An analysis of interstate migration is showing yet another reason why Brisbane and South East Queensland is the place to be investing right now, with the gap between house prices in Sydney and Brisbane expected to start narrowing soon.
The last major price increase in the Brisbane housing market that was similar to what Sydney has just seen came in 2002 to 2004. Prior to this, the median Brisbane house price equated to just 41 per cent of the median in Sydney – a historical low. Due to this, interstate migration to Queensland surged, peaking in 2003 and this is when home prices started to rise and the gap between Sydney and Brisbane prices started to narrow.
From this, Brisbane house prices kept growing, reaching as much as 78 per cent of the Sydney median in 2008.
As you can see from the above graph researched by CBRE, the numbers show that the same process is starting to happen again. Brisbane’s median house price is now about 43 per cent of the Sydney median, bringing it almost as low as it was in 2002.
CBRE researcher Ally McDade says, “At June 2017, levels of interstate immigration reached the highest quarterly and annual growth since 2008. Over the year to June 2017, interstate migration to Queensland increased by an impressive 50 per cent, or circa 17,500 persons.”
“As more people migrate to the Sunshine State, the equity wealth built in Sydney is transferred to Brisbane,” Ms McDade said.
“This increase in demand, coupled with a higher perceived value, has historically driven Brisbane real estate prices higher.”
One of Australia’s largest developers, Stockland, are also noticing the interstate change with their analysis showing that most interstate buyers to Queensland are coming from NSW, representing about two thirds of total interstate purchases in Stockland’s south-east Queensland communities.
Victorian buyers accounted for a further 12 per cent of interstate purchases, followed by South Australia (8 per cent) and the ACT (6 per cent).
This combined with the government spending, infrastructure and future developments planned, shows that Brisbane and SEQ is the place to invest right now. While most people will wait until they see prices increase to invest in an area, those who get in early will be able to benefit from the research which is showing an increase in SEQ house prices is imminent.
Original article in the Australian Financial Review: http://www.afr.com/real-estate/does-queenslands-immigration-rise-point-to-house-price-rebound-20180116-h0jh0q
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