Why Queensland Remains a Strong Frontier for Property Developers and Investors

The Australian property narrative has long been dominated by the heavyweights of Sydney and Melbourne. However, while southern markets are navigating some headwinds (we’re seeing cautious bidding, rising land taxes, and regulatory headwinds) Queensland appears to be operating on an entirely different trajectory.

We’re seeing this firsthand. From the successful settlement of coastal projects in Zilzie to the rapid sell-out of land subdivisions in Bundaberg, the Sunshine State is no longer just a holiday destination or a lifestyle choice. It has matured into a sophisticated, high-growth frontier for both industrial and residential development.

Let’s take a closer look at why Queensland remains a strong frontier for developers and investors.

1. Steady population & demand growth.

Unlike the cooling trends observed in Victoria and New South Wales, Queensland’s demand has remained relatively resilient. Data suggests a market that continues to expand.

• State-wide population surge: Queensland’s net interstate migration continues to lead Australia, reaching nearly 21,595 for the 12-months ending 30 June 2025.
• Regional and metro price growth: Regional Queensland’s top-performing centres significantly outpaced both Greater Brisbane and the national average in the 12 months to March 2025, with Townsville leading at +26.45%, followed by Rockhampton (+25%), Gladstone (+23.81%), and Mackay (+22.17%), compared to Greater Brisbane’s annual growth of +11.18%.

This influx of people creates a fundamental need for housing and infrastructure that southern developers are increasingly finding attractive.

2. The wealth migration.

Long-term residents of Brisbane have seen their property values rise by 76% over the past five years. With nearly 99.7% of Brisbane resales being profitable (yielding a median gain of $400,000) local owners have seen substantial equity gains.

Much like the trend we previously saw in Melbourne, there are indications that this wealth is being redeployed into secondary and regional markets:

• Regional hubs: Compared to capital cities, established centres like Toowoomba ($683,500 median) and Townsville ($595,500) offer higher yields and lower entry costs for the “mum and dad” investor class.
• Seaside locations: Coastal “sea-change” destinations like Zilzie are attracting a growing demographic of downsizers and retirees.
• Downsizer movement: Data from the ABS points to a significant trend of later-life relocations for downsizing and lifestyle purposes. Queensland appears to be a primary beneficiary of these shifts, as retirees sell high-value southern assets and move north with significant cash reserves.

3. Multiple Economic Drivers.

Queensland offers a variety of asset classes and markets. At Bowery, we lend against a broad geographic spread because different regions offer different economic drivers.

From the hinterlands of Toowoomba to the tropics of Cairns and the industrial areas of Gladstone, developers have the ability to diversify their portfolios within a single State.

Four regional towns we’re seeing potential in for 2026.

Source: https://www.reiq.com/resources/media-releases/queensland-property-stands-the-test-of-time-says-reiq

4. Industrial assets.

While residential gets the headlines, the Queensland industrial sector is where a lot of the excitement is happening. In 2024, Queensland’s industrial investment volumes overtook Victoria to rank second nationally. Brisbane’s industrial market recorded its strongest year on record in 2025, with transaction volumes rising 170% year-on-year and outperforming the city’s 10-year annual average by almost double.

The demand is fuelled in part by the eCommerce boom and a need for automated warehousing. Industry forecasts suggest that Brisbane alone may require 800,000sqm of new industrial space leading up to 2032.

5. Favourable property tax environment.

For developers, the “where?” is often dictated by the “how hard?”. Queensland currently offers a more attractive political and property tax landscape than its southern neighbours.

• Land tax thresholds: Queensland’s current land tax-free threshold of $600,000 for individual investors is twelve-fold Victoria’s equivalent threshold of $50,000 — and the gap widens further for property held in trusts, where Victoria’s threshold drops to just $25,000 compared to $350,000 in Queensland (14x). By contrast, NSW’s individual threshold of $1,075,000 is the most generous nationally, though its higher property values mean many investors breach it regardless. For investors building a portfolio of mid-range assets, Queensland’s settings can offer meaningfully lower effective holding costs at the same land value — keeping more assets below the taxable threshold and reducing the rate applied to those above it.
• No vacant land tax: Unlike Victoria’s progressive Vacant Residential Land Tax (VRLT), Queensland does not overly burden developers for holding vacant land during the planning phase, providing breathing room for project staging and financing.
• Stamp duty advantage: On a $500,000 property, Queensland’s stamp duty is approximately $15,925, whereas in Victoria, it can climb to $25,070.
• Incentives: In Queensland, the elimination of stamp duty for first-home buyers purchasing new homes and vacant land (effective May 2025) stimulates demand for new developments, supporting project sales for builders and developers.
• First Home Owner Grant: Queensland’s First Home Owner Grant of $30,000 — extended to 30 June 2026 — is currently triple the $10,000 on offer in both Victoria and NSW for comparable new home purchases under $750,000. While the elevated rate is temporary (reverting to $15,000 after June 2026), it meaningfully amplifies demand for new builds in the near term. For developers, a better-capitalised first-home buyer cohort may support stronger project pre-sales, faster sell-down of entry-level stock, and reduced financing risk across the project lifecycle.

6. The 2032 Olympics & Paralympics.

We can’t discuss Queensland’s future without touching on the 2032 Olympic and Paralympic Games. This three-week sporting event is a multi-billion-dollar infrastructure catalyst that is expected to benefit the entire State for years to come. Current estimates project a total economic and social benefit of up to $8.1 billion for Queensland alone, with the “Green and Gold Runway” driving development for years before the opening ceremony.

Historically, some Olympic host cities see a notable uplift in property values and urban renewal in the decade leading up to the event. While Brisbane’s Woolloongabba and Hamilton are obvious targets (the main stadium and the Athlete’s Village), the “Games for all of Queensland” mandate means infrastructure upgrades in the Gold Coast, Sunshine Coast, and Townsville may support long-term capital appreciation opportunities. This infrastructure spend is expected to be supportive of future demand and accessibility.

Navigating the risks of a high-growth frontier.

For developers and investors to succeed in 2026, optimism must be met with a pragmatic assessment of the Sunshine State. The very factors driving growth—infrastructure and migration—are also creating a unique set of structural risks.

1. The construction crunch & the feasibility trap.

The biggest hurdle for many Queensland developers today isn’t a lack of demand. With projects competing for the same pool of labour, even getting a project off the ground can be challenging.

Current forecasts suggest a shortfall of over 27,000 workers in 2026 alone. This labour scarcity, combined with construction costs rising at 5% per annum in Brisbane (and even higher in regional hubs like Townsville), means that many projects that “stacked up” on paper 18 months ago are now beginning to struggle with feasibility.

2. The Brisbane margin squeeze.

In Brisbane, we’re witnessing a narrowing delta between building costs and end-sale values. The median house price is now past $1.13 million, just one place behind Sydney.

We’ve seen several large-scale developments across the South-East delayed or cancelled because the anticipated profit margin was swallowed by escalation during the planning phase (Enayble). For many developers, the risk is no longer “will it sell?” but “can I build it for less than the market will pay?”.

This squeeze is forcing a shift toward smaller, high-end boutique projects where the end buyer is less price sensitive.

3. Price fatigue.

After a period of supercharged growth—with Brisbane dwelling values up over 90% in a decade—there are signs of “affordability fatigue” emerging. While the market outperformed national averages in 2025, forecasts for the latter half of 2026 suggest a moderation.

As Brisbane’s median price inches closer to Sydney’s, the affordability magnet that once pulled interstate buyers north is losing some of its pull. There may be opportunity for discerning investors to look for “micro-markets” with genuine utility—like industrial hubs or regional catch-up plays—rather than relying on a general market rise.

4. Political risk & the policy pivot.

With the recent shift to a Crisafulli LNP Government, we have seen significant structural changes, such as putting on hold the Best Practice Industry Conditions (BPIC) to help lower build costs. However, a new government often brings a “re-prioritisation” of infrastructure spend.

While the Olympics are a multi-party commitment between Olympic committees and governments, the timing and scale of secondary infrastructure (the roads and rail that make regional subdivisions viable) can shift based on budget pressures. Developers must remain agile, as policy pivots around land tax, rental regulations, and developer donation laws continue to evolve.

The Bowery perspective.

As we support the move North, we’re seeing two distinct groups moving into the Queensland market.

1. Interstate developers: Existing clients from Victoria and NSW who are diversifying away from high-tax environments, seeking the “upside” and clearer planning pathways that Queensland currently offers.
2. Local specialists: Queensland-based developers introduced to us by local brokers who trust Bowery’s appetite for quality metro, regional and coastal assets.

We recently backed a coastal residential development in Zilzie aimed at the downsizer market and an Ashfield subdivision in Bundaberg. These are examples of how well-regarded Victorian developers are backing Queensland.

What this means for investors.

The shift in Queensland’s market from a lifestyle alternative creates a range of considerations for those looking to deploy capital in 2026:

• Prioritise “yield and growth” hybrids: The era of “buying anything and waiting” appears to be over. Smart investors are targeting middle-ring units (10–20km from the CBD), where vacancy rates remain below 1% and yields sit comfortably above 4%.
• Look to the regional cash-flow engines: For “mum and dad” investors, the regional story remains compelling. Centres like Townsville and Cairns are supported by a diverse base of defence, healthcare, and resource sector employment that is less sensitive to the interest rate cycles of the capital cities.
• Industrial is the new “star of the hour”: For sophisticated portfolios, the 170% surge in industrial transaction volumes likely signifies a major shift. The right industrial locations could offer a rare combination of double-digit rental growth and supply scarcity, making them a worthy consideration for investors.
• The “Olympic Runway” is a 10-year strategy: Investors could potentially focus on the “green and gold” corridors—suburbs like Woolloongabba and Bowen Hills. Here, transport upgrades like the Cross River Rail will likely continue to drive desirability long before the first torch is lit.

Looking to fund your next project in the Sunshine State?

Our borrowers value that we aren’t just “big city” lenders. Whether it’s a metropolitan industrial park in Wacol or a regional subdivision in Maryborough, we work hard to understand the nuances of the Queensland landscape.

Contact the Bowery team today to discuss how our appetite for Queensland property can help you secure the leverage you need to grow.