Capital growth: Why regional Qld will outperform Sydney in 2023

Regional Queensland is tipped to be one of Australia’s top performing property markets in 2023. Here’s why.

Regional Queensland is tipped to be one of Australia’s top performing property markets in 2023, and it is internal migrants who are set to lead the exodus away from the overcooked southern markets.

Canstar’s annual Rising Stars Report, powered by Hotspotting, identifies the most promising locations for capital growth across Queensland in 2023 using a series of forward-looking indicators including sales activity, vacancy rates, rental growth, and infrastructure spending.

Brisbane was ranked second behind Adelaide but ahead of Perth, with regional Queensland (4th) and regional Western Australia (5th) rounding out the top 5.

The sun hasn’t yet set on the Brisbane market, according to the report. Picture: istock

Queensland overall outranked NSW, Victoria and Tasmania in both capital and regional markets, the report revealed.

“Regional Queensland has dropped slightly from second to fourth but the outlook is still promising,” Hotspotting property analyst Terry Ryder said.

“As the nation’s leading recipient of population growth from internal migration, it continues to benefit from the Exodus to Affordable Lifestyle trend.

“Places like Bundaberg South, Caloundra, Newtown and South Toowoomba made the list among others.”

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On the market for offers over $2.75m, 10 Caithness Ct, Middle Ridge, in Toowoomba, gets you an enormous statement home for less than the median house price in some Gold Coast and Sunshine Coast suburbs

Regional Queensland scored high across all five metrics – sales volumes (6th), quarterly price growth (7th), vacancy rates (7th), rental growth (8th) and infrastructure spending (4th) to secured its fourth place ranking.

With views of the city, ocean and Castle Hill, 10 Stanton Terrace, Townsville City, is listed for $2.25m negotiable

“Outside of Brisbane, the growth has been led by the Gold Coast and the Sunshine Coast, but internal migrants have been venturing to regional centres throughout Central Queensland and North Queensland,” the report said.

“More than half of the locations across regional Queensland have rising sales activity at a time when nationally markets are weak.

“There are locations with growing buyer demand right across the state, including Cairns and Townsville suburbs in the far north, central Queensland towns like Emerald and Blackwater, coastal markets in southeast Queensland and towns in the west like Dalby and Chinchilla.”

A whole estate at 18 Stream Avenue, Kewarra Beach, in Cairns is on the market for offers over $3m

In terms of quarterly price growth, the report said regional cities such as Toowoomba, Townsville and Rockhampton looked poised for ongoing price uplift.

Aerial shot of Townsville, which is poised for more growth

For rental growth, six out of the 10 locations across regional Queensland have recorded price growth above 10 per cent, with that likely to continue or increase as vacancy rates remain tight.

“Regional Queensland is a target for buyers of all kinds because it offers lifestyle at affordable prices – particularly beyond the iconic (and increasingly expensive) Gold Coast and Sunshine Coast markets,” the report said.

“Few other states can offer Queensland’s line-up of strong regional cities with vibrant local economies and attractively low house prices.

“The population trends favour Queensland, bringing growth to many regional property markets.”

But Canstar’s editor-at-large Effie Zahos said that the number one rule when it comes to buying property hasn’t changed.

“You’ve got to get your location right,” she said.

“Shopping for the perfect house in the perfect street won’t matter if you can’t afford the loan.

“Rising interest rates and living costs will be impacting affordability and the borrowing power of buyers.

“If you can block out all the noise around whether or when house prices might fall and buy well based on location and affordability, property is still a great way to build wealth over the long term.”

Canstar’s Effie Zahos. Picture: Tim Hunter.

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QLD’S RISING STARS FOR 2023

REGIONS

Bundaberg South

Caloundra (units)

Frenchville

Kirwan

Nerang

New Auckland

Newtown

South Mackay

South Toowoomba

Yeppoon

GREATER BRISBANE

Annerley (units)

Caboolture

Dakabin

Deception Bay

Eagleby

Eastern Heights

Kangaroo Point (units)

Redbank Plains

West End (units)

Originally published as Capital growth: Why regional Qld will outperform Sydney in 2023