It has been very clearly documented that the property prices in both NSW and Victoria have been climbing over the past decade to tremendous heights, however, are now experiencing decline in value. This has strongly contributed to a resurgence in population growth in Queensland due to interstate migrants moving north in larger numbers as infrastructure investment and higher resource prices act to attract them. Deloitte’s latest business outlook report notes that the mining investment downturn is over and tourist inflow is pushing a Queensland revival.
The Queensland Treasurer has noted that commodity industries are booming and that once-in-a-generation government infrastructure of $46 billion, combined with excellent weather makes for a more liveable and affordable lifestyle, which is attracting many Sydneysiders. In fact Queensland now leads the nation in interstate migration and Commsec’s State of the States’ report details that despite employment figures which need to improve there has been a strengthening in Queensland dwelling starts. There has been a 20% increase on the decade average making it now third in the nation. Moreover, with population growth now faster than the national average for more than a year and over 186 000 new jobs having been created since 2015, major forecasters are predicting strong economic growth to come.
Population growth is usually accompanied by rising property values but so far this has not happened. While this, to some degree, reflects higher than average unemployment figures it also means that there is a strong future possibility of appreciating property prices making the current market attractive in value. While it is likely that the growth in population will eventually result in lower unemployment figures and increased house prices there are reservations to be noted.
The relatively recent overbuilding of inner Brisbane apartments has made some negative impact, though analysis suggests not very much. One problem is that many of Queensland’s interstate migrants are economic refugees from Sydney trying to make a new start. This means that the net economic benefit per head of population is not rising as it is in Victoria, the strongest state economically speaking, and NSW, the second strongest. The strong nexus between house prices and economic benefit per head of population explains the relative sluggishness in Queensland. This brings with it the possibility of continued stagnation in house prices. But, the outcome is that, while this remains so, housing in south-east Queensland and Brisbane represents better value for money than in the southern capitals.
In the end better overall economic growth will give impetus to both employment and the housing market.