Internal migration driving the property boom
Australia’s population is booming, but it isn’t property markets in our capital cities that are benefitting the most, according to property market research firm Propertyology.
New Propertyology research has found that population growth due to internal migration has a bigger impact on property markets than new migrants from overseas.
Propertyology head of research Simon Pressley said intrastate and interstate migrants – existing Australians who elect to move from one city to another – were likely to strengthen property prices in the cities they moved to far more than the flocks of overseas migrants looking to start a new life in Sydney and Melbourne.
“Both of Australia’s two largest cities are currently in the middle of their biggest property market downturns since the late 1980s – this is occurring at a time when both cities produced two consecutive years of all-time record high population growth.
“Yes, we all need to live somewhere, but there’s no law that says one has to buy the roof over their head.
“In fact, the vast majority of overseas migrants don’t buy for several years, if at all – they rent. This is especially the case in Australia’s most expensive city.”
Propertyology analysis of Australian Bureau of Statistics (ABS) data has identified the locations where populations are benefitting most from intra and interstate migration.
Mr Pressley said thorough analysis of the data confirms that the locations of choice for Australian residents are satellite cities, or tier-2 cities on the outer-fringe of capital cities, and major regional cities, which are classed as tier-3 cities that play the role as a ‘capital city’ for larger regions.
He said that Queensland, Hobart and parts of regional Victoria and New South Wales were the big winners.
“Number one on Australia’s popularity winners’ list is the Gold Coast,” he said.
“With a median house price that’s only 60 per cent the cost of Sydney, the Gold Coast attracted 7,441 new residents from other parts of Australia last year.”
In Victoria, people are being drawn to Bendigo, Ballarat, Geelong, Baw Baw, Mitchell, Wodonga and Wangaratta.
“Within Melbourne, once again housing affordability is a common denominator in the likes of Casey, Melton, Hume and Cardinia.
Interestingly, their respective property markets also performed significantly better than Greater-Melbourne’s 10 per cent decline in 2018,” he said.
Melbourne had a small net gain from internal migration, however, the official data says that 21 out of 27 Melbourne city councils produced a net population loss from internal migration.
Mr Pressley said one of the most obvious trends in the analysis was the migration of so many people away from capital cities to regional areas.
“Last year, the 6,370 Australians who relocated to the Sunshine Coast was more than the 4,266 Australians who relocated to Melbourne,” he said.
“Likewise, for the 5,559 people who left Adelaide during the year ending June 2018, a similar combined volume of people moved to Geelong and Port Macquarie.
“The combined sum of people who decided to move town and chose Fraser Coast (1,376 people), Maitland (1,189), Bendigo (980), Ballarat (883), Tweed (829), Scenic Rim (637) and Dubbo (375) is comparable to the 6,659 people who packed their bags and left Australia’s fourth largest city, Perth.”