Victoria's real estate market has been undergoing a major shift in recent years, with many investors withdrawing, while investment activity in Queensland has steadily increased. Data shows that Queensland has become a "new paradise" for investors, while Melbourne is at risk of losing its position as Australia's second-largest real estate investment market. Melbourne's housing market was once booming, but according to data from the Australian Bureau of Statistics (ABS), Victoria accounted for only 23.31 trillion yuan of investor loans nationwide in the past year, compared to Queensland's 23.1 trillion yuan, a negligible difference. Loan data refers to the distribution of newly approved real estate investment loans, that is, the proportion of total investment loans held by each state in the country.
Mansour Soltani, a mortgage expert at Money.com.au, pointed out: "Queensland is gradually becoming the new 'ideal place'. It not only has a stable local economy and population growth, but also an expanding regional market and ongoing infrastructure projects. It has all the conditions that investors need." He said that Queensland has multiple advantages in attracting investors and Victoria may be surpassed by Queensland.
Investment loans see significant growth as Queensland catches up with Victoria
Money.com.au research and data expert Peter Drennan pointed out that Queensland's investment loan growth rate was as high as 21%, while Victoria's was only 4%. He predicted that Queensland may surpass Victoria this month or next to become Australia's second largest investment market after Sydney.
The latest PropTrack data shows that the number of rental properties in Melbourne increased by 17.3% year-on-year in September, but it is still 18.5% lower than the ten-year average in September 2022. Cameron Kusher, director of economic research at PropTrack, believes that the growth rate of investment loans in Queensland is clearly faster than that in Victoria. "Investors now have more freedom to choose investment areas. Funds that used to choose Victoria are now turning to other states."
"We are seeing continued selling activity from investors in Victoria, while this has eased in other states," Mr Kusher added.
Melbourne's attractive rents are attracting people back to the city
Despite the shift in investment towards Queensland, Melbourne's affordability remains attractive to potential buyers and tenants. September data shows Melbourne's median rent is $570 per week, slightly cheaper than Brisbane's $620, Sydney's $730 and Adelaide's $580.
James Morrell, CEO of the Muval moving booking platform, said Melbourne was regaining national net migration. "Melbourne experienced significant net out-migration during the COVID-19 pandemic and is now experiencing positive net in-migration figures for the first time, a shift that is particularly pronounced among Australia's capital cities," he said.
Future Trends
As the Queensland property market heats up and the investment environment changes, it will be worth keeping an eye on how investors choose to invest. Queensland's vibrant growth demonstrates its potential as an investment hotspot, but Melbourne's high value for money remains attractive.
Apart from Victoria and Queensland, the real estate markets in other states also show different investment trends. The following are some comparisons of real estate investment in other Australian states:
- New South WalesNew South Wales remains the nation's largest real estate investment market, driven primarily by Sydney's strong market. Sydney's relatively high house prices and rental rates have attracted both domestic and international investors. However, Sydney's high housing prices have also deterred some investors, who are seeking more cost-effective investment opportunities in other states.
- South AustraliaSouth Australia's real estate market is relatively stable, primarily concentrated in the capital, Adelaide. Adelaide's relatively low house prices and rents have attracted investors seeking more investment opportunities outside of major cities. While growth hasn't been as significant as in Queensland, Adelaide's affordability has increased its appeal post-pandemic.
- Western AustraliaWestern Australia's real estate market is primarily driven by Perth, where strong performance in the mining and resources sectors has a direct impact on local property demand. The economic recovery during and after the pandemic has sparked some investor interest in Perth, particularly driven by infrastructure projects and population growth.
- TasmaniaTasmania's property market is relatively small, but the state's liveable environment and low cost of living have attracted some investors and families in recent years. Hobart has also experienced some growth in house prices, making the state an attractive option for some investors.
- Australian Capital TerritoryThe capital city of Canberra has seen a relatively stable real estate market in recent years. While prices and rents have risen, they remain relatively affordable compared to Sydney. The capital's stable government jobs and comprehensive public services make the region attractive to investors.
Overall, the growth rates of investor loans in different states reflect the competitiveness and attractiveness of their respective markets, with Queensland currently experiencing the fastest growth, while New South Wales remains the largest market for investment.
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