Queensland property to benefit from work-from-home trend

Prior to COVID-19, Brisbane was poised for strong economic and property price gains. Prices were expected to grow by 20.3 per cent in 2019-2022, primarily driven by strong underlying demand and a return to undersupply, QBE Australian Housing Outlook found.

Continuously improving economic conditions have generated new jobs and powered strong population growth, led by a wave of seachanging that has made Queensland the No. 1 destination for interstate migration.

In 2019, 106,628 people moved into the state, producing a net gain of nearly 23,000, where 70 per cent settled in Brisbane.

Once the virus struck, Brisbane’s home values moderated rather than faltered, with median house prices up 4.9 per cent to $557,265 in FY20. Apartment values rose 1.8 per cent to $387,4204 – the strongest growth in three years, according to CoreLogic figures.

By September 2020, first home buyer activity had almost returned to pre-pandemic levels, with lending trending up since April due to grants.

Brisbane City Council has further expanded its First Home Owner Rebate scheme for buyers of new or existing homes under $750,000. From 1 October 2020, a 100 per cent rebate of up to $2,000 is available to first home buyers who buy or build a new property.

“A decade of modest price growth had left the market relatively affordable. However, an oversupply of new housing estate and apartments had tempered any upward momentum,” according to the report.

On the other hand, Queensland’s luxury market has been fuelled by low interest rates, lack of stock and market confidence.

Prestige sales continued strongly during winter 2020 for luxury inner-city apartments, bayside mansions and premium residences in tightly held blue ribbon suburbs such as Paddington, New Farm and Hamilton. Over the first weekend of spring, Brisbane’s 10 highest sales totalled more than $34 million.

Agents across Brisbane are reporting more cash sales to buyers who are purchasing premium homes to enjoy now in lieu of overseas travel – a trend observed across all price brackets. In August 2020, an $8.5 million beachfront sale in Raby Bay attracted seven cash offers.

Growth drivers

Locals have taken advantage of the short-term advantage they have over southern city buyers brought about by border closure, but Sydneysiders and Melburnians who can now work from home remain active in the market, with sales off of high-quality video inspections becoming more common, McGrath revealed.

“The Sunshine Coast, in particular, is benefitting from this trend, with the lowest number of listings in a decade resulting in exceptional prices for prestige homes in Sunshine Beach and waterfront apartments in Noosa Heads sold to interstate buyers.”

“The Gold Coast has become a hub for Australia’s tech entrepreneurs, with dozens of start-ups finding their feet since the Gold Coast Innovation Hub launched in 2017, with $60 million in funding to help drive a new digital economy,” the report highlighted.

Driving growth into the state as well is new infrastructure, the $3.6 million integrated resort Queen’s Wharf forges ahead, with expectations of creating 8,000 jobs and adding $4 billion to the state’s economy on completion in 2022.

In May 2020, tunnelling began for the 5.9km twin tunnel Cross River Rail, which will create 7,500 jobs over the life of the project.

Stage 3 construction of the highly successful Gold Coast Light Rail is expected to commence in 2021. The 6.7km link will connect Broadbeach South and Burleigh Heads via eight new stations at locations including Miami, Nobby Beach and Mermaid Beach. Completion is expected in late 2023 or early 2024.

On the Sunshine Coast, the new airport runway opened in June 2020, enabling direct flights on larger planes to more destinations across Australia, Asia and the Western Pacific. The new runway also opens greater export opportunities for local producers in the future.

Additionally, the Queensland government has lent a helping hand to the tourism industry by enticing sporting teams to relocate during the pandemic, including the Melbourne Storm NRL team, several interstate AFL teams and the entire Super Netball series, with games being played in Brisbane, Cairns, Townsville, the Gold Coast and Sunshine Coast.

In suburbs surrounding campuses, growth has been driven by three universities – Griffith, Bond and Southern Cross – which have cemented the region’s growing reputation for research and innovation. Suburbs such as Molendinar and Southport have become in-demand for their proximity to improved infrastructure and amenities.

“As the East Coast’s favourite seachange destination, Queensland is likely to benefit most from the increasingly permanent work-from-home trend. The irresistible combination of new work flexibility, the best lifestyle in Australia and affordable housing makes Queensland more enticing than ever as a prime interstate migration destination,” the McGrath report concluded.