Based on key market fundamentals, indicators and dynamics, it is widely acknowledged that Brisbane and South East Queensland (SEQ) are best positioned to lead the next residential property cycle in Australia.
This favourable outlook has recently gathered further momentum, with Australia’s largest residential data provider, CoreLogic RP Data, publishing in February 2018 that Brisbane is well placed to take over as the best performing capital city housing market over the next five years.
Mosaic Property Research Director Tim Lawless stated that there are a variety of economic and demographic factors that are likely to support improving market conditions across South East Queensland.
To provide further context, please note:
- Queensland is continuing to transition to a post-mining economy and employment prospects have turned around, predominately driven by major infrastructure projects either underway or about to kick off in Brisbane and the broader SEQ region.
- These major projects are generational pieces of infrastructure, of scale and importance that will materially change the city of Brisbane and the SEQ region, especially with regards to the stimulation of construction, employment and tourism activity.
- The majority of direct/indirect growth to ow from the delivery of this $18.2 billion major infrastructure project pipeline will be evident before the year 2022.
- Improved employment conditions are also currently evident in Queensland. An upswing recorded in December 2016 has already created 18,695 new jobs over a short five-month period; close to 670,000 new jobs are also forecast for Brisbane, Sunshine and the Gold Coast by 2020.
- Further sustained employment growth in Queensland and more particularly SEQ is anticipated to place downward pressure on the unemployment rate and subsequent upward pressure on wage growth.
- Net internal migration to Queensland, SEQ and Brisbane is the strongest it has been over the past ten years which will eventually transition into increased demand and ultimately put pressure on existing housing supply and values.
- The outlook for continued overseas migration growth to Queensland, SEQ and Brisbane is also very strong as a result of improved tourism conditions, increased international student numbers, impressive natural lifestyle appeal and major projects like Queens Wharf; especially given this project will be a large scale integrated resort development that contains significant gaming and entertainment facilities.
- SEQ, and Brisbane as the focal point, is going to be the strongest residential market in Australia over the next five years, as it is undervalued relative to its fundamental appeal when compared with the other big east coast cities.
- Sydney home owners have a strong opportunity right now to free the significant equity that likely exists in their dwellings and buy into a much more affordable, and often more appealing market like SEQ.
- An example used in the Financial Review recently to exemplify the situation described how a Western Sydney home owner could sell their house on which they have a $200,000 mortgage for $800,000, buy a property in SEQ for $400,000, buy a Jim’s Mowing franchise for $80,000 and still have $100,000 in the bank. This scenario further reiterates the appeal for Sydney buyers to move to SEQ, as the affordability proposition coupled with improved quality of life magnifies.
- With the significant median house price gap that now exists with Sydney housing, currently circa $585,000 more expensive, moving forward, it is likely that this gap will reduce quickly as the SEQ and Brisbane market moves through the next growth phase of its property cycle.
- Wise investors are already aware that quality, residential property located in Brisbane and SEQ can currently deliver higher yields, contain lower entry prices and are positioned at the earlier stage of the growth cycle, so ultimately have greater potential for future upside.
These combined market fundamentals, indicators and dynamics clearly demonstrate why Brisbane and SEQ are widely anticipated to be the best performing Australian residential property market over the coming five-year period.