What is driving the migration into Queensland?
There's no hiding the fact that over the past 12 months, Queensland has seen an influx of Sydneysiders and Melburnians migrating up to The Sunshine State. But what’s driving the migration?
According to statistics published by CoreLogic, in the month of April 2021, Australian property values increased by 1.8 per cent. A six-fold increase over and above the average monthly movements in the property values recorded over the past decade. To put it into perspective, it represents an $11,240 increase in value to the average home and an even larger increase for property in Sydney.
As prices continue to increase, there’s no surprise that housing affordability in Sydney will stay on the decline. In fact, data suggests that middle-income households can no longer afford 75.5% of the houses on the market and a further 41% of units. Furthermore, as we continue to see interest rates rise, the fear of unserviceable mortgages will become apparent therefore driving further migration to Brisbane and other parts of South-East Queensland such as the Sunshine Coast and Gold Coast, where property values are lower and by default more affordable.
Shifting the focus to Melbourne, migration north has been driven by a number of different factors, the largest being the effects the pandemic has had on the city due to lockdowns resulting in a change of lifestyle. Throughout 2020, Melbourne saw the net loss of 26,000 people, the highest loss the region has ever experienced on record. It is believed that half the outflow of the population moved to other parts of Victoria and the remaining half moved interstate.
So why has Brisbane seen an increase in population?
Throughout 2020, Queensland saw a net gain of 30,000 people equating to a 1.9 per cent increase in its population, pushing migration into the state to record levels. The movement is being driven by the search for cheaper housing, a better lifestyle, and a more affordable cost of living, as well as Brisbane providing a strong jobs market for interstate residents.
Looking further into the affordability, in Brisbane, brand new spacious 1 bedroom units, 3km from the CBD are currently being sold for around $380,000, alternatively, a brand new luxurious 1 bedroom apartment within the master-planned precinct of Queens Wharf perched on the river are currently being sold for $580,000 in the heart of the city. When you compare this to Sydney, it massively trumps the affordability question, where median house prices currently sit just above $1,300,000.
With the exodus of Sydneysiders and Melburnians heading up North, property values and capital growth are already experiencing the results of the migrations. This presents the question, is Brisbane a good place to invest? The very short answer in my opinion is yes. Buying in Brisbane provides the opportunity to buy a premium investment property that will benefit from substantial growth over the medium to long term. On the basis investments in Queensland perform well over time, it provides the future potential to pull out the equity of investments in the region assisting with funding the deposit of a property in Melbourne and in particular Sydney.
Furthermore, following the Queensland Budget announcement last week, there’s no doubt there will be unprecedented growth. The Queensland Government has stated that they will be allocating $1bn into the housing investment fund which will be used to drive new housing supply. A further $1.8bn will be spread across 4 years to create more social housing and upgrade existing portfolios.
In terms of infrastructure spending, a further $14.7bn will be allocated for 2021-2022, with 61.2% to spent outside of the greater Brisbane area, supporting 29,800 jobs across the state providing a further driver for investment and property values.
Internal migration, overseas migration (which has been minimal over the past 12 months for obvious reasons), and the natural increase in birth rates, fuelling continued population growth, are the three factors driving the population increase in Queensland, creating a powerhouse impact in the state. The next national census is in August 2021, this is likely to provide some very interesting statistics around the growth of Queensland as an attractive place to invest.