Police allege he yelled the Islamic phrase ‘Allahu Akbar’ – meaning ‘God is great’ – during the knife attack and his subsequent arrest at Shelley’s Backpackers on Ninth Street in Home Hill, south of Townsville.
An English woman, 21, died at the scene, while a 31-year-old English man remains in a critical condition in hospital.
A British woman was killed and another British man critically injured in the attack. (9NEWS)
A 46-year-old local man received a stab wound to his leg and has since been released from hospital, and a dog was also killed.
Forensic police at the scene. (9NEWS)
More than 30 people witnessed the attack.
The 29-year-old French man had reportedly left the scene of the attack and returned to his upstairs bedroom by the time police arrived about 11.15pm, and did not resist arrest.
Police allege he yelled ‘Allahu Akbar’ during the attack and his arrest, and are investigating whether mental health or drug use may have been factors, Queensland Police Service Deputy Commissioner Steve Gollschewski said today.
“Whilst this information will be factored into the investigation, we will not be ruling out any motivations, whether they be political or criminal,” he said.
“There is no known ongoing threat to the community as a result of this incident… This is not about race or religion, it is individual criminal behavior.
“There are a number of different circumstances that could be at play here.”
Shelley’s Backpackers in Home Hill. (Google/AAP)
Guests at the backpackers today. (9NEWS)
The man had been in Australian on a temporary visa since March, and police had no record of him, Dep. Comm. Gollschewski said.
The Australian Federal Police are also involved in the investigation, and Commander Sharon Cowden appeared at the same media conference.
Queensland Premier Annastacia Palaszczuk said she was aware of the attack.
“I’ve heard preliminary reports and I understand that the police will be addressing that issue later today, I’m still getting updates,” she said.
The French man remains in custody.