South East Queensland will be the prime beneficiary of Sydney and Melbourne’s slowdown, with the economy starting to turn a corner and the state re-claiming its place as Australia’s No 1 destination for internal migration, as more families and downsizers from the southern cities cash-in for a lifestyle in the sun.
Economic growth and jobs are closely tied to every property market’s performance and Queensland has suffered in the shadow of the mining downturn.
But as discussed in our newly released annual McGrath Report 2019, things are changing, with boosted tourism, surging gas exports and the strongest annual growth in jobs in more than a decade combining for a comeback.
Economic growth is projected to accelerate from 2.5% in FY17 to 3% by FY19, supported by the biggest infrastructure spend since the 2011 flood recovery, announced in the FY19 Budget in June.
Looking ahead, economic forecaster BIS Oxford Economics says Brisbane will lead the capitals, with 13% property price growth predicted by 2021, although more of this growth will occur in 2021.
Brisbane is one of the world’s great cities. Liveability, affordability, scale and future economic prospects all suggest that Brisbane is a market where you can confidently buy.
The value gap between the East Coast capitals is compelling – it is the largest it has ever been between Brisbane and Melbourne and the largest in 15 years with Sydney, according to CoreLogic.
A typical house in Brisbane is $437,000 cheaper than Sydney and $260,000 cheaper than Melbourne. This level of affordability, coupled with positive economic signs means Brisbane is primed for future growth.
Amongst the thousands of southern migrants relocating north, there is currently a clear preference for beachside living, with the Gold Coast and Sunshine Coast favoured over Brisbane.
These two regions have weathered the mining downturn particularly well, with significant local infrastructure spending, jobs growth and the 2018 Commonwealth Games on the Gold Coast offsetting the impact.
About 5,200 Sydneysiders and 2,500 Melburnians moved to the Gold Coast in FY17 and a further 1,500 migrated from Melbourne to the Sunshine Coast.
This has translated into better property price growth in the regions, with house prices rising 4.8% on the Gold Coast and 6.1% on the Sunshine Coast compared to 3.1% in Brisbane over the 12 months to June 2018.
The Gold Coast and Sunshine Coast are now more expensive than the state’s capital, with median house prices of $650,000 and $589,000 respectively compared to Brisbane at $536,000. The last time the Gold Coast had such a substantial premium to Brisbane was in July 2008.
This might be a sign of the future with a huge wave of downsizing due to unfold over the next two decades across Australia.
Queensland’s best sea change locations, such as the Gold Coast and Noosa have long been favourite destinations amongst downsizers looking for a more relaxed life.
While affordability is part of Queensland’s attraction, massive growth in Sydney and Melbourne property prices over a prolonged period means southern migrants can afford to buy wherever they like.
Within Brisbane, southern migrants and local upgraders are favouring premium property in blue chip inner ring areas close to the CBD and/or river.
This has led to above average growth in desirable neighbourhoods like Hamilton (median house price up 38.5% to $1.565 million), Paddington (up 15% to $1.15 million), Bulimba (up 11.3% to $1.307 million) and Auchenflower (up 9.5% to $1.095 million).
While a temporary oversupply of ordinary one and two bedroom apartments persists in Brisbane’s inner city, exacerbated by weakened investor activity, there is solid demand from downsizers for large luxury apartments in the $1 million-plus range in buzzy restaurant and entertainment precincts.
Australia’s favourite seachange destination is more appealing than ever before, with the Gold Coast amongst the top 10 destinations of all capital city migrants in FY17, attracting 19,400 people from the eight capitals, including 8,800 from Brisbane.
The opportunity to work remotely, set up a home business or take up one of thousands of new jobs is a big drawcard for the Gold Coast and Sunshine Coast, which both have airport access.
The Sunshine Coast also has strong economic credentials, with the redevelopment of Maroochydore CBD and the Sunshine Coast Airport expansion underway.
The Sunshine Coast Regional Council is planning light rail by 2025 and a Business and Technology Park adjacent to the new university.
Toowoomba, about 120km west of Brisbane, offers exceptional affordability and is benefiting from Australia’s first private airport, Wellcamp Airport, which began passenger services in 2014 and provides 80 direct flights per week.
Future growth is assured with major infrastructure projects such as the $1.6 billion Second Range Crossing and the $10 billion Brisbane to Melbourne Inland Rail Project set to advance the region.
South East Queensland provides a golden triangle of opportunity today – from the Gold Coast to the Sunshine Coast, including Brisbane and west to Toowoomba. This region offers the best short-to-medium term opportunities for capital growth, as well as the most desirable lifestyle in Australia.
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