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Driven by economic growth and increasing population, Queensland and Western Australia have become emerging powerhouses in the property market.
Queensland and Western Australia have become hotspots for property investors, driven by record-high home values, robust rental yields and investor-friendly policies, according to Omar Mazzocchi, Queensland state director of sales at Coronis Group.
CoreLogic’s latest Monthly Market Report revealed that Brisbane’s home values now rank as the second-highest in Australia, trailing only Sydney. Meanwhile, property values in Perth have soared by 24.1 per cent in the past year, and Adelaide has seen a significant growth of 14.8 per cent.
Despite a sharp rise in interest rates, with the Reserve Bank of Australia’s cash rate holding at 4.35 per cent for the past year, and interest rates surging past 6 per cent, property markets in Brisbane, Perth and Adelaide have defied expectations by maintaining record highs.
Mazzocchi reported that political factors, including negative gearing, zoning restrictions and first home owner concessions, shape the housing market’s landscape.
CoreLogic data highlighted that Queensland and Western Australia dominate Australia’s top 100 suburbs for rental yields, accounting for 77 of the top-performing unit markets and 76 for houses.
Additionally, Brisbane and Perth are perceived as more affordable alternatives to Sydney and Melbourne, offering better value for money and strong growth potential.
In both Queensland and Western Australia, the strong demand for housing and the influx of workers in key industries contribute to a robust rental market. Major infrastructure developments and mining activity drive high rental yields in regional markets.
In contrast, the Queensland and Western Australian governments have implemented measures to attract investors, such as built-to-rent schemes offering land tax reductions for affordable housing projects.
Another alteration this year is the Victorian land taxes. The modifications featured the main aspects that have significantly impacted investor activity across the nation.
As of 1 January 2024, Victoria has implemented higher land tax rates, specifically targeting properties valued at over $3 million. For example, land valued above $3 million now faces a tax of $31,650 plus 2.65 per cent on the amount exceeding $3 million.
In a recent announcement, the absentee owner surcharge has seen a substantial increase, rising from 2 per cent to 4 per cent for the 2024 land tax year. This notable change is set to have a considerable impact on foreign investors looking to capitalise on property opportunities in the region.
Additionally, starting 1 January 2025, the Vacant Residential Land Tax (VRLT) will be expanded to encompass all residential properties across Victoria that remain unoccupied for six months within a calendar year. This new regulation broadens the tax’s reach, extending beyond the previously targeted inner and middle suburbs of Melbourne.
All of these factors have contributed to high investor activity in Queensland and Western Australia.
According to CoreLogic data, investor loans constituted 40 per cent of new lending in Queensland and 37.1 per cent in Western Australia for September, compared to 31.7 in Victoria. Brisbane’s economy benefits from its strategic location near the south-east Pacific, while Perth’s mining sector continues to drive economic strength, supporting overall market stability.
Despite heightened investor activity, opportunities remain for first home buyers. With an array of government grants and schemes currently available, Mazzocchi encourages prospective home owners to remain optimistic.
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