Interstate property investment can be hugely profitable as it enables you to take advantage of opportunities in different regions while diversifying your portfolio. For interstate property developers, Brisbane is a particularly attractive place to invest owing to its growing population and competitive pricing.
The residential property market, in particular, holds a lot of potential, especially in build-to-rent projects such as townhouse developments.
Let’s explore the real estate potential for interstate investors who wish to take advantage of the vibrant and growing Brisbane property market.
High Growth Market
As the capital of Queensland, Brisbane is Australia’s third-most populous city and is also the largest, measuring an impressive 1,140 km2. This makes Brisbane the third largest city in the world, geographically speaking.
Brisbane’s population has grown significantly over the years, from 441,718 in 1950 to an estimated 2,536,450 in 2024. From 2023 to 2024, the population increased by about 31,950, which is an estimated 1.28% change year-on-year.
This population growth is a result of significant migration towards Brisbane by those who find housing to be unaffordable in other major cities, such as Sydney.
This growth presents ample opportunities for real estate investors, as Brisbane’s growing population is in dire need of more housing.
High Demand for Housing
Like many of Australia’s other major cities, Brisbane is suffering through a housing crisis, with demand for housing far outstripping supply—not only now but for the next decade or two as well.
As it stands, Brisbane is far behind on its plans to get more homes built. Queensland deputy premier Steven Miles said in August 2023 that many more townhouses and other types of homes were needed in the city to meet the demand, citing the South East Queensland Regional Plan to fast track the development of at least 209,000 new homes in Brisbane by 2047.
However, in October 2024, it was revealed that less than half of the ambitious annual target for new housing developments has been achieved so far.
Preferential Policy Environment
Given the housing crisis in Brisbane, real estate developers who want to build townhouse complexes in the city are being given the red carpet treatment.
Developers are being offered significant tax breaks to make it easier to see their affordable housing projects to fruition. In March 2023, Treasurer Cameron Dick said that build-to-rent projects in Brisbane would enjoy a 20-year-long 50% discount on land tax payable. Among other benefits, these developers would also be fully exempt from various foreign investment taxes.
What’s more, Brisbane Mayor Adrian Schrinner said in October 2023 that affordable housing project developers could have between 50% and 100% of their infrastructure fees waived, depending on the type of housing they were planning to build.
Strong Margins
Thanks to Brisbane’s population growth and high demand for housing, property developers in the city are likely to see strong margins for their investments.
Brisbane is among the top three highest-growth capital cities in terms of housing value, with home values rising by 61.5% from March 2020 to June 2024. Perth and Adelaide have followed a similar trend.
This is in stark contrast to Sydney’s 28.2% growth over the same period and Melbourne’s 11.2%, for example.
When coupled with the relatively low cost of development, thanks to the preferential policy environment, these figures indicate that those in the business of developing properties in Brisbane can look forward to significant capital gains on their investment over the years to come.
Robust Rental Market
Brisbane has enjoyed a stable vacancy rate of only 1% for several months, which means that the demand for rentals is still very high across the city.
House rentals in the city are also still rising. Over the past year, house rentals went up by about 7.3%. Meanwhile, unit rentals, which include townhouses, are following a similar trend, growing by 8.5% year-on-year as of June 2024.
Although rent increases have been showing signs of easing, they’re still much higher than usual when compared to long-term trends in Brisbane.
On average, the gross yield for house rentals is about 3.5%, while the yield for unit rentals is about 4.8%. This is a robust rental yield for a major city, as Australia’s other capital cities typically see unit rental yields of between 3% and 4%.
Infrastructure Investment
Brisbane will host the 2032 Olympic and Paralympic Games, which means that there is a huge push to ramp up infrastructure investment in the city and surrounding areas leading up to the event.
The Queensland government has committed to a $7.1 billion venue infrastructure program to transform certain venues and precincts in the city.
This significant investment into upgrading the city’s infrastructure is likely to result in a substantial boost in property values, particularly for those properties located near the event venues. Specifically, properties located within 10 km of Brisbane’s central business district will benefit the most.
In addition to the significant increase in infrastructure investment, the 2032 Olympic and Paralympic games themselves will likely result in a large, albeit temporary, spike in accommodation demand.
The games are not the only instance of infrastructure investment, though. The city has also invested in several large-scale transportation infrastructure upgrades. Among these are major airport expansion plans, the significant Cross River Rail project and the Brisbane Metro rapid bus transit project, all of which are set to revolutionise public transport in the city within the next few years.
Emerging Suburbs
Brisbane’s growth is not just confined to its central business district. Several emerging suburbs are presenting significant opportunities for property developers, particularly areas such as New Farm, Paddington and West End.
These high-demand areas are seeing significant growth in property values as they are quickly becoming cultural hubs. Redcliffe, Springfield and Logan are also growing in popularity as investment destinations owing to their proximity to the city centre and other key amenities.
In these suburbs, there is a growing need for contemporary, medium-density housing options, like townhouse complexes, to accommodate young families and first-time homebuyers.
A growing number of developers are also taking advantage of opportunities in urban renewal zones, where higher-density developments are replacing older housing stock. Suburbs like Woolloongabba and Chermside are prime examples of this, as these areas benefit from upgraded infrastructure and transport links.
For interstate property developers like yourself, Brisbane is a fine place to invest. As one of the leading full-service townhouse builders in the city, Groove Properties is primed and ready to bring your investment to life. Contact us now to find out more!
