Queensland Benefitting from New South Wales Stagnation

The relationship between Sydney and Brisbane’s property markets can best be described as countercyclical. Generally, when one of the markets are experiencing a period of correction, the other takes place as a major benefactor. This effect can be tracked throughout market cycles reaching back to the 1980’s, when property investment was relatively unheard of. Since 2012, Sydney has been the clear winner of the race with a well-documented period of prolonged market performance.

Sydney’s growth phase can be attributed to robust and sustained population growth rates, coupled with a healthy economy. These factors created a demand heavy environment, driving price growth between 2011-2018. However, Sydney’s period of prosperity has now come to an end, after what was a seemingly endless growth phase.

The Queensland market on the other hand is showing increasingly positive signs. One of the most notable changes to the market has been the resurgence of Net Interstate Migration rates. Net Interstate Migration measures the yearly increase or decrease of residents moving from interstate locations. Over the last 24 months, QLD (indicated in orange) has experienced strong population growth, in a performance that contrasts the NSW market (indicated in blue). Residents are becoming increasingly attracted to the Sunshine state, since Sydney’s powerhouse market has run its due course.

Queensland’s migration rates have now risen to a level that is reminiscent of the early 2000’s boom cycle, marking exciting times for those invested in the market. As Sydney’s stagnation continues and sentiment remains low, the Queensland’s capital is expected to benefit from the new residents flowing in from the south.

With rental supply continuing to fall, bolstered population growth will be an important factor in the market’s resurgence. Brisbane continues its transition from a major economic hub into Australia’s next world city. It is Blue Wealth’s aim to provide our clients the opportunity to leverage off this market evolution.

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