Queensland homeowners are being flooded with calls and letterbox drops from agents hunting for entry-level listings as Gen Z buyers pile into Brisbane’s “overheated” under-$1m market.
Despite rising interest rates, skyrocketing house prices and mounting living costs, younger buyers are still throwing everything they have at getting into the property market — fuelling fierce competition for starter homes and driving up entry-level price points.
Gen Z buyers are still desperate to get into Brisbane’s ‘overheated’ property market at the entry level.
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Australian Property Scout founder Sam Gordon said the new tax reforms announced in this week’s federal budget would only push entry-level home prices higher in coming months.
“What I believe we’re about to see over the next three, six, and 12 months is one of the strongest buying windows we’ve had in years, particularly from motivated sellers who may look to offload before the combined CGT changes come into effect,” Mr Gordon said.
“At the same time, investor demand is likely to become far more limited, because without negative gearing, many buyers simply won’t be able to justify holding property at current prices.
“The long-term consequence is obvious: fewer rentals available, significantly higher rents, and eventually even more pressure pushed back onto property prices as renting becomes less affordable than buying.”
Demand for two-bedroom apartments from first homebuyers is booming. Picture: David Clark.
Agents say buyers are increasingly battling over two-bedroom, one-bathroom units once considered too small or undesirable, with many now selling for more than $1m.
The frenzy accelerated after the federal government expanded its 5 per cent deposit scheme last October, helping more first-home buyers enter the market with smaller deposits.
But industry insiders warn the rush into Brisbane’s affordable housing sector is now pushing prices even higher, with the city becoming harder for first-home buyers to crack than Sydney.
New figures from property data firm Foundit reveal Brisbane now has fewer properties under $500,000 than Sydney — despite the Harbour City being the world’s second-most expensive housing market.
Most of Brisbane’s remaining sub-$500,000 properties are apartments or townhouses, with standalone houses at that price point having virtually disappeared.
FoundIt head of research Kent Lardner.
Foundit head of research Kent Lardner said Brisbane’s under-$1m market was “very, very much overheated” thanks to “all the government incentives, and it’s heavily driven by wages, not wealth, so it’s a vulnerable market”.
“The biggest problem I’ve got is there’s an abundance of suburbs that have crept up to the $750,000 price point, where in reality, they probably should be at $600,000 or lower,” Mr Lardner said.
“We’ve found this rush into the market at the affordable end is creating a very different heat.”
Loan Market Wavell Heights broker Cara Haynes said many young buyers were stretching themselves to secure properties before prices climbed even further.
“They’re fighting for what they can under that $1m mark,” Mrs Haynes said. “Many of my clients want that two-bedroom apartment so they can rent out a room if things get tight, so they’re looking at what they can for their budget and going hard on those suburbs.
“The entry-level problem is that when they’re maxxed out on their budget looking for one-bedroom apartment, they’ve got to move further and further out — but they’re willing to do that.”
Loan Market Wavell Heights broker Cara Haynes.
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Real Estate Buyers Agents Association of Australia president Melinda Jennison said Brisbane’s affordable market had continued to experience “rapid price escalation”, even amid rising rates and cost-of-living pressures.
“For many reasons buyers have become more cautious in the past quarter, but we’re still seeing a lot of activity in the more affordable segment of the market,” Ms Jennison said.
“We have still seen, in many instances, more than one offer on a property.”
But Ms Jennison warned the federal government’s tax changes announced this week could make it harder for younger Queenslanders relying on “rentvesting”.
“Many first homebuyers live in locations that they simply cannot afford to buy in, so under the old scheme, those people always had the opportunity to build additional equity by rentvesting in a more affordable market,” she said.
“We’ve seen many instances where they will later sell that investment and use the proceeds to purchase their home in the location they work, so that segment really will be impacted by these changes.”
REBAA president Melinda Jennison.
Place Purpose Group agent Megan Alexander said many first homebuyers were feeling overwhelmed trying to work out what they could realistically afford as prices, interest rates, and living costs continued to rise.
“We’re definitely seeing buyers become more cautious and selective compared to earlier this year, but the serious buyers are still motivated to secure a foothold in the market,” she said.
“A lot of younger buyers are worried that if they wait too long, entering the market could become even harder, so there’s still strong emotion tied to home ownership despite the uncertainty.”
The figures come one year after stamp duty was abolished on new homes for Queensland first-home buyers.
New Queensland government figures show 2,985 first-home buyers have saved a combined $56m in upfront costs since the changes came into effect on May 1 last year.
Logan-Beaudesert, Ipswich and Moreton Bay North have emerged as the key hotspots for first-home buyers building or purchasing new homes.
“Scrapping stamp duty for first home buyers was one of the most important steps we’ve taken to make home ownership more accessible for Queenslanders, after the former Labor Government shut the door on the dream of home ownership,” Queensland Treasurer David Janetzki said.
“For a decade Labor’s housing crisis locked Queenslanders out of the housing market however we believe every Queenslander deserves a place to call home and abolishing this tax was critical in helping make that dream a reality.”
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