What happened? Where did all the people go?

Queensland (and the other states) today is still feeling the aftershock from the GFC. The drop in interstate migration has really hurt the property market in Queensland. In the year to June 2005, Queensland had 94,000 new residents of which about 30,000 where from interstate. Today Queensland adds the same number of residents however only 9,000 are from interstate and the rest are from overseas. Why does this matter? Well an interstate visitor is likely to buy a home when they move to Queensland while an overseas visitor is likely to rent. So this puts significant more impact on the rental accommodation putting rental values up but hinders the growth of the property value in the short term.

So why is there less of a market for interstate migration to Queensland today than there was a few years ago? The major influencing factor was the GFC. Today, in the Post GFC environment, it is risky to sell your house, buy another and find a new job. Those that thought about moving are staying put. It is the safer option for now.

Three to five years ago there was also a much larger gap in property prices between the major cities. This meant that those thinking about migrating to the sunshine state were encouraged as their dollar went further in the Queensland housing market. This isn’t the case anymore with Queensland property prices (Brisbane in particular) catching up with the other major cities. There has also been a lot of negative sentiment in the media about home prices falling in Queensland, especially in secondary markets such as the Gold Coast and Cairns where Baby Boomers are not buying anymore. In many cases property values have halved leaving owners in a desperate position to sell and walk away with losses amounting to hundreds of thousands of dollars in some cases.

Having said all this, I can see that a turnaround in Queensland property will occur first with the major centres such as Brisbane and Ipswich while secondary markets such as the Gold Coast, Sunshine Coast and Cairns may still remain in limbo for a few years to come.