By John McGrath
In our recently released McGrath Report 2018, we discuss how the affordability of South East Queensland is attracting record levels of interstate migration as well as rising interest from investors and first home buyers, with its housing market continuing to produce solid results, despite a sluggish economy.
According to CoreLogic statistics, Brisbane’s median house price increased by 3.0% to $520,000 in the 12 months to June 2017. However, the apartment market posted a loss, with its median price falling 2.4% to $410,000, which is largely a reflection of the inner city oversupply.
Housing affordability compared to Sydney and Melbourne continues to be Brisbane's calling card for home owners, investors and first home buyers alike. A significant price gap between the cities will underpin rising demand over the next few years.
Queensland currently has the strongest first home buyer market in the nation, with loans to first time buyers surging to 20% of all owner occupier loans in June – the highest proportion since 2009, according to Domain.
In July 2017, the $20,000 First Home Owner Grant Boost was extended to December 2017 for the purchase of new homes up to a value of $750,000, with about 4,900 applications received for the grant so far, according to the State Government.
Our agents are reporting far more interest from Sydney and Melbourne investors this year. Brisbane's prospects for capital growth, plus superior rental yields of 4.1% for houses and 4.9% for apartments, continues to make it an attractive option for investors.
Owner occupiers are also increasingly realising the appeal of South East Queensland, which has become a major hot spot for internal migration, according to the Australian Bureau of Statistics (ABS).
Queensland welcomed 11,581 new interstate residents in the year ending June 2016 – a marked increase on 6,417 the year before. In addition, Brisbane recorded its highest internal migration in at least a decade.
Among regional centres, the Gold Coast and the Sunshine Coast led the country with 6,428 and 6,200 new residents respectively. The Gold Coast’s growth was the highest internal migration ever recorded by the ABS since they began this data series in FY07. Compared with FY15, the Gold Coast’s internal migration was up an astounding 39%.
We see a once in a lifetime opportunity for young families to transform their lives with a move to South East Queensland. The massive new equity that home owners in Sydney and Melbourne have gained could buy them an amazing new lifestyle and far less mortgage stress.
On the Gold Coast, excitement over the 2018 Commonwealth Games (GC2018) is growing. GC2018 will inject billions of dollars into the economy, with 6,600 athletes and officials and 100,000 visitors attending the event and a global TV audience of more than 1.5 billion expected to watch it.
Three new competition venues and significant upgrades to several other facilities will provide important long term benefits. New venues include the Gold Coast Sports and Leisure Centre, which will boost the economy long term by attracting professional training camps and major events.
Construction of sporting facilities as well as the extension of the light rail have boosted the local economy and property prices are responding and increasing at a healthier rate than Brisbane.
According to CoreLogic, the median house price increased 7.3% to $620,000 in the 12 months to June 2017. The apartment market was significantly stronger than Brisbane's, with a median price rise of 5.1% to $415,000.
On the Sunshine Coast, major new infrastructure projects are also driving the property market. Among them is the redevelopment of Maroochydore city centre; the expansion of the Sunshine Coast Airport; and a new business, technology and retail precinct adjacent to the University of the Sunshine Coast.
According to CoreLogic, the Sunshine Coast median house price increased 5.1% to $552,000 in the 12 months to June 2017, while its median apartment price increased 3.4% to $390,000.
South East Queensland remains the most compelling market in the country for both investors and young families. As the region’s value gap with Sydney and Melbourne widens, it is well positioned to take up redirected demand from the more expensive capital city markets.
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