Hotspots: where to buy in South East Queensland

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Investment Hotspot:

Where to buy in South East Queensland A ‘Golden Triangle’ of opportunity is forming for investors in this popular region.

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Disclaimer: Information contained herein is gathered from sources we deem to be reliable however warrant no guarantee as to the accuracy of third party data. It is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered legal practitioner or financial or investment adviser. All rights reserved.

December 2021

Welcome Thank you for reading this report.

Freedom Property Investors is not a property company. We are a community of investors accessing the hidden market of positive cash-flow properties located in high growth locations across Australia.

Led by Scott Kuru and Lianna Pan, two of Australia’s most successful property investors, we aim to provide our members with investment properties that outperform market averages for both capital growth and rental yield.

Lianna Pan is one of only 3,000 qualified Actuaries in the country, and together we have perfected a detailed methodology

covering all fundamental aspects affecting the residential property market. Spending tens of thousands of dollars on our research, we also employ a full-time research team with access to property specific data not easily accessible to the everyday investor.

Utilising a wide team of over 200 experts around Australia, we work toward a common goal of helping create financial freedom for our members through property.

We hope you enjoy this report and we look forward to helping you leverage our data insights to achieve your financial freedom.

Lianna Pan

Scott Kuru

Founder, Director of Research

Founder and CEO

With enviable lifestyle benefits on offer – from some of Australia’s most picturesque beaches to world heritage listed rainforests – the South East Queensland region is experiencing a surge in popularity from both homeowners and investors alike.

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Investment hotspot: where to buy in South East Queensland

“...we have identified a ‘Golden Triangle’ forming within South East Queensland, and expect many lesser-known suburbs within this triangle to experience impressive capital growth in the years ahead.”

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aving long been an attractive destination for Australians seeking affordable and convenient housing, South East Queensland has fast become a residential investment hotspot – and one which has only increased amidst pandemic lockdowns and challenges of 2020 and 2021.

This increase has been largely attributed to the rise in remote working arrangements as well as the pent-up national demand for housing.

However, there are additional factors propelling the popularity boom of a region which is slated to receive over $130 billion worth of infrastructure projects.

The announcement of the 2032 Brisbane Olympics, with a number of sporting venues to be held in Sunshine Coast and Gold Coast, is expected to further expand economic growth and significantly boost local property markets.

Suburbs with quality infrastructure and lifestyle qualities are set to benefit greatly from increased government spending and growing population.

Housing, transport and facility improvements are already allocated that will also further enhance the appeal and livability across this region.

This in turn will have a great impact on future property values, meaning investors who purchase today will surely be rewarded.

Investment hotspot: where to buy in South East Queensland

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Because of this, we have identified a ‘Golden Triangle’ forming within South East Queensland, and expect many of the lesser-known suburbs within this triangle to experience impressive capital growth in the years ahead.

Large infrastructure investments are already underway, and with a major sporting event on the horizon, property investors should consider that now is the best time to act.

Since 2020, there has been an influx of interstate migrants moving into the region, driving higher levels of demand for dwellings. Combine this with the declining supply of housing, and you can see why this creates an ideal market condition for property investors.

One of the most prevalent factors to these conditions is the national housing supply, which is currently sitting at an 11-year low.

As expected, the shortage of listings on the market continues to drive asking prices, as well as weekly rents, higher and higher.

What market principles suggest is that, when supply is low and demand is high, there is upward pressure on prices.

Record high demand for housing Interstate migration is an indicator of the demand for dwellings, thus a higher interstate migration suggests more incremental demand for housing.

In late 2020, Queensland recorded its highest net interstate migration since 2004, at a time when most of the country was experiencing reduced mobility due to the imposed lockdowns.

The Investor’s Golden Triangle Our research has indentified several key suburbs which are set to benefit greatly in the years ahead.

Investors would be wise to act in 2022 to position themselves and their families for this future growth.

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Investment hotspot: where to buy in South East Queensland

Quarterly Net Population Change Due to Interstate Migration for QLD QLD Net

Greater Brisbane

Rest of QLD

10,000

7,500

5,000

2,500

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Source: ABS Regional Internal Migration Estimates

Interstate migration into Queensland also remained high in the subsequent March 2021 quarter, recording a net gain of about 7,000 residents.

According to population forecasts in the Federal Budget 2021-22, interstate migration into Queensland is expected to retain momentum until 2024-2025, reaching an annual average of circa 21,900 residents over the next five years. This is the highest level of migration inflow of any state in the country.

By 2041, South East Queensland is expected to accommodate an additional 1.8 million people bringing its total population to over 5.3 million.

It’s crucial to consider the long term future dwelling supply across the state and region, and in doing so we can indentify specific pockets to invest in.

5.3 million + Total expected SE QLD population by 2041.

Source: Infrastructure Australia and QLD Government SEQ Regional Growth Plan update 2018.

Investment hotspot: where to buy in South East Queensland

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Housing shortage Despite the influx in demand for residential properties, future supply of dwellings across the region remains low, resulting in widespread housing shortages.

According to data from the Australian Bureau of Statistics, there was a downward trend in the volume of building approvals granted in South East Queensland beginning in 2018 and until the first two quarters of 2020, when the pandemic was at its peak in Australia.

This dip in approvals impacted the ongoing construction of houses in the region and is expected to slow down housing supply in the near future.

An increase in building approvals was recorded from mid-2020 up to the first two quarters of 2021. This had been heavily influenced by the Federal Government’s HomeBuilder program, which provided monetary grants and incentives to home builders until April 2021, in an effort to support the building and construction industries amidst the health crisis.

During the course of the HomeBuilder program, the Government Treasury recorded around 29,000 applications in the state of Queensland, translating roughly to 78% of the total building approvals in Queensland in the same period.

However, following the conclusion of the HomeBuilder scheme, the latest data from the September 2021 quarter shows a steep decline in building approvals and a return to the lower level of building activity seen prior to the introduction of HomeBuilder.

Quarterly Building Approvals in South East Queensland Total

House

Townhouse

Apartment

12,500

10,000

7,500

5,000

2,500

Se p20 16 D ec -2 01 6 M ar -2 01 7 Ju n20 Se 17 p20 17 D ec -2 01 7 M ar -2 01 8 Ju n20 Se 18 p20 18 D ec -2 01 8 M ar -2 01 9 Ju n20 Se 19 p20 19 D ec -2 01 9 M ar -2 02 0 Ju n20 Se 20 p20 20 D ec -2 02 0 M ar -2 02 1 Ju n20 Se 21 p20 21

0

Source: ABS Building Approvals

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Investment hotspot: where to buy in South East Queensland

South East Queensland Asking Prices – Houses Greater Brisbane

Sunshine Coast

Gold Coast

$900,000 $800,000 $700,000 $600,000 $500,000 $400,000

Jan-2017

Jan-2018

Jan-2019

Jan-2020

Jan-2021

Source: SQM Research

Tight property market With more buyers entering the South East Queensland market, combined with the shortage in housing supply and continuous influx of residents, we see house prices booming in this region.

House prices in South East Queensland, similar to rents, have been climbing since the onset of the health crisis.

In 2020 our research had highlighted an area in the South East growth corridor of Brisbane where property

values increased over $100,000 only one year later.

This rapid amount of growth in only a short period of time is testament to the stringent research we undertake so as to position our investor community for fast financial gain.

Looking ahead, there are numerous lesser-known areas and suburbs where tight property markets will drive upward pressure on local property values, resulting in substantial equity growth.

South East Queensland Annual Change in Asking Prices – Houses Greater Brisbane

Sunshine Coast

Gold Coast

20.0% 15.0% 10.0% 5.0% 0.0% -5.0%

Jan-2017

Jan-2018

Jan-2019

Jan-2020

Jan-2021

Source: SQM Research

Investment hotspot: where to buy in South East Queensland

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Attractive rental yields Rental returns for properties in South East Queensland are skyrocketing while vacancy rates have remained at critically low levels compared to the previous years, indicative of a tight rental market.

South East Queensland vacancy rates for much of 2021 have been below 2% in many areas. For comparison, vacancy rates lower than 3% typically means a shortage of rental housing.

“...rents in the Gold Coast suburbs have climbed to $750 a week – an increase of 23% since the start of 2020.”

Amidst the rapidly declining vacancy rates across this region, rents are currently on an upward trend.

In a span of almost two years since the pandemic began, rents in the Gold Coast suburbs have climbed to $750 a week – an increase of 23% from the start of 2020.

The Sunshine Coast and Brisbane experienced similar rental increases of 28% and 11%, respectively.

South East Queensland Vacancy Rates Greater Brisbane

Sunshine Coast

Gold Coast (Average)

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

Jan-2017

Jan-2018

Jan-2019 Source: SQM Research

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Investment hotspot: where to buy in South East Queensland

Jan-2020

Jan-2021

SQM Research data shows that rental yields on the Sunshine and Gold Coasts are high, achieving approximately 5.3% and 5.4% yields respectively for apartments and 4.7% for houses.

Comparing rental yields in Sydney and Melbourne demonstrates why many investors are looking to South East Queensland as part of a passive income investment plan.

South East Queensland Asking Rents – Houses Greater Brisbane

Sunshine Coast

Gold Coast

$800

$600

$400

$200

Jan-2017

Jan-2018

Jan-2019

Jan-2020

Jan-2021

Source: SQM Research

Investment hotspot: where to buy in South East Queensland

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South East Queensland Annual Change in Asking Rents – Houses Greater Brisbane

Sunshine Coast

Gold Coast

30.0%

20.0%

10.0%

0.0%

-10.0%

Jan-2017

Jan-2018

Jan-2019

Jan-2020

Jan-2021

Source: SQM Research

Overall, the unique opportunities present in the region are paving the way for a bright future for South East Queensland.

Investors should act quickly though, as the eventual returns of investment outweigh any potential shortterm risk.

With the upcoming 2032 Olympic games, and the future investment that will occur in preparation for the event, we will only see a further increase in demand for housing in South East Queensland.

To discover which areas and suburbs will benefit the most, you need access to current and detailed dataanalysis, taking into account the main contributing macro-economic factors and forecasts.

Members at Freedom Property Investors enjoy all the latest data and property market research which enables them to make informed investment decisions.

Our track-record in uncovering areas of high capital growth and excellent rental yields is the envy of investment advisors across the country.

Additionally, when a declining housing supply is added to the equation, the market in this region will be primed for a period of strong price growth.

If you have been considering South East Queensland for your next investment, speak to us today to find out what suburbs we are purchasing in.

The Olympics will showcase to a global audience how diverse and spectacular this region is, from its cities, beaches, and hinterlands, and will leave behind a legacy of new and upgraded facilities and infrastructure.

Our team of property investment experts will work closely with you to determine your financial goals and help create a customised plan to achieve your financial freedom through property.

Speak to our friendly team of experts today

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Investment hotspot: where to buy in South East Queensland

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