Cashed-up southerners heading to Queensland in search of property

author-avatar By on October 07, 2021
Cashed-up southerners heading to Queensland in search of property

According to a new report, Millennials and Gen Z buyers from across the border are leading Queensland's property market boom.

Domain's 'Queensland Spotlight Report' details the key factors driving the trend, with lifestyle and affordability at the top of young families' list of priorities. 

Data shows that 66% of enquiries on Domain to Queensland are coming from New South Wales. 

Dr Nicola Powell, Domain's Chief of Research & Economics, said that this internal migration shift doesn't occur often.

"What we’re finding is that people are fast-tracking their decision to move, taking the opportunity to live and work with flexibility and where they choose," Dr Powell said.

"Whilst there is no questioning that cities will always be home to the biggest population, we're witnessing a surge towards regional and less metropolitan areas which are experiencing the biggest impact of internal migration."

The Northern Rivers boom in NSW has been well documented over the pandemic, but Domain's latest report suggests the great COVID migration is now heading further north.

September's Domain House Price Report also reinforced the tree change trend that has been dominating the housing market over the past year. 

High demand areas

The top 10 areas in hot demand are all in the Gold Coast and Sunshine Coast, with Noosa taking the top spot for the most in-demand area.

James Ruprai, a Sunshine Coast Council executive, said that the coastline and laid back lifestyle are key factors influencing the trend. 

"We know Queenslanders love the coast and we’re seeing this shine through with beachside regions topping the charts of most sought after areas," Mr Ruprai said.

"More populated areas in Queensland have always been in demand, however, a population shift is seen as a result of the pandemic, driving a social and lifestyle movement as more city dwellers relocate into regional parts."

QLD.png

Source: Domain

Who is driving the demand?

Owner occupier loans increased 112% from May 2020 to January 2021 according to the report.

In recent months this has begun to drop but still remains close to record highs. 

Investor home loan values hit there highest point since 2007 and overtook first home buyers in March 2021. 

First home buyers saw an initial surge through 2020, but have been on the decline in 2021, as they are outpaced by investors. 

Dr Powell explained why investment in the state has boomed recently. 

"Queensland's offer of relative affordability compared to other major capital cities, the lure of lifestyle and more recently Queensland winning the 2032 Olympic bid all provide key selling factors for increased investment within the state," she said.

Queensland value of home loans by buyer type

QLD graph.png

Source: Domain

Buyers prioritising lifestyle and land

While Brisbane, Gold Coast and Sunshine Coast property markets are all unique, there are a few things they have in common and that is to do with what Queenslanders are looking for in a home: size, property type, property features and location.

Sunshine Coast houses boast the biggest block size at 716sqm.

In Brisbane, the median size of 619sqm for a home in a capital city is still generous compared to other states. 

Most purchased property type

Brisbane Gold Coast Sunshine Coast
House  69% 45% 61%
Townhouse 4% 6% 5%
Unit 27% 49% 34%

Property Prices

CoreLogic's Home Value Index rose another 1.5% in September, taking Australia's housing values 20.3% higher over the past 12 months.  

But despite soaring prices Queensland properties remain cheap in comparison to Australia’s major capital cities, Sydney and Melbourne.

Queensland Prices

  Regional Brisbane Gold Coast Sunshine Coast
Median House price $417,000 $678,236 $792,000 $825,000
Price Increase over 1 year 6.9% 13% 18.2% 23.1%
Median Unit price $343,000 $394,287 $500,000 $560,000
Price change over the year -8% 2.1% 9.9% 14.3%

Source: Domain

One key factor identified in the report is that 54% of suburbs have a median house price below the crucial $550,000 First Home Concession threshold, and 83% for units.

First home buyers are more likely to get a foot in the door in Brisbane, with 39% of suburbs having a median house price below $550,000, 15% in the Sunshine Coast and 12% in the Gold Coast.

See Also: How Brisbane became Australia's property darling

What's next for Queensland

Queensland is set to experience a "once in a generation" infrastructure boom in the lead up to the 2032 Olympics.

As a result, infrastructure across Gold Coast, Brisbane and Sunshine Coast will vastly improve and there will be a clear roadmap and timeline for the housing infrastructure to be implemented over the next decade, according to Domain's report.

This will also provide assurance to buyers and business owners that proposed developments will stick to schedule.

Big infrastructure projects leave a legacy behind helping to lift the population and benefit the local community in the long term.

"An influx of capital and subsequent job creation, which is expected to be the equivalent of 91,000 full-time jobs in Queensland, in the lead up to the games will be an economic force for South East Queensland," Dr Powell said.

"As a part of this cash injection we will naturally witness significant demand for housing, especially as we prepare to welcome skilled workers to the state.

"What we can forecast is an increased demand for rental properties to host short-mid term workers, which naturally presents opportunities for investors to capitalise on the strong rental demand."


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Rates correct as of October 27, 2021. View disclaimer.



Image by Luisa Denu via Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Aaron joined Savings.com.au in 2021. He is a finance journalist with a keen interest in property, the share market, and improving financial literacy in young Australians.

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