By mid-next year Queensland’s population will pass the 5 million milestones, with annual growth recovering to the point where we are adding the equivalent of a city the size of Rockhampton
every year.
Economists now expect annual population growth to tip 1.75 percent, a healthy notch above the 1.5 percent forecast in the last Budget, and up from the (annualised) 1.6 percent recorded in the March quarter. At these levels, we are looking at adding a total of about 86,000 people annually.
Natural increase and overseas migration are still the two big contributors, but in the past year, net interstate migration has recovered to levels not seen since the first stage of the mining boom (prior to the Global Financial Crisis).
The latest Queensland Treasury data puts it at close to 16,000 net interstate migrants annually, with most of these deciding to call the southeast of the state home. Indeed, the Oxenford-Ormeau region on the Gold Coast recorded the highest net migration levels in the country in 2015-16, according to the Australian Bureau of Statistics.
While some of this is attributable to Queensland’s economy (with some notable regional exceptions) recovering solidly since the post-mining investment boom-slump, another factor is coming into play.
That is the stark divide between Sydney and Brisbane when it comes to housing affordability. Net interstate migration to Queensland from NSW has tripled to about 3000 people a quarter in the past three years, with some of this due to the ripple effect of a Sydney median house price of more than $1 million, or about twice that of Brisbane.
Economist Gene Tunny says there is no doubt “some Sydneysiders have decided to take advantage of the larger house price differential between Sydney and Brisbane (or the Gold Coast or elsewhere), selling their houses in Sydney and moving up here to buy a comparable or superior property, and still having money left over”.
This migration surge is one of the key factors that should help smooth the transition to the Queensland economy in the wake of the extraordinary boom-bust cycle we saw with resource-related development.
The population growth is nowhere near the 120,000 annual increase experienced at the tail end of the mining boom in 2008, but still enough to provide solid support for economic drivers such as construction and retail.
Unlike that migration spike, where regional Queensland centers (many now suffering a post-boom hangover) saw a sharp rise in population, the current wave of émigrés is flocking to the southeast.
According to the ABS, in 2015-16 Brisbane had the highest internal net migration of all capital cities, at the same time as being the destination of choice for more than 42,000 people coming from elsewhere in Queensland.
At least anecdotally, the move north is being led by an older demographic; late-era Baby Boomers and Generation X-ers who bought into the Sydney property market at more sane levels 20 or 30 years ago and are now cashing in often windfall capital gains that will help underwrite retirement (or semi-retirement) in a lower cost destination like southeast Queensland.
These are people like friends of mine (let’s call them Deborah and Alan) who bought a house in Sydney’s inner west in the late ’80s for a bit over $200,000 (a big loan at a time of double-digit mortgage rates), and sold up — debt free — last year for more than $2 million, and bought a place on the Coast for about a third of that.
The challenge to this is balancing the economic boost with the demands for new infrastructure and services that the adding the equivalent of a small city each year brings with it.
While some might view this as a cost, it is ultimately a net benefit that provides infrastructure, jobs, and growth, and is underwritten by the contribution of our new Queenslanders.
For Brisbane property investors weighing up a potential glut of unit supply, it is something that could help put a floor under otherwise weak property prices.
Originally Published: www.couriermail.com.au