Hi, Andrew Bell here. Today, I’m pleased to share some fascinating research with you. As we move past the Christmas and New Year break, the research season is in full swing, and I have some key insights to discuss.
Most research institutions focus on individual aspects of the market—such as interest rates, unemployment, or population growth—without offering a complete picture. However, Ray White’s Research team, led by Nerida Conisbee—Australia’s most quoted and sought-after real estate economist—does just that. They consolidate and interpret a wide range of data to provide a comprehensive view of the market.
I think we’ve all heard enough about interest rates lately. The Reserve Bank, responding to public pressure and economic conditions, lowered rates by 0.25% in February. However, the latest inflation data and statements from the Reserve Bank Governor indicate that another rate cut is unlikely in the near future.
Population growth plays a crucial role in driving real estate prices. While most research houses focus only on capital cities, our analysis considers the broader South East Queensland region, where Brisbane’s figures are particularly relevant.
Looking at the latest data, Brisbane and Perth continue to lead in population growth, with Perth slightly ahead at 11.2% and Brisbane close behind at 10.6%. Most other capital cities are growing at roughly half that rate.
The graph on screen highlights notable shifts in the regional market. Population growth within the ‘Golden Arc’—comprising the Gold Coast, Brisbane, and the Sunshine Coast—is a major driver of price increases. From 2019 to 2024, house prices in these regions have seen significant growth, with the Gold Coast leading the way.
Examining house price trends over the past 12 months, Perth has recorded the highest growth at 16.7%, followed by Adelaide at 10.2% and Brisbane at 9.5%. Among regional markets, the highest growth rate sits at 5.8%.
For apartments, Perth again leads with a 17.4% increase, followed by Adelaide at 13.2% and Brisbane at 12.6%. The Gold Coast continues to dominate regional apartment markets, showing a 7.5% growth rate. By contrast, Melbourne sits at just 0.2%, Canberra at 0.9%, and even Sydney at only 2.2%.
Another key insight is the stark divergence in price growth across Australia. Perth, Brisbane, and Adelaide have collectively recorded an 11.9% increase, while Sydney, Melbourne, and Canberra have grown by only 1.6%. This highlights where capital is flowing and where property investment is yielding the highest returns.
Although rental growth hasn’t been discussed as much recently, the data shows that it remains strong. Investor finance lending in Queensland has surged, indicating that investors see the southeast corner of the state as the best bet for both rental and capital growth. The upswing in both owner-occupier and investor activity throughout 2024 further reinforces this trend.
While property prices at the top end of the market surged over recent years, the luxury housing sector is now stabilizing. The highest-value properties—those in the top 5%—are experiencing stagnant growth, whereas lower-tier high-end properties continue to see gains.
Looking ahead, forecasts for high-end regional property markets place the Sunshine Coast at No. 1 for growth, with the Gold Coast following closely behind.
One of the most pressing questions remains: Can this growth continue? Queensland needed 54,000 new homes to be built last year, but only 41,700 were completed. This ongoing undersupply continues to drive demand and push prices higher.
While construction costs are moderating in Queensland, they are still rising in Western Australia and South Australia. However, despite calls to increase housing supply, the reality is that it remains cheaper to buy an established home than to purchase land and build new. This economic reality is limiting new construction, further tightening supply and keeping upward pressure on prices.
An often-overlooked factor in price growth is the demographic shift towards smaller households. More people are living alone, and household sizes are shrinking, which is increasing the demand for housing. There simply aren’t enough small homes to meet this demand, which explains the strong market for one-bedroom apartments as the most affordable entry point.
Despite the Federal Government’s ambitious target of building 1.2 million homes over five years, the data shows that construction is actually declining rather than increasing. As the final slide illustrates, these grand plans have yet to translate into real action, meaning the housing crisis persists.
There’s a lot to take in from this research, but this is just one piece of the puzzle when it comes to understanding the real estate market’s future direction. I’ll continue to provide deeper insights in upcoming market reports.
Until next time,
Andrew Bell
Warm Regards,
Andrew Bell, OAM
Chairman
The Ray White Surfers Paradise Group
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