Will a COVID property boom push up Queensland property prices by 20 per cent?

While there may have been a grim outlook for the property market following the COVID-19 pandemic, these fears haven't been realised in the 'Sunshine State', with research by CoreLogic finding that Brisbane house sales surged by 23 per cent in July 2020 to $1.4 billion. In contrast to Australia's southern states, it seems that Queensland buyer demand is sky high, especially in the suburbs.

Following the announcement of these figures, the Courier Mail's Elizabeth Tilley penned an article which canvassed Queensland property experts for their forecasts on the fortunes of real estate in Queensland. The response was overwhelmingly positive.

In predicting the biggest property boom in the state this century, Simon Pressley, Head of Research at property analyst Propertyology, said: "Queensland can expect to finally be the beneficiary of strong property market performance. We have to go way back to 2007 since anywhere in the state except Noosa produced a year or more of strong capital growth."

Pressley continued, making a bold prediction: “Double-digit capital growth over the next 12 months is highly possible in most Queensland locations. Call me an idiot if you want, but 20 per cent price growth over the next 12 months in several locations will not surprise me in the slightest.”

Battle of the cities

Delving deeper into the figures from CoreLogic, it is clear that Brisbane's housing market is faring better than those in Sydney or Melbourne at present. While property prices in Brisbane and its regions increased by 0.5 per cent in September, they fell by 0.3 per cent and 0.9 per cent in Sydney and Melbourne respectively.

And we might not have seen the full extent of housing demand in Queensland this year, because as CoreLogic Australia's Head of Research, Eliza Owen, explained, once interstate borders open up, Brisbane and fellow areas of South East Queensland could be set for a further boost.

Ms Owen said: “This is because Queensland has been the highest recipient of interstate migration over the past few years, and the normalisation of remote work through COVID-19 may only boost that demand further. Between low mortgage rates, low COVID-19 cases and an improvement in consumer sentiment, there may be a broader increase in values in late 2020 and early in 2021.”

Queensland hotspots leading the way

The exodus from Australia's capital cities, thought to be spawned by the current global health crisis, has benefitted the Sunshine Coast and Gold Coast regions in particular. Take the coastal town of Surfers Paradise on the Gold Coast. It's seen prices shoot up by no less than 25.5 per cent over the past year, according to the September 2020 House Price Report published by Domain.

With hospitable weather, a relaxed lifestyle and low interest rates, it is not hard to see why city dwellers seem to be flocking to these parts of Queensland. The same Domain report also revealed that the median price for property in Miami - a suburb of Gold Coast - has risen to $835,000, representing a rise of 21.8 per cent.

Other factors behind the Queensland property boom

It isn't just the effects of the global pandemic which may have contributed to a Queensland property explosion. Locations in Gold Coast and Sunshine Coast can also offer a more affordable lifestyle than families, couples and individuals might expect in the cities of Brisbane, Sydney or Melbourne. There are now more opportunities for property owners to work remotely from different locations to where their company is based. In many cases, lockdown restrictions actually require professionals to stay away from the office. It all adds up to more freedom to make a move up to Queensland - but could planned updates to infrastructure help to sustain the Queensland property boom in the future?

All in the infrastructure?

The Australian government has set up independent infrastructure bodies for each state jurisdiction. Building Queensland is joined by Infrastructure NSW, Infrastructure SA, Infrastructure Victoria, Infrastructure WA and Infrastructure Tasmania in a plan to lead the country's recovery from the COVID-19 crisis.

As part of the strategy, there is to be more collaboration between public and private sectors, in a bid to streamline approval processes and get projects off the ground quicker.

According to Romilly Madew, Infrastructure Australia's Chief Executive: "Prior to the pandemic, Australia had been struggling to address challenges such as population growth in our cities and other major shifts that impacted how we use infrastructure. COVID-19 has shown we need to think differently about how we plan for times of uncertainty. Beyond capital projects, we need to focus on reform to shape Australia’s long-term recovery response."

So what does this mean for property prices in Queensland?

The consensus is that infrastructure improvements can only be a good thing, giving the state the opportunity to capitalise on the current boom and support future growth.

So in contrast to the hardships experienced by many during the lockdown enforced to control the spread of the COVID-19 virus, the picture for the Queensland property market looks relatively rosy. It seems that the market has been a direct beneficiary of the fall out from the virus, while other factors have come together at the right time to precipitate the current boom.

Writing in the Property Observer, Terry Ryder concluded: "Throughout this wacky COVID phase, most market jurisdictions have managed to deliver price growth most of the time. The economy may have fallen into recession, but the property market has not – particularly those markets beyond the two biggest cities, which is where most Australians live."

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