Author: Mike Gill , Head of Research – PEXA
As the Australian property market is buffeted by headwinds, with households increasingly feeling the pinch of rising interest rates, Queensland is facing into these forces from a position of strength.
Despite the recent slowdown, the PEXA Property Insights Report for Financial Year 2022 reflects that the sunshine state has emerged as the nation’s leading property market. Outperforming the other mainland east cost states, Queensland recorded the highest number of residential sales with over 220k property settlements in FY22. This saw Queensland overtake New South Wales, the leading jurisdiction in FY21, with 14k more residential sales.
While all mainland east coast states experienced year-on-year growth in the volume of properties settling, Queensland again led the way, up 11.8% on FY21, compared to 1.5% and 8.7% in New South Wales and Victoria respectively.
This underlying strength was also reflected in the aggregate value of residential sales settled on the PEXA Exchange platform, with Queensland recording a 36% increase – the largest percentage gain on the east coast in contrast to FY21 figures.
Queensland remains Australia’s lifestyle destination
While the top ten postcodes for residential sales volumes are dominated by the capital metro areas in New South Wales and Victoria, PEXA’s data reveals a very different story in Queensland.
Only two of the top ten postcodes in Queensland were in Brisbane, while south of the border seven of the top postcodes in New South Wales were in Sydney and in Victoria, nine were in Melbourne.
While Queensland is a more decentralised state, these numbers also reflect a trend that was clearly seen during the initial phase of the pandemic, as locked down southerners chased lifestyle changes. Given this, it’s perhaps unsurprising to see so much demand for sea and tree change destinations throughout Queensland.
While the Gold Coast is a clear favourite, the top ten was rounded out with postcodes in the Sunshine Coast, Toowoomba, Mackay, Bundaberg and the Fraser Coast.
Interest Rates Bite
The Australian property market peaked toward the end of 2021, with the slow down becoming more pronounced in the first half of 2022 as the spectre of rising interest rates, inflation and geopolitical instability contributed to greater uncertainty for households.
In Queensland, PEXA observed the peak in the residential sales market in November 2021, with a flatlining of volumes in the first half of 2022.
Despite this, Queensland maintained the strongest sales volumes on the east coast in the first half of 2022, a sign of underlying strength in demand for Queensland’s offering to buyers seeking opportunity, lifestyle and amenities.