Southern capital flows as interstate investors pivot to South East Queensland property

Rafter Myers

Interstate capital is rapidly shifting away from southern property markets and into South East Queensland as investors reassess risk, return and regulatory settings across the eastern seaboard according to Sunshine Coast based property investment and development firm Rafter Myers.

Director Remi Rafter said high-net-worth investors and family offices from New South Wales and Victoria are increasingly redirecting capital north, drawn by stronger relative value, fewer planning constraints and more favourable tax conditions.

“The shift has certainly accelerated over the past 12 to 18 months and reflects a broader rebalancing of Australia’s property investment landscape. We are seeing a clear rotation of capital out of southern markets and into South East Queensland and this is reflected in our own business where our forecast gross realisation of current projects sits at around $500 million.

“Investors are becoming more selective about where they deploy capital, and the fundamentals of the Sunshine Coast region including population growth, infrastructure investment and relative affordability are increasingly difficult to ignore.”

Recent research from both Colliers and CBRE has confirmed that both the Sunshine Coast’s industrial and retail markets are continuing to outperform, driven by strong population growth, tourism, and limited supply.

CBRE’s Sunshine Coast Market Report 2025 highlights the industrial sector as a key performer, with rising rents and land values reflecting sustained demand from logistics, manufacturing, and local business expansion. The report notes that constrained land availability and ongoing development challenges are expected to keep supply tight, supporting continued growth across the region.

Retail performance is also strengthening, with Colliers’ Sunshine Coast Market Overview (2025) pointing to increased consumer confidence, steady growth in retail spending, and the ongoing impact of tourism. Limited new development is maintaining low vacancy rates and underpinning stable leasing conditions across key retail centres.

The report states that with demand continuing to outpace supply, the Sunshine Coast is emerging as one of Queensland’s most resilient and high-performing commercial markets, with both sectors well positioned for further growth.

Mr Rafter said the trend is emerging despite ongoing softness in office markets across Sydney and Melbourne, with the Sunshine Coast diverging from national patterns. 

“Commercial vacancy rates in the broader Sunshine Coast region remain below 4 per cent, while competition for assets has intensified, particularly for off-market opportunities. Capital raised is increasingly being oversubscribed, with investors competing for limited stock. In some cases, assets are being secured below replacement cost, pointing to pricing inefficiencies that are attracting opportunistic capital.

“We are also seeing return expectations reshaping investor behaviour with some projects  targeting returns of up to 80 per cent over a five-year period, this is significantly outpacing what is currently achievable in more mature southern markets,” Mr Rafter added.

RM Capital, the funds management arm of Rafter Myers has recently assembled a portfolio of six Sunshine Coast sites spanning residential, industrial, retail and commercial assets with a combined value approaching $40 million. The portfolio stretches from Beerwah in the hinterland to Gympie north of Noosa and reflects growing investor appetite for diversified exposure to the region’s expansion.

“Investor demand for these opportunities has been immediate, with some funds fully subscribed within days, there’s been occasions where they have opened and closed within the same day which underscores the urgency of capital seeking placement.

“Forecast returns across the portfolio range from approximately 59 per cent to more than 100 per cent, reinforcing the scale of opportunity perceived by private investors. At the same time, planning delays, rising construction costs and limited land availability are slowing the delivery of new projects across the Sunshine Coast, creating a widening gap between capital inflows and available stock,” Mr Rafter said.

Peppi Bueti Director Sunny Comms tel: 0447 1313 06