Should I invest in South East Queensland real-estate and if so where?

The #Sydney #housingmarket is starting to slow following more than five years of strong increases in dwelling values.  As the Sydney market slows there could be some upside for other housing markets where capital gains have been more sustainable and rental yields are higher.  

Australia’s third-largest city, Brisbane, has recently garnered more attention as a candidate for improved housing market conditions. 

Queensland has historically been a popular migration destination for people choosing to leave New South Wales. Migration from New South Wales to Queensland peaked again in December 2002 at 18,129 persons and then averaged 15,392 persons per quarter from December 2002 to September 2004.  

As migration from New South Wales to Queensland has recently picked-up, so far it has peaked at a much lower 13,487 persons over the December 2016 quarter which is only 9.0% above the long-term average. By comparison, the 1989 peak saw migration to Queensland peak at 47.5% above the long-run average and the 2002 peak saw migration peak at 46.5% above the long-run average. Unless those people migrating from New South Wales to Queensland are retirees, employment opportunities must be a key consideration.  

Post the 1987 boom in Sydney, New South Wales employment growth was slowing while it accelerated in Queensland.  Similarly in the early 2000’s employment growth had been greater in New South Wales than in Queensland however, by June 2001 Queensland’s employment was growing at a faster annual rate than New South Wales’ with Queensland employment growth consistently stronger than New South Wales all the way until January 2008.  

Over this period, dwelling value growth in Brisbane had consistently been stronger than growth in Sydney.  Looking more recently, New South Wales has consistently recorded stronger annual employment growth than Queensland between September 2014 and March 2017.  Since April 2017, annual employment growth in Queensland has been greater than in New South Wales.

One other consideration is whether the same magnitude of people leaving New South Wales for Queensland will actually settle in Brisbane. Both the Gold and Sunshine Coasts are much bigger cities in their own right than they were in 1989 and 2002 plus connectivity with Brisbane is much better than it was previously, so perhaps these migrants will be more inclined to settle on one of the Coasts rather than Brisbane.  

Over the 12 months from September 2017, Brisbane dwelling values have increased by 2.9% while values on the Gold Coast are 5.4% higher over the year and Sunshine Coast values are 6.6%. 

Source: Corelogic



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