Forget the traditional State of Origin clash between Queensland and New South Wales – the real competition is unfolding on the property stage, where Western Australia and Queensland are locked in a fierce battle for the title of Australia’s premier investment state.

This rivalry, reminiscent of the classic east coast versus west coast dynamic, has taken on new significance as property markets surge and investor sentiments shift.

So, if WA and Queensland went head-to-head in a property market battle, who would win the gold medal?

WA’s property market has been on a remarkable upward trajectory, with Perth and its regional areas experiencing significant price increases over the past year.

This surge has seen Perth dominate all ten spots on the list of the fastest-growing property markets for the 2023-2024 fiscal year. The city’s growth has been fuelled by a mix of attractive affordability, enticing rental yields, and a strong local economy.

By June 2024, the median house price in Perth had climbed to a record-breaking $665,000, reflecting an 18.8 per cent increase from the previous year. The median unit price also saw an impressive rise, reaching $445,000—just shy of the 2014 peak.

As the property market continues to evolve signs are emerging that WA’s dominance might be cooling.

Despite the impressive growth, investor sentiment towards WA is showing signs of shifting. Perth’s property market, once the clear favourite, is now facing stiff competition from Queensland, as was highlighted in the latest API Magazine quarterly property sentiment report that showed respondents turning away from WA and towards the east coast.

Long a preferred destination for property investors, Queensland is quietly reclaiming its top spot.

Investor interest in Queensland has inched up to 33 per cent, while WA has seen a sharp decline, with 25 per cent fewer respondents now considering it the best investment option.

This eight percentage point drop marks one of the most significant shifts in sentiment recorded by API Magazine, highlighting a potential pivot in Australia’s property investment landscape.

This shift in sentiment marks a turning point in the long-standing property battle between WA and Queensland.

The early 2000s saw Perth’s property market reach its zenith, buoyed by a flourishing resources sector and a booming economy.

The era was characterised by rapid price growth, with the city’s skyline expanding in tandem with its fortunes. The global financial crisis of 2008 and the subsequent mining downturn in the 2010s brought about a sharp market correction.

As China’s economic growth slowed and commodity prices tumbled, Perth’s once-booming mining sector faced significant cutbacks, project delays and closures. This downturn reverberated through the local economy, leading to job losses and a cooling property market.

Perth’s property market resurgence is not only driven by relative affordability, strong rental yields, and economic resilience but also by strategic efforts to diversify its economic base.

In response to earlier downturns, the government focused on stimulating growth in sectors like tourism, education, and healthcare, while fast-tracking infrastructure development and urban renewal projects to revitalise the city.

These initiatives helped stabilise the market and laid the foundation for the current surge in property prices. But as Perth strives to maintain its momentum, Queensland has been quietly staging its own comeback, adding another layer to the competitive landscape.

Brisbane property defied expectations

Brisbane, the jewel of Queensland’s property market, has experienced its own dramatic highs and lows.

Following a blazing run of growth from the Covid trough to the market peak in June 2022, where home values surged by a staggering 42.7 per cent, Brisbane faced a sharp price correction.

Yet unlike other markets that have struggled to recover, it has bounced back with renewed vigour.

Earlier this year WA was the preferred choice of 24 per cent of respondents. The eight percentage point slide is the one of the largest shifts in sentiment since APIM has polled its readership. Source: APIM Q2 2024 Sentiment Report

Brisbane has recorded a continuous run of growth since 2023 that has pushed prices back up to record highs, leading to Brisbane assuming the position as Australia’s second-most expensive city, behind Sydney.

Several factors have contributed to Brisbane’s remarkable resilience.

The city’s superior affordability compared to other major markets, combined with an extended period of high interstate migration (looking at you Sydney and Melbourne), has bolstered housing demand in Queensland.

Brisbane’s property market has continued to defy expectations.

Listings remain low. New listings are now up compared to 12 months ago but total listings are still down, indicating a persistent supply shortage.

Strong buyer demand has also driven sales volumes, with the median days on market (DOM) dropping to just 20 days in the June quarter, down from 22 days a year earlier.

As Brisbane’s property market continues its upward trajectory, the rivalry between Queensland and Western Australia intensifies.

While Perth’s property market remains a formidable contender, maintained by a strong economy and a resilient housing sector, the question looms: can WA maintain its lead, or is Queensland poised to take the gold in Australia’s property investment race?

As investors weigh their options and the battle lines are drawn, the outcome of this east coast versus west coast showdown will be one to watch.

Credit: Belinda Botzolis | Add Valuer