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 reclaiming its place as Australia’s number one destination for internal migration, as more families and downsizers from the southern cities cash in for a lifestyle in the sun.
Economic growth is projected to accelerate from 2.5 percent in the 2017 financial year to three percent this financial year. This is supported by the biggest infrastructure spend in Brisbane since the 2011 flood recovery, announced in the FY19 Budget.
Worth $45.8 billion over four years, the capital works program is designed to stimulate economic growth, encourage private sector investment and create tens of thousands of jobs, including 38,000 in FY19 alone, which should go a long way in raising consumer confidence and encouraging further internal migration.
Looking ahead, economic forecaster BIS Oxford Economics says Brisbane will lead the capitals with 13 percent property price growth predicted by 2021, although more of this growth will occur in 2021. Brisbane is one of the world’s great cities in terms of liveability and affordability. The future economic prospects all suggest that Brisbane is a market in which you can confidently invest.
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 median-priced 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, job 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. Strong local economies, population growth and internal migration has translated into better property price growth in the regions, with house prices rising 4.8 percent on the Gold Coast and 6.1 per cent on the Sunshine Coast. 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 seachange locations, including the Gold Coast and Sunshine Coast, 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. Brisbane’s construction cycle peaked in 2016 and absorption of new stock is now underway. There is great opportunity for first-home buyers and investors, with the city’s apartment rental yield at 4.8 percent far superior to Sydney at 3.9 percent and Melbourne at four percent.
The Gold Coast is amongst the top ten destinations of all capital city migrants in FY17, attracting 19,400 people from the eight capitals, including 8,800 from Brisbane. 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.
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.
To read the full McGrath Report 2019, head to their website.
John McGrath and McGrath Estate Agents are household names in real estate in Sydney and Melbourne and are now establishing themselves as a dominant player in the Queensland market. They are also aggressively pushing into the marketing of new and off-the-plan property, appointing industry leader Jo Prince-Gillies as the new Associate-Director for McGrath Projects. Jo Prince-Gillies is genuinely excited about the opportunity and about the Queensland market.
“We are pretty bullish on Queensland property as the fundamentals are looking good. The gap in property prices between Sydney and Melbourne and Queensland is now huge,” Jo told PropertyMash.
“High-quality projects in sought after locations are attracting strong interest from owner-occupiers looking for a lifestyle change and investors are slowly returning to the market for affordability as well as solid rental yield and low vacancy rates,” she said.
“This is creating some really interesting opportunities for us and our clients with our large networks in New South Wales and Victoria.”