Population growth has put Queensland on the map for major property investors, and the Sunshine State is set to continue to attract big money at the expense of its southern rivals.

Despite yields across all sectors softening in line with the rest of Australia because of higher interest rates, Consolidated Properties Group chief executive Don O’Rorke still believes “Queensland is the place to be’.

“That will continue up to at least the 2032 Olympic and that’s evidenced by population growth that won’t abate,’ he said.

“What that means for the property industry is that there’s significant demand for all of our products – places to live, places to work, places to shop and places to recreate.

“We will very much have a demand driven property market for at least the next decade.’

Queensland’s population rose 2.7% over the 12 months to September 30, according to the Australian Bureau of Statistics.

The state government has forecast the state’s population to be 5.54 million in 2024 and 6.895 million by 2041 with interstate migration from New South Wales and Victoria being a major source of arrivals.

Queensland’s population gain from net interstate migration exceeded the gain from natural increase for the third consecutive year, which has underpinned the rise in house and apartment prices.

Queensland’s so-called Golden Decade has been backed up by a recent JP Morgan Australian REITs report, which said the state had the best performing real estate market in the country.

The report estimated that large cap Real Estate Investment Trusts have $16bn of investment assets in Queensland, or about 16% of their trust assets.

Much of this investment in Queensland stemmed from demand driven by elevated population growth and the $89bn being spent on infrastructure to cater for it, as well as the upcoming 2032 Olympics.

However, there has also been a spike in construction costs which has seen building supply being pulled or deferred across most real estate asset classes, which in turn sparked price increases.

In the Brisbane CBD, there were only three premium office towers under construction – 205 North Quay which will be completed by the end of 2024; the 360 Queen tower by the middle of 2025 and the North Tower of Waterfront Brisbane will be finalised in 2028.

The lack of a supply means Brisbane has comfortably the strongest CBD office market in Australia with vacancy of just 11%, well below Melbourne (18%), Perth (15.8%) and Sydney (14.3%).

Brisbane’s vacancy has fallen in the past seven consecutive quarters, and there was effective rent growth of 19.2% year-on-year.

According to JP Morgan, demand in the industrial sector in South East Queensland has “tapered a touch’ particularly for third party logistics.

“Twelve months ago space was being taken up six to eight months prior to being available, today it is about three to four months prior, yet still very healthy,’ the report said.

“The rate of rent growth is expected to moderate to a still strong at about 10% in 2024 and incentives are tight.’

“Queensland is the place to be. That will continue up to at least the 2032 Olympic and that’s evidenced by population growth that won’t abate. ’ – Chief Executive Officer Consolidated Properties Group

Real Commercial – Chris Herde