Published December 2013. This article is kept as it was written, as a record of our view of the Queensland market heading into 2014. We have corrected typos and updated links, but the figures and forecasts are the originals. See how it played out at the end.
When is the right time to invest in property?
Right now!
Australian house prices have risen by a moderate 7.6% in the past year, with expectations of further growth in 2014.
What this will mean for new dwellings and off the plan is that as the gap between existing property and current off the plan pricing narrows, developers will want to take higher profits (which they have been unable to achieve for the past four to six years) and will increase the price of off the plan developments accordingly.
When is the right time to invest or buy? Now!
As one of our recent clients put it: “Never before in our history have the stars been so aligned to make a perfect time to take advantage of all that is right and invest!” They were referring to current property values, low interest rates, high demand for rental property and strong rental yields.
All these factors give you a platform from which to grow and secure wealth by owning an investment property that is cash flow positive and not costing you a cent. It is a view we have been advocating for a while now.
Where else could you draw down on the equity in your home at, say, 5.5% and invest it to earn 30% to 40% or more on that money?
Yet we meet people every day who repeat the same mistakes and are once again waiting to see what happens. What will they do, we ask them, when property values continue to grow as expected? The standard answer is “I will wait and see what happens.” We are looking for those of you who recognise the opportunity in high rents, low interest rates and the chance to own a cash flow positive investment that could grow in value.
If you invested, say, $50k to secure an asset of $500,000, you are now earning capital growth on $500,000 of investment you did not previously own, which in all likelihood is cash flow positive. The same $50k in your home loan is only as effective as the 5.5% interest you are not paying on it. You could use the extra cash flow from your new investment property to pay down your home loan faster, and hold title to a new investment property that is being paid off for you by your tenant and the tax man. Do you see the opportunity at hand?
“I have no doubt that Brisbane will be the big improver among the capital city markets in 2014. And, in terms of the states and territories, Queensland is where investors should be concentrating.
Brisbane has lagged Sydney, Perth, Melbourne and Darwin in house price growth because of a triple whammy of events. As well as the national downturn that hit after 2010, there were the 2011 floods and later the extensive jobs and spending reductions by the state government.
As 2013 has worn on, there has been improving evidence of recovery in the Brisbane market. The ABS recorded a 4.1% rise in the Brisbane House Price Index in the 12 months to the end of September. I expect growth to build as we get into 2014.”
Terry Ryder, Hotspotting, 2013
Where is the next capital growth?
Pick up any newspaper or investment magazine, or tune into other media, and you will see that certain pockets of Queensland are sitting on the verge of capital growth. You have every opportunity to secure your own slice of that growth by doing your due diligence and speaking to professionals such as ourselves to help you reach an informed decision.
It is time to get on board, or miss this boat and once again admit to yourself and your friends “I should have!”
Sydney prices are now so high that rental yields have dropped as a direct result, meaning you will be paying more out of your own pocket to negatively gear an investment in an already expensive market.
(There is a wonderful opportunity in Mudgee, NSW, based on coal mining and coal seam gas, with population growth and rental yields of 7%.)
Melbourne was predicted to be flat for a few years but is showing growth returning, with investors earning around 4% rent on older properties and 4.5% to 5% on newer properties valued under $650k.
Brisbane has grown by only 3.5%, with plenty of room for further capital growth due to population growth and strong demand for property. Brisbane is already returning 5% and over on new properties, with plenty of opportunity to achieve a 6% yield. This extra rent will benefit your investment significantly over the seven to ten years you would consider holding it.
Achieving a higher rent plus the potential for capital growth lets you secure your next investment property that much sooner.
The REIQ said that “we are well and truly early in the cycle at this stage”, hence the interest and direct investment in Queensland from interstate investors. Ray White reported that “Southern investors are buying up big in Brisbane, fuelling the recovery in the city’s property market in a bid to get more bang for their buck.”
Queensland: the fastest growing state in Australia
Which locations in Queensland?
Government has invested billions of dollars into Brisbane and surrounding suburbs, South East Queensland, the major growth corridor to the west (Ipswich, Greater Springfield) and further north into Mackay, Rockhampton and Gladstone, due to increased job availability directly attributed to the major coal seam gas, LNG and coal industries, which offer long-term economic stability to the northern region of Queensland.
NB: The Arrow Energy gas plant has been given the green light by government. The new $17.6 billion plant, owned by Shell and PetroChina, is slated to create 3,715 new jobs in Gladstone.
Right now there is a potential oversupply of property, and rents have come off their unusual highs. Once this lag catches up, continued population growth will bring renewed demand on supply. This will put upward pressure on prices and rental yields once again in the next property cycle.
For investors with a riskier appetite, smaller mining towns in the Galilee and Surat basins are offering very comfortable returns. Some see the risk of a mining town; others see opportunity in long-term mining activity, secure jobs and populations growing to meet the available work.
Gladstone is offering investors the opportunity to secure a four-bedroom home with two bathrooms and a double garage for only *$540k on a block of over 600 m². This comes with a one-year rental guarantee of $750 a week, giving a 7% yield (or around *$140 a week cash flow positive in your pocket). Yes, after the first year it could go back to a 5% yield, but so what? Most people are only too happy to secure a 5% rental yield with the opportunity of capital growth.
Another incredible story is the ongoing success of Greater Springfield
Greater Springfield has been voted the number one master-planned estate in the world, and presents itself as an astute investment opportunity based on the following:
- Project investment to date: $9.7 billion
- Estimated cost on completion: $23 billion
- Project completion to date: approximately 13%
- Total land area: 2,860 hectares (7,067 acres)
- CBD land area (Springfield Central): 390 hectares (963 acres), or twice the land area of the Brisbane CBD
- Approval for over 1.4 million square metres of mixed-use space in the CBD
- Access to 86% of Brisbane’s metropolitan workforce within a 32-minute drive*
- Population of over 560,000 within a 22-minute drive of the CBD*
- Commitment by the State Government to deliver two train stations (Springfield Central and Springfield Lakes) by 2013 (now delivered)
- Mater Private Hospital Springfield Central to commence construction in August 2013
- Planned job creation: one in three residents will work in the estate
- Greater Springfield is made up of six suburbs
- Two rail stations in the estate, well serviced by public buses
Self managed super funds and investment property
More investors are looking to take control of their own retirement and want secure investments with a clear track record and a low risk profile, but that give realistic returns. They want an investment that not only outperforms inflation but has the potential to double in value every 10 to 15 years.
Other reasons investors are looking at property include:
- The ability to borrow money to purchase the investment
- By borrowing, you can achieve capital growth on a higher capital value, the value of the property, not just the value of the funds under management
- Investors want choice and control of their preferred investment strategy and asset class
- Investors don’t want to pay ongoing high fees to fund managers or financial planners; they would rather keep those fees for their own retirement
- Bricks and mortar has always doubled in value every 7 to 10 years in Australia
- There is high demand for rental properties, with vacancy rates traditionally very low across most Australian cities
However, not all property makes a sound investment, which has attracted the attention of the regulator, as we wrote about in our previous blog.
That is why it is important to work with property professionals such as ourselves, who will share information, industry experience and contacts with you so that you can make that important, informed decision before committing. After all, you want to avoid the scrutiny of the tax man, and your goal is to grow your wealth.
Read why an SMSF and property and setting up an SMSF.
Looking back from 2026
Brisbane did become one of the strongest capital city markets of the following decade. In the December quarter 2014, Brisbane City’s median house price passed $600,000 for the first time (REIQ, as reported by Australian Property Journal). By August 2026, Cotality put Greater Brisbane’s median house value at $1,180,552. The two figures use different measures and areas, so they are not a like-for-like comparison, but the direction is clear.
Greater Springfield and the Ipswich corridor kept growing too: Ipswich was the fastest-growing council in South East Queensland in 2024–25 (QGSO). The resource towns were a different story, which is why we now weigh single-industry exposure carefully.
Sources: Australian Property Journal, March 2015; Real Estate Business, August 2026; QGSO. * Figures marked with an asterisk were indicative at the time of writing.
Keep researching
