For young families, housing affordability is becoming influential in the decision of where to set up their lives. Sydney’s strained affordability is seeing a growing portion of residents look elsewhere for housing. We often talk about the value proposition of Brisbane as a major driver for property demand. According to Domain, the current median house price in Brisbane is $566,058, this is almost $500,000 less than Sydney. It’s an unjustifiable and unsustainable gap between the two cities and it is driving the resurgence of interstate migration to Queensland.
Domain reported that of all ‘out-of-area inquiries made by Sydneysiders last year, over 50% were looking to buy in Queensland’.
Over the last two years, Queensland has added over 45,000 new residents through interstate migration alone. Over the same period, New South Wales has lost 40,000 residents to interstate migration. This is a clear indicator that the affordability and value opportunity in Brisbane is being realised. It also follows a trend that we’ve seen countless times before in the post-Sydney boom periods. Brisbane has a tendency to track Sydney often performing well shortly after Sydney peaks. Historically, Brisbane’s property growth phases have occurred in line with heightened levels of interstate migration.
Let’s take the markets last cycle peak for example. Between 2003 and 2007, Brisbane’s median house price increased 95%. This was after record levels of interstate migration. Between 2011 and 2015 Queensland’s interstate migration levels dwindled and the market remained stagnant while Sydney’s property market almost doubled.
The graph above shows how interstate migration levels have improved over the last few years. The last three years have seen a gradual rise from 15,037 in 2016, 22,510 in 2017 and over 24,000 last year. This resurgence back toward peak levels will drive strong property performance. The increase is not only benefitting Brisbane but also the Gold Coast and Sunshine Coast.
We anticipate this growth to increase underpinned by a significant infrastructure pipeline creating jobs both now and in the future.
Some of the nation’s most respected demographers have said that ‘the reasons to move are simple; cost of living, congestion and the size of Sydney’ is becoming a deterrent for some people. The majority of those making the move are currently residing in western Sydney and therefore experiencing a busy and extended commute to work. The lifestyle and convenience aspect really come into question and the affordability of south-east Queensland provides the perfect alternative. Rather than committing to a significant mortgage and years of saving, you’re able to spend half the amount and reside in one of Brisbane’s inner-ring, more affluent locations.
This rise in interstate migration is occurring at the same time as a significant reduction in property supply. Slowing supply and rising demand will place upward pressure on pricing.
To read more on this story, follow the link to Domains article.
Grow your wealth and achieve your lifestyle aspirations with property investing.
Contact us for a complimentary, no obligation meeting.