Are lower taxes alone the key to Queensland’s residential property boom?

Queensland has overtaken its more populous rival Victoria to become Australia’s most consistent performer on price in residential property investment. So what has brought this about?

Queensland’s lower entry prices are attractive for those trying to get their foot in the door.

Queensland’s attempt to shine as the low-cost state for property investors is paying off.
The Sunshine State is trumping Sydney and Melbourne and there is every reason to believe the trend will continue for years.

Falling prices and weak investment yields are prompting property investors to question long-held assumptions about Sydney and Melbourne as the safest locations for residential property investment.

A new report by Hotspotting confirms Queensland is the most consistent performer when it comes to residential prices. Its survey found that three of the nation’s five “safest” investment districts are in Queensland.

What’s more, the state’s investment lending figures are surging growing at five times the pace of Victoria and second only to NSW in terms of overall volumes.

With investors much more willing to buy interstate over the past decade, property experts say investors now regard Queensland’s lower property taxes as a key factor. On the other hand, the imposition of 10 separate property related taxes in Victoria is considered a key factor in that state’s position as the weakest market in the country.

Hotspotting managing director Terry Ryder says a key factor has been “Queensland’s lower stamp duty and importantly a sense that property investors are actually welcome in the state”.

Property expert Michael Yardney of the Metropole group also says “Queensland’s investor-friendly tax policies are a significant draw. Queensland offers a tax-free land value threshold of $600,000; in Victoria the limit is just $50,000.”

Greater Brisbane and Queensland coastal towns are the winners from population growth boosted particularly by internal migration of Australians from the pricier southern states. Meanwhile, lower entry prices into the market mean that first-home buyers and early stage investors find Queensland the most attractive entry point in the national market.

Importantly, the swing to Queensland has survived any notion that the sea-change shift of the Covid-19 era might have faded in recent times.

The Hotspotting Top 50 survey nominated 29 Queensland suburbs – followed by New South Wales which offered 10 districts. Meanwhile, Victoria – the second most populous state – only managed four locations on the list.

Another factor singled out by property analysts is the momentum of infrastructure building for the 2032 Olympics in Brisbane. Experts compare the market sentiment to previous run-ups in property prices in cities which hosted the games – most notably Sydney which had a property boom in the years before the 2000 Olympics.

“It’s a turning point in the national property market,” Ryder says.

Among the most consistent performers were Noosa, Maroochydore, Robina, and Palm Beach.

However a string of regional cities also made the list such as Mackay, Townsville and Toowoomba.

Meanwhile, the likelihood of property investors and homeowners receiving their first interest rate cut since 2022 were bolstered when the quarterly inflation numbers for December came in lower than expected. The Reserve Bank will conduct its first meeting of the year on February 18.

Originally published as Are lower taxes alone the key to Queensland’s residential property boom?