Strong population growth in Queensland in recent years has made it Australia's hottest spot for property investment but a poor place to rent.
The latest Residex property data showed capital growth on Brisbane houses was particularly strong over the three months to August, rising by 5.57%. House values in Cloncurry grew the fastest - rising by 10.83% to $225,500 in the same period. Median rents also rose strongly - up by 6.19% to $265 a week in the popular suburb.
Units in Mount Warren Park have also notched up impressive gains in rents. Investors were treated to an average of 6.01% rental yield on their unit investments in the month ending August.
National research director for PRDnationwide Tim Lawless said Brisbane was experiencing a flat period between 2004 and 2006, but has since been rejuvenated. "Since early 2007 a new growth phase [has] commenced and growth in greater Brisbane is now topping 10% pa," he said. "Investors have become very active as the prospect of capital growth returns. In addition, vacancy rates are at very low levels and rental yields are showing consistent improvements."
Mass overseas migration to Queensland has increased demand for housing, fuelling not only high property prices but also higher weekly rents.
BIS Shrapnel's senior project manager, Jason Anderson, said strong population growth coupled with escalating employment opportunities in the state have created pent-up demand for property. He said that although population growth has started to drop off in recent months, it is the cumulative effect of an increasing population over several years that is now having an impact on Queensland.
"The rental market has been tight in Brisbane and the Gold Coast and it's been tight there for the best part of three of four years," said Anderson. "The rents have gone up 6% or 7%. We haven't see growth of that magnitude in either Sydney or Melbourne."
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