What Qld home prices could be by 2025 if predicted ‘surge’ occurs
A massive 543 suburbs could be out of reach of first home buyers by 2025 if predictions for another ‘surge’ in prices set in. SEE THE FULL LIST
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Queensland first home buyers could find themselves priced out of a staggering 543 suburbs within two years if a bold prediction of another “surge” in price growth comes to fruition.
KPMG’s latest property report has tipped that Brisbane house values will grow 2.8 per cent by June next year, and another 4.2 per cent in the 12 months to mid-2025.
When that forecast is applied to PropTrack’s median home price data across Brisbane and the state as a whole, it paints a grim picture for those still trying to get a foot on the property ladder.
Median house prices in 35 suburbs in some of the state’s most affordable regions could push past the first home concession ceiling of $550,000, making buyers ineligible for the maximum stamp duty reprieve.
Buyers currently eligible for the first homeowners grant, which contributes $15,000
to a new build below $750,000, can currently purchase in 395 suburbs across the state, but that numbers drops to 364 if the KPMG prediction comes true across the state.
The value uplift would see previously affordable suburbs such as Forest Lake, Coomera and Narangba push beyond $750,000, and places such as Redbank Plains, Ipswich and Slacks Creek in Brisbane, and Bayview Heights (Cairns), Black River (Townsville) and Ooralea (Mackay) exceed $550,000.
KPMG chief economist Dr Brendan Rynne said that with projections of house price growth ahead, governments would need to review their support programs for first-home buyers and others facing affordability constraints.
“What we suggest is that (state governments) need to review that first-home buyer cap or value cap on a regular basis such as every three years to readjust it to reflect the real purchasing power of first-home buyers,” Mr Rynne said.
“But the much better long term solution is that you actually need planning reform.
“Inner and middle ring suburbs need planning reform that allows for an increase of density in housing stock in all main capital cities.”
Meanwhile, the analysis found that nearly 30 per cent of Queensland’s house markets could be seven-figure suburbs by mid-2025.
Sunshine Beach could push back over $3 million by mid-2025, reclaiming its title as Queensland’s most expensive suburb.
There, the average house at Sunshine Beach could change hands for a median price of $3,098,841, rivalling the current sales values in places like Paddington and Lane Cove in Sydney, and Canterbury in Melbourne.
But it is not the first time the suburb has hit the $3 million mark, with Sunshine Beach peaking at $3.275 million at the height of the pandemic property boom.
Tom Offermann Real Estate principal Tom Offermann said the Sunshine Coast’s prestige market remained strong due to a lack of stock.
“We have around 80 properties on the market which is typically very low, especially given the continued demand,” he said, adding there was still lots of interest coming from the eastern states.
“And I foresee no great increase in listings coming up.”
Elsewhere, riverfront could rival beachfront by mid-2025 based on the KPMG predictions.
Should the price increase tipped for Brisbane be mirrored on the Gold Coast, just $33,808 would separate New Farm ($2,719,477) and Mermaid Beach ($2,753,285).
More than $300,000 would separate both suburbs from their closest rival – Surfers Paradise at $2,407,001 by 2025.
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Rounding out the top 10 for highest median prices would be Hamilton, Ascot, Broadbeach Waters, Noosa Heads and Bundall, with average prices above $2 million, and Tallebudgera Valley, with a median of $1,997,593.
Kollosche principal Michael Kollosche said growth was underpinned by a 30 per cent deficit in new dwellings, coupled with estimated population growth on the Gold Coast of close to 400,000 by 2046.
“The supply issues will ultimately drive the prices up,” Mr Kollosche said.
“Even if on a national level the market experiences turbulence, the Gold Coast, with the amount of infrastructure, development, net migration, and an ageing population from Melbourne and Sydney relocating or buying second homes will be driving the market.”
PEXA’s Cash Purchases Report revealed buyers in the 4218 postcode, which includes Broadbeach, spent $1.33 billion in cash on residential property in 2022 — the highest in the eastern states of Australia.
The latest REA Market Trends report for October also shows that two suburbs now have a $3 million-plus price tag – Teneriffe ($3,102,500) and Chandler ($3,057,500) – but both suburbs were not included in the analysis due to not meeting the threshold of 20 sales.
At the other end of the spectrum, the analysis found that just 194 of Queensland’s 1094 suburbs would have a median house price below $550,000 by mid-2025.
Of those, 36 would be located in Greater Brisbane, ranging from Russell Island ($390,662) to Beaudesert ($545,934).
Up north, houses would still be in reach in 19 suburbs in the Cairns region, 37 in Townsville, 16 in the Toowoomba region, 21 across Mackay and 25 in Wide Bay.
But first home buyers with a budget of $550,000 are already locked out of the Gold Coast house market, with only units providing a chance to achieve the great Australian dream.
However, by mid-2025, there could be just seven suburbs with a median unit price within budget.
It is the same story on the Sunshine Coast, with just four viable unit suburbs for buyers with a $550,000 budget in 2025.
Brisbane’s unit values are tipped to rise more modestly over that same period, dipping 0.5 per cent by June next year and then rising 3.1 per cent by June 2025, according to KPMG.
But even if that forecast plays out, Queensland could have seven suburbs with a median unit value above $1 million.
PropTrack economist Eleanor Creah said conditions were challenging, particularly for first home buyers.
“Although wages growth is slowly increasing, the increase has not offset higher home prices and the increase in mortgage rates,” she said.
“Interest rates are also higher, borrowing capacities have reduced significantly and mortgage servicing costs have increased.
“As a result, affordability has deteriorated markedly, and we are seeing much less activity from first home buyers than we saw through the pandemic boom.”
Dr Ryne said it takes time for any reforms to push through so they needed to be started now.
“Every state government needs to address this,” he said.
“They are aware of the housing crisis but what we need to do is see if there are some short term solutions mixed in with proper long term structural change.”
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