Rising demand for Queensland housing adds pressure to affordability crisis

The housing crisis in Queensland is set to worsen as unprecedented demand for properties, particularly on the Gold Coast, shows no signs of easing, according to Andrew Bell OAM, the Queensland spokesperson for the Real Estate Institute of Australia (REIA).

Bell said the ongoing pressure on budgets and choices would be especially challenging for renters and first home buyers seeking affordable housing.

“It is simply an equation of supply and demand,” Bell said. “What has happened, particularly post-Covid, has been a significant transfer of wealth from other parts of Australia including Melbourne and Sydney.”

He noted that during the pandemic, there was an increase in divorces, downsizing, and relocation, with high-wealth individuals moving to Queensland and having the capacity to pay higher prices. In Surfers Paradise and Broadbeach, 24% of sales have been cash purchases.

While this northward migration is a major positive for the state and a “coming of age” for Queensland, Bell said it has resulted in a decline in affordability for many buyers and renters.

“We don’t have enough properties to meet the huge influx of residents, especially workers who will contribute to strong economic growth,” he said.

With escalating demand forecast to continue, Bell called for a combined approach by councils, government, and other bodies to incentivise developers, saying the state could no longer wait for the government to address housing supply.

“Every day this housing crisis is getting worse and we are almost 100% depend on private enterprise to step up. We simply have to make the process more attractive than it has been,” he said.

Bell suggested that build-to-rent developments that cannot be sold could help take pressure off the rental market, but developers would need incentives such as rapid approval processing, slashed infrastructure charges, and reduced council rates and fees for a three to five year period.

He added that the state government could offer significant concessions on stamp duties and changes around land tax to encourage building projects, while the federal government needed to offer incentives and grants to build in the affordable housing space.

According to the latest REIA research, housing affordability in Queensland declined over the quarter and year, with the proportion of family income devoted to meeting average loan repayments increasing to 45.1% over the quarter – the highest decline of any state or territory.

Rental affordability in Queensland also declined over the quarter and year, with the proportion of family income required to meet median rent increasing to 22.3%.