Australia is an immigration nation, so much of our history, strength and wealth is built on immigration. So much of the property prices is impacted by immigration as well. Migration benefits Australia in many ways, it rises the wealth of the nation, increases innovation, tends to impact our competitiveness in a positive way, reduces the negative impact of aging population. Today we will look at the immigration, the leading states, trends and impact on property prices.
Which states lead in immigration number?
In absolute numbers there is no doubt that NSW is leading the nation in the number of people that chose to call NSW their new home. However, we will look at a different set of numbers. We will look at how the state growth in immigration is trending.
Graph showing Quarter on quarter change in immigration intake for NSW, QLD and VIC. With clear trend of VIC leading in QoQ growth, but Queensland is leading in overall growth trend. VIC is overtook NSW as the choice destination. Queensland in turn is overtaking NSW and heading very close to VIC.
Victoria is set to become Australia’s most populous state, Queensland is trending higher than both NSW and VIC and is set to post second largest growth rates after Victoria.
What does this mean?
Look at this example. Assume, for ease of calculation 300 people immigrate to Australia in 2017 and 150 chose to immigrate to NSW, 100 to VIC and 50 to QLD. Now, assume 400 immigrated today, 200 chose to immigrate to NSW, 150 to VIC and 80 to QLD. In absolute numbers it is easy to say that NSW is growing at explosive rate. But in fact, QLD is growing at a much faster rate than NSW.
Why? Because the growth in NSW in our example is 200/150=33%, while QLD is 80/50=60%
How immigration affects property market?
It is no secret that immigration has an impact on economic growth and it has an impact on property market growth. Since September 2012, the population growth was led by Victoria, followed by Queensland and follows by NSW (see here for details).Queensland on top of that has the highest interstate immigration out of all states.
If we revisit the chart above we can see that Queensland population growth is trending the highest among the three larger states. When people immigrate, it is not surprising that house prices in Queensland are expected to increase. This is especially true for areas that tend to attract a lot of people, which have amenities, lifestyle options and jobs.
It also remains true that immigration is not the only factor that impacts property prices. It is one factor of many. But it is a factor that we watch closely when we analyse property markets. Even when we look from simple supply – demand perspective. The higher the immigration the higher the demand for properties.
While Brisbane, unlike Sydney and Melbourne, has the option to sprawl and is not geographically as restricted as the other two capitals. We believe supply and demand is posed to play a role in Queensland as well. While Brisbane doesn’t have the mountains and the harbour, it has flood plains. It also has the sea from fairly close distance.
We are seeing an interesting trend that unveiled itself in 2012. Victoria has become the powerhouse of economic and population growth in Australia. We are expecting a lot from this state. We are also very interested in Queensland and the significant increase in the trend of growth. If the trend continues we can expect to see Queensland becoming the second fastest growing state. Time will tell. For now QLD and VIC are our property markets to watch.