Will Queensland’s rising population save its property market?
Several have claimed, in response to our recent posts, that Queensland’s rising population growth, fuelled by interstate inflows from both Sydney & Melbourne, will create a ‘mini-real estate boom’ in south-east Queensland.
Could they be right? Well, sadly, the stats tell a very different story.
Just spend a few seconds looking at the three charts below.
- For the record, at present Brisbane dwellings are 38% & 28% cheaper, respectively, than in Sydney & Melbourne . In early 2003, the ratio was the same between Sydney & Brisbane & Brisbane’s prices back then were 19% cheaper than Melbourne’s.
- One would think that rising home prices would get more residents to start leaving both Sydney & Melbourne. But maybe it is more than just this that matters.
- Migrants, mostly – from interstate or overseas – need to work. Unless more full-time jobs are created in Queensland & wages start to accelerate, then Queensland’s population growth will continue to slow. As we have been saying for some time, the key to a sustainable Queensland recovery is job & wage growth.
- The 2002 to 2004 rise in net interstate migration to Queensland coincided with, on average,45,000 new full-time jobs being created each year over that three-year period. Many were resource-based. The 2011 & 2012, mini-rise in Qld’s net interstate migrant intake also coincided with full-time job growth – increasing by 30,000 per annum – around that time. Since January 2013, Qld has lost 20,000 full-time positions. Employment growth matters.
- Amenity is higher in Sydney & Melbourne. There is nothing wrong with Brisbane; I have chosen to live here. It just hasn’t got the 24/7 lifestyle that the southern capitals offer. And that appears to be increasingly important to many & especially young adults. Overseas migrants also favour Sydney & Melbourne, and sometimes Perth, over much of Australia.
- Climate alone doesn’t cut it anymore. In fact, it never did – jobs & lower taxes attracted most interstate migrants to Queensland in the past. Those attracted mainly because of Queensland’s weather were often the underemployed or unemployed. Yet, increasingly these days, it would appear that even the down & out prefer to live somewhere else. Well, every cloud does have a sliver lining!
So Queensland’s population growth – my recalcitrant correspondents – maybe isn’t doing what you think it is. Fewer people are migrating to Queensland from interstate than ever before. In contrast, population growth is increasing in NSW & Victoria.
Now, we do expect more to move north from Sydney & Melbourne as their housing markets peak. But this ‘priced-out of home’ movement northwards looks like it has lost a lot of its previous oomph. It needs to coincide with full-time job growth.
Queensland’s declining market share of interstate migration – as the third chart clearly shows – has been a long trend. Something is amiss; a past connection broken. Maybe it cannot be fixed.
In short, it looks like there is no major population influx coming to float Queensland’s real estate boat.