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As we head into the second half of 2024, Brisbane's commercial property market is showing impressive growth. This surge is fuelled by a booming population and smart investments.
Queensland's rapid population increase has made Brisbane a hot spot for major property investors, diverting attention from other states. According to the Australian Bureau of Statistics, the population grew by 2.7% in the 12 months leading up to September 2023. The state government projects the population will hit 5.54 million in 2024 and grow to 6.895 million by 2041, mainly due to people moving from New South Wales and Victoria. This influx has boosted demand across all property sectors—residential, commercial, retail, and recreational.
The Golden Decade
Queensland is experiencing what experts call a "Golden Decade." A JP Morgan Australian REITs report highlights Queensland as having the best-performing real estate market in the country. However, rising construction costs have delayed or even cancelled some projects, driving up prices across various real estate types. This limited supply has made Brisbane’s CBD office market the strongest in Australia.
Even though there’s a slight dip in demand for third-party logistics in the industrial sector, it remains healthy. Rent growth is expected to stay strong at around 10% in 2024. Despite land constraints, investors continue to see South East Queensland as a prime investment destination.
Retail demand, particularly for smaller convenience and neighbourhood centres, is also robust, supported by ongoing population growth. However, the construction sector faces significant challenges, especially due to labour shortages worsened by competing infrastructure projects. High labour costs put pressure on builders, and many struggle to stay in business.
Looking Ahead
We expect Brisbane's commercial property market to remain strong for the rest of 2024, with continued demand across various sectors.
The trends in Brisbane's commercial property market—such as population growth, increasing demand, and supply constraints—have varying impacts on different stakeholders, including commercial property owners, investors, and tenants. Here’s an analysis of the advantages and disadvantages for each group:
| Stakeholder | Advantages | Disadvantages |
|---|---|---|
| Commercial Property Owners | - Increased property values due to high demand and limited supply. Real Commercial, 2024 - Higher rental yields as rents rise with demand. Property Inc, 2024 |
- Rising construction and maintenance costs due to labor shortages. Real Commercial, 2024 - Potential vacancy risks if market conditions change. |
| Investors | - Strong investment returns due to rising property values. Real Commercial, 2024 - Diversification opportunities across different property types. API Magazine, 2024 |
- Market volatility risks if prices rise too quickly and then correct. Property Inc, 2024 - Increased competition for prime properties, leading to higher purchase prices. API Magazine, 2024 |
| Tenants | - Improved amenities as landlords invest in property upgrades. Commercial Real Estate, 2024 | - Higher rents due to increased demand and limited supply. Commercial Real Estate, 2024 - Limited space availability, especially in premium locations like Brisbane’s CBD. Real Commercial, 2024 |
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