The latest monthly data on Queensland home values has confirmed what buyers already know — prices are booming.
Key points:
This month marks the sharpest monthly increase in Brisbane house prices since 2007
Experts say the rise is due to low mortgage rates and a shortage of housing stock
Demographers say net interstate migration to Queensland is the highest it has been in 20 years
Figures released by property analysts CoreLogic showed prices grew in almost every region of Queensland in February.
Across Brisbane, prices rose by 1.5 per cent in one month, taking annual growth to 5 per cent.
The February increase is the steepest rise since November 2007, when the monthly growth rate was 1.72 per cent.
In Brisbane's east, house prices went up by nearly 10 per cent in 12 months.
The Gold Coast and Sunshine Coast also posted strong price hikes, rising 2.6 per cent and 2.5 per cent in February, which pushed the 12 month gains up to 10.5 per cent and 11.2 per cent.
Townsville was the only region to record a drop with prices falling 0.6 per cent in February.
But the north Queensland city still posted a 12-month increase of 6.2 per cent.
CoreLogic's Head of Residential Research Australia Eliza Owen said there were several key factors pushing prices up.
"The main drivers are record-low mortgage rates and relatively low levels of stock on the market and that's something that's driving an upswing across most areas of Australia," she said.
"But what's really special about south-east Queensland in particular is the fact that internal migration is so strong.
"The Gold Coast and Sunshine Coast have been top destinations for internal migration for years now.
"In an environment where there's no international migration, that internal movement is really benefiting markets relative to other parts of the country."
Ms Owen said prices were expected to keep rising in 2021.
"In terms of prices steadying or falling across Queensland, I wouldn't expect to see that until we get a significant uplift in the amount of stock on the market which is unlikely as people aren't really moving as much at the moment," she said.
"Or we see the cash rate increase, and as such mortgage rates would increase, and again that's not something we would expect until the inflation target is between 2 and 3 per cent.
"[We would then] see the unemployment rate being really tight at around 4.5 per cent."
'We've missed the boat'
Emma and Grant Parkin were planning to move out of their townhouse and into a slightly larger home with their two young daughters.
The couple was one of 17 registered bidders for a house at Indooroopilly in Brisbane's west that went to auction in late February.
Emma and Grant Parkin wanted to buy a larger home but say rising house prices mean they can't afford it.
It sold for more than $1.5 million — well above what they were expecting.
"We thought we were in with a chance and in about 20 seconds it was already above what we had planned to spend," Ms Parkin said.
Mr Parkin said prices "have gone through the roof" since the threat of the coronavirus pandemic eased in Queensland.
"You've got people who can't travel, so where are they going to spend their money?" he said.
"People can now work from home a lot more … so people are spending money on property and motor vehicles and consumables."
Mr Parkin said the young family would now do some renovations to their townhouse and try to buy a larger home in a couple of years.
"I feel like we've missed the boat this time around and the concern is how high does it go?" he said.
"Property prices seldom if ever slow down and stop and decrease.
"If anything, the rate of increase just slows slightly and I think with the interstate influx and people working from home, it's just gone through the roof."
Not a bubble, says academic
Finance professor from the University of Queensland, Shaun Bond, said a strong up-tick in demand was affecting house prices.
"We've had a lot of people moving back to Australia from overseas, we've had almost half a million people by the latest count, we see record low interest rates," he said.
"Plus, we see a lot of people rethinking their options, people choosing not to be in inner-city apartments, they're choosing to think about lifestyle areas, they're going for coastal areas, sometimes they're looking at regional areas, even within a city like Brisbane they're starting to think about larger suburban properties."
Professor Bond said while price growth was strong, he would not classify it as a bubble.
"There's a lot of debate about whether bubbles even exist, but we tend to think of bubbles being driven by speculative excess and I don't believe we're seeing that in this case.
"Yes, we're seeing a strong up-tick in demand, but I feel like that can be explained by several of the factors we've discussed, plus the strong economic recovery we're seeing in Australia as well — Australia has weathered the COVID crisis very well.
"The underlying economy is actually in a much better place than people thought it would be at this stage."
Professor Bond said the rollout of the Coronavirus vaccine in Australia could affect the housing market.
"One of the things may be that it suddenly gives people more choices, so maybe some of those expats who returned from overseas may decide that they're going to go back to the US, back to the UK to work or resume their careers there — people might start to travel again."
Australian Bureau of Statistics (ABS) demographer Andrew Howe said over the last year Queensland had a net inflow of about 25,000 people.
"That's the highest Queensland's been for around 20 years," he said.
"Although [it's] still not quite as high as the peak years for interstate migration to Queensland in the early 1990s."
Provisional internal migration figures from the ABS showed Queensland had a net gain of 7,237 people in the September 2020 quarter.
The number of people arriving in Queensland from other states fell in comparison with the previous quarter.
But, crucially, fewer people left Queensland, with departures at their lowest level since December 1994.
In net terms, Queensland gained more than 4,000 people from New South Wales in the September quarter.