‘An underrated place’: Where Brisbane property investors are looking

4 hours ago 2

It’s 1300 kilometres from the nearest capital, famed for its humidity, crocs and cowboys – and it’s lassoed some of the biggest house price gains in the country.

Townsville, where the median house price is $599,000, has stormed to the top of the national leaderboard, with five of its suburbs among Australia’s top 10 for annual growth.

Townsville has stormed to the top of the national leaderboard, with five of its suburbs among Australia’s top 10 for annual growth, based on Domain data.

According to Domain’s June quarter House Price Report, Aitkenvale, Vincent, Heatley, Gulliver and Wulguru – all family pockets in the heart of suburbia – clocked gains of more than 35 per cent in just 12 months. Aitkenvale and Vincent climbed more than 38 per cent to $525,000 and $470,000.

Experts say southern investors priced out of their own backyards are behind the boom – particularly Sydney, Brisbane and Melbourne buyers looking to park their property dollars in a regional hub with big economic drivers minus the price tag.

Damien Keyes, of Keyes & Co, said the city’s star performers had long been underrated and still brimmed with bargain buys just a stone’s throw from the city centre.

Those overlooked pockets have been thrust into the spotlight, with prices surging as outside money pours in.

According to Domain’s June House Price Report, Aitkenvale clocked gains of more than 38 per cent to $525,000.

“The last 12 months in particular has seen this growth really unfold,” Keyes said.

“It was driven by the interstate investor market, and it was geared towards suburbs like Vincent and Heatley that were coming off very low base medians.

“But also suburbs like Gulliver that have bigger blocks and older homes alongside an older demographic that’s slowly transitioning out of the suburb.”

The influx has pitted first-home buyers against interstate investors, fuelling frustration among locals who fear they’ll soon be being priced out.

Keyes said southern firms had been eyeing Townsville’s investment potential for years, but the past 12 months had supercharged the trend.

“It’s now seen as a steady place to park your money while offering a fantastic lifestyle,” he said.

“Rents are still strong too, and vacancy rates are still at an all-time low.

“We are seeing younger investors come in too … some are people with equity who can’t afford the patch they’re in.”

Brisbane-based investor Dean Stallard said Townsville’s bang for buck gave him an entry into a market he’d been all but shut out of in the capital.

Armed with a $500,000 budget, the young buyer instead looked north and said the regional city emerged as a clear winner.

“When you think of cities of that size there are not a lot of options out there for that price. And the fact that you’ve got the ongoing defence spend in Townsville and a population that’s continuing to grow makes it 1000 times better than other comparable options like Bundaberg or Rockhampton,” he said.

Originally from Townsville, Stallard said he didn’t realise just how much growth the city was yet to achieve until COVID struck. While other cities were booming, he said the northern hub was lagging – but it was a lag that made it ripe for investors.

The suburb of Gulliver has a median house price of $515,277, in the year to June on Domain data, an annual price gain of 35.8 per cent.

“I think there’s since been a bit of a shift in terms of business acceleration there, and I’m not the only one that’s seeing this. There’s a lot of outside money looking in now, and it’s an underrated place,” he said.

“It’s great for families … and you can get a three-bedroom house on a 600 square metre parcel of land for $500,000 – which is exactly what I got.”

Stallard snapped up a house in Kirwan – a suburb that has collected 27 per cent house price growth over the past year, pushing its median to $570,000.

“I probably brought a little late in the cycle because in the last 18 months prices have gone up there by about 35 per cent,” he said.

“But I think the median has gone up $35,000 or even $40,000 since I bought it. I paid $495,000 for that house and for that price you’d get a studio in Brisbane.”

Ray White Kirwan’s Nicky Faulks said investors were now bypassing Western Australia and other southern markets for Townsville, with extreme rental pressure turbocharging the growth and pushing more owner occupiers into the market.

“We have seen a lot of interstate investment, but local owner occupiers also really rallied in the second half of last year and that’s because rental demand is through the roof,” she said.

“Any vacant rentals are being leased within the week.”

Faulks said the perfect storm was fuelling strong rental yields, further investment and a solid growth trajectory for the city.

“You can still get a really good home for $500,000 here and a good yield too,” she said.

“I think we’ve really only come back to what we’d lost a few years ago. We’ve got a lot of catching up to do.”