
I also meet many property investors who look at a property market that has grown quickly and think that they’ve missed out on potential returns because they didn’t “time the market”.
Both of these conclusions are emotionally driven, and poorly informed and must be avoided.
Smart investors understand that there’s always more to the story than meets the eye.
So, rather than solely relying on surface-level statistics, smart property investors work to uncover the underlying factors driving market trends so that they can make more informed decisions, rather than simply speculating based on past performance.
In this blog, we’ll discuss this further, and explain why (for a variety of reasons beyond the surface level numbers) the Brisbane and the Southeast Queensland markets are considered by experts to be the best Australian property market for investors right now.
The Rising Stars Canstar’s Australian Property Market Report 2024
The latest Hedonic Home Value Index data from CoreLogic, presented the past year’s growth in each of the nation’s major capital cities as follows:
- Perth 21.1%
- Brisbane 16.1%
- Adelaide 14.0%
- Sydney 8.7%
- Melbourne 2.8%
- Canberra 2.1%
- Darwin 1.9%
- Hobart -0.4%
If past performance was a reliable indicator of future performance, one would expect similar rankings when it comes to how the experts predict these markets to perform moving forward.
In reality, the story is quite different, as made clear by the Canstar Australian Property Market Report 2024
The basic premise of the Canstar Australian Property Market Report 2024 is to “use a series of forward-looking indicators to determine the prospects for annual price growth in each of the nation’s major market jurisdictions”.
The report ranked Australia’s top 5 growth regions as follows:
- Brisbane
- Adelaide
- Sydney
- Perth
- Melbourne & Regional QLD (tied)
No doubt, some of these rankings may come as a surprise given last month’s CoreLogic data. Specifically, if it was the fastest-growing city in 2023, and it grew at more than twice the rate of Sydney, why is Perth ranked fourth and well behind Brisbane?
The answer goes back to our initial discussion – past performance is not a reliable indicator of future performance.
When it comes down to it, there is a variety of factors that suggest Perth will not continue to outgrow the market to the extent that it has and that instead, Brisbane is positioned to be the leader.
So why is Brisbane ranked at the top? To answer that question we need to uncover the methodology behind Canstar’s findings.
Why did Canstar rank Brisbane at the top?
The Canstar Australian Property Market Report 2024 refers to five primary criteria when ranking the Australian markets. To understand their conclusions, specifically why Brisbane and its surrounds are the most promising markets to invest in Australia, let’s unpack their findings.
- Sales volumes
12 months ago, Brisbane was ranked 10th among Canstar’s 14 jurisdictions when it came to sales volumes, however, it now ranks third. This is because Brisbane has started 2024 with notable momentum, with sales activity picking up in the past six months and rising demand across all sectors. - Quarterly price growth
The recent uplift in buyer demand has translated into significant price increases. Canstar reports that 70% of suburbs across Brisbane have recorded strong quarterly growth in their median prices which suggests major uplift in 2024.While the report does refer to Brisbane having the second-highest house price growth in 2023, it references this only as a sign (among many others) of momentum, pointing to recent sales and price uplift for why more growth is expected in 2024.
- Vacancy rates
Brisbane City, the Sunshine Coast and Hervey Bay each have a tight rental market which places ongoing pressure on renters but also creates a haven of demand for property investors. - Rental growth
The tight rental market, in combination with a city undergoing major infrastructure projects, has translated to 9 out of 10 Brisbane suburbs recording rental growth above 10% in the past year. - Infrastructure spending
Finally, perhaps the most important factor to consider is that Brisbane ranked No.1 for the second year running for the impact of its infrastructure projects. Brisbane has many multi-billion-dollar developments well underway and as the pace of development picks up ahead of the 2032 Olympics, growth is expected to continue.
In conclusion, while Brisbane did see outstanding growth in the past 12 months (16.1%) this is not a stand-alone indicator of future performance, or else Perth (21.1%) would have outranked it in the 2024 Canstar Report.
The real reason Brisbane has topped the charts and is the best market to consider as an Australian Property Investor is its notable momentum in sales, significant price growth, tight rental market, and historically high infrastructure spending.
So, are you ready to secure the property investment of your dreams?
My team and I are passionate about helping you make the right investments to achieve your financial goals and lifestyle aspirations.
Think of us as your property-buying partner, here to support you in making the ideal property decisions and making the most of Queensland’s booming property market. As your trusted, licensed Buyer’s Agents, we do everything from searching, connecting, researching, bidding, negotiating and securing the best investment for you.
