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The Queensland regions where homes are under $500,000

Despite surging immigration and tight supply, it’s still possible to find a home in Queensland for under $500,000, according to an expert.

According to InvestorKit, across Bundaberg, Townsville, Rockhampton and South Cairns there are a number of areas that remain affordable but still have good growth potential.

InvestorKit Head of Research and Founder Arjun Paliwal said the four regions have a number of factors that make them appealing but are still reasonably priced.

“Not only do these areas have affordable house prices, but they also show the potential for further capital growth, healthy rental yields and expected rental growth in the short-term due to the high pressure in their sale and rental markets,” Mr Paliwal said.

“These locations also stand out because of internal migration towards affordability and lifestyle alongside their thriving local economies due to industry diversification and infrastructure investments.”

Mr Paliwal said Bundaberg had a median house price of $445,000 even after experiencing 23.6 per cent growth over the past 12 months.

“During a time where interest rate rises occurred month after month, Bundaberg stood out as one of Australia’s top 10 performers in 2022,” he said.

“There is more room for growth, as the 10-year average is still under 25-year averages for annual growth.”

He said while rentals remained at crisis levels, the vacancy rate had increased slightly to 0.6 per cent due to more supply coming onto the market. 

“Investors who own in the area can expect rental yields to stay strong at about 5.3 per cent due to the tight market,” he said.

For those looking to purchase in the area, Mr Paliwal predicts Bundaberg’s long-term price growth and rental growth are moderate, with further space to increase.

According to Mr Paliwal, Rockhampton still has a median house price of $385,000 and the region has steadily recovered since 2020.

“The ongoing pressure in the Rockhampton rental market over the past few years has seen a strong rise in median rents,” he said.

“The average number of rental listings have decreased by 3.8 per cent and the vacancy rates still remain below 1 per cent.”

Mr Paliwal said there will be a strong future upside in the area for both price and rental growth, as current performance remains well-under long-term averages, while the current market heat indicators are far better than any year over the past decade – indicating change is occurring.

Mr Paliwal said Townsville had a reasonably priced median of $400,000 and has been a standout nationally considering the declines many parts of Australia saw during the rate rise cycle. 

In the past 10 years, the median price has increased 8.7 per cent, far below the long-term average.

“Vacancy rates in Townsville still sit well below 1 per cent, despite the number of rental listings increasing by 0.3 per cent over the past year,” he said.

“The pressure within the rental market has led to a strong rise in median rents over the past 15 months, even then, rents have only grown by 18.9 per cent over the decade.”

He said even with a high level of outgoing charges in the form of insurance, property management and rates, it’s important to note the high yield neutralises many of these points, bringing it back to a more normal rental yield. 

“What can’t be underestimated here is the sheer level of shift in the city’s local economies,” Mr Paliwal said.

“From one of the worst in 2016 to now one of the nation’s best in unemployment levels, spending and more. 

“Prices and rents in our opinion remain heavily undervalued here, irrespective of what one may think of with outgoings, weather and more.”

Finally, Cairns South – which includes areas such as Woree, White Rock, Mount Sheridan and Bayview Heights – has a median house price of $482,500, which has increased 12.2 per cent over the past 12 months.

Mr Paliwal said the past decade had seen a balanced increase of 47.7 per cent in house prices in the area, still below its long-term averages, offering room for growth.

 “The vacancy rates for rentals in the region is at crisis levels and have decreased to 0.4 per cent, however the pressure within the rental market has resulted in a strong rise in median rents over the past 15 months,” he said.

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.