Will interstate immigration impact Queensland property values?

Another property buzz word this year will also be interstate migration.   

The Queensland population growth figures (latest available) for fiscal 2017 are:

• Natural increase: 31,006
• Interstate migration: 17,148
• Overseas migration: 31,148
• Total growth: 79,580

Yes interstate migration to Qld is on the increase.

It was 11,581 during fiscal 2016 and just 6,417 during fiscal 2015.

Total population growth in Qld is also increasing…

It was just 64,510 during 2016 and 59,950 in 2015.

More will move north as Sydney’s housing market cools and capital flies north, but how strong this movement depends on jobs.

And what’s its impact so far on dwelling values?

Below are the annualised dwelling price growth figures for the year ending January 2018 (based on CoreLogic data). 

• Sydney: 2.1%
• Melbourne: 8.0%
• Brisbane: 2.1%
• Adelaide: 2.4%
• Perth: -2.6%
• Hobart: 12.4%
• Darwin: -6.4%Canberra: 4.5%

You might recall that Brisbane’s annual dwelling values rose 3.6% during calendar 2016 and Sydney’s dwelling values rose by some 14% over the same time period.

For mine what happened in Sydney and Melbourne re: dwelling price growth was a once off.

Heavy overseas buying, population Ponzi, FOMO and this is particularly the case when you compare dwelling price growth against annual changes in wages.

Annual wage growth by state (ABS wage price index, as at September Qtr. 2017) is outlined below:

• New South Wales: 2.1%
• Victoria: 2.2%
• Queensland: 2.2%
• South Australia: 2.0%
• Western Australia: 1.3%
• Tasmania: 2.2%
• Northern Territory: 1.4%
• ACT: 1.9%

I am a firm believer that over the longer term, growth in dwelling values needs to reflect our capacity to repay.

Without a future of rising wages or further reductions in official interest rates (actual rates are rising) plus lending criteria getting tougher, it’s not possible to borrow to the same extent as yesterday.

The maths does not lie.

The equation is simple. 

High debt + Rising interest rates + Stagnating wages = Less growth

And to expect what happened recently in Sydney and Melbourne to repeat in south east Queensland is delusional.

Some price growth probably, but very muted indeed.

And for how long?