_Population Growth in QLD and the maturation of the Inner Brisbane prestige residential market
Population Growth
Total population growth for Queensland (Qld) in the year to September 2017 was 81,270 persons, the highest level in five years (ABS). This represented population growth of 1.7% over the year, just ahead of the national figure at 1.6%.
The slight reduction in the rate of natural increase (30,573) was more than outweighed by higher net overseas migration (31,374) and strong net interstate migration (19,324), as can be seen in Figure 1.
While only accounting for 24% of the Qld population growth, net interstate migration is an important indicator of both sentiment and economic growth for Qld.
Net Interstate Migration
The level of net interstate migration into Qld has been accelerating since the second half of 2016. The September 2017 quarter recorded the highest net interstate migration into Qld since December 2007, at a net gain of 5,300 persons.
On an annual basis, year to September 2017 net interstate migration for Qld was 19,324 persons, the highest since 2007 and the highest of all of the Australian states (Figure 2).
Victoria was second with a net gain of 16,926 persons and this is the first time in four years that Qld net migration was higher than Victoria. The quarterly net interstate migration for Victoria has been moderating over the past two quarters, while Qld has continued to improve, although overseas migration into Victoria remains strong.
The major drivers of net interstate migration to Qld are the discrepancy in house prices compared to the two main southern states, along with job opportunity and economic growth. While house price discrepancy has been in place for some time, underlying economic confidence is now flowing through, accelerating relocations.
Recent economic data has backed up anecdotal evidence of improving conditions. State Final Demand (SFD), which measures consumption, was up by 2.6% in the year to December 2017, increasing 0.9% in the December quarter.
Components of Population Growth for Brisbane
The ABS has recently released updated data which, for the first time, details the breakup of the source of population growth down to small areas.
The data, which covers 2016-17, shows that Greater Brisbane’s population grew by 2.0% in this time. This was dominated by migration inflows with net overseas migration of 17,998 and net internal migration of 12,023 combining to outweigh natural increase at 17,961 persons.
The highest population growth rate within Greater Brisbane was recorded within Inner Brisbane as the impact of medium and higher density development continues to flow through. The Inner City population increased by 3.02% in the past year, 77% of that came directly from migration.
As shown in Figure 3, the population growth profiles of the Queensland, Greater Brisbane and Inner Brisbane regions differ significantly.
The population growth of Inner Brisbane, and the relatively sophisticated source of the majority of resident inflows has been a factor in taking the Brisbane market to 19th position on the Knight Frank Prime Global Cities Index.
The Brisbane prestige residential market is benefiting from not only an ageing population seeking low maintenance amenity in lifestyle locations but also from families and couples looking for prestige living, which is well-priced when compared to other East Coast Cities.
While mainstream high-density-investor product does have substantial recent levels of construction to digest, the prestige residential market is outperforming.