Is migration data hiding a shortfall in greenfield land?
The migration story continues to be good news for Queensland with a rapid acceleration in the numbers throughout the December Quarter. This jump coincides with the end of school year, business restructures and the obvious elephant in the room, the opening up of State borders.
What is of interest is that the September Quarter saw Greater Brisbane lose market share in terms of migration patterns, though it bounced back strongly in the final Quarter of 2020 equalling that of December 2019, not exactly a stellar year for residential property. Conversely, the rest of Queensland has continued to gain momentum, more than doubling in size when comparing the Quarter on Quarter data.
The trend that no one is talking about though is the potential reversion of the 15 to 24 year old cohort that has typically left regional areas looking for opportunities, is now starting to do so again. So what could this mean? Potentially many things, though in all likelihood, the reasons that were relevant twelve months ago, are probably still just as relevant today. That is, there is often greater opportunity elsewhere, particularly Greater Brisbane when it comes to employment, entertainment and education. The three E’s really haven’t changed as pull factors, in fact they may have got even stronger with some individuals forced to delay their move by twelve months.
What this may inadvertently do though is start to take some pressure off the rental markets in other locations, particularly Goldilocks coastal areas assuming that Greater Brisbane becomes the beneficiary. Greater Brisbane representing the Local Government Areas from Moreton Bay to the North, Ipswich to the West and Logan/Beaudesert (part Scenic Rim) to the south with everything else in between. In regions such as the Sunshine Coast, where rental affordability is being stretched and residential prices are escalating rapidly to the point where some agents and developers have a list price of “make an offer”, some outmigration would potentially help take a little pressure off.
What is not known though is whether this outmigration from some regions for the 15 to 24 year olds is being driven by opportunity elsewhere; or forced upon the individuals through pricing mechanisms that exclude the cohort. That is, the price of rental accommodation has forced them to look elsewhere, particularly if welfare is the primary source of income. Yet realistically, this is the cohort that has made the most impact and change for Greater Brisbane when compared with all of the other age groups. Cities equate to opportunity in most instances.
So whilst the debate will continue around whether CBD’s are viable, on this data alone one would have to ask whether the CBD and its surrounding suburbs have lost their vitality too, given the generally on par performance in a like for like timeframe. That binary argument of one or other (city or suburbs), may well be shaping up to be both, and may just have something to do with how expensive living in a city can be, particularly if you’re contemplating buying property. However if there is a genuine lack of land supply suited to detached housing that by default continues to push prices up, migration data will lead to the wrong story being told. That is; where the simple conclusion being reached is that people are moving elsewhere for lifestyle reasons. But is that what is really happening? If you don’t add more land to the greenfield supply, then those people looking for this type of accommodation will continue to have less choice, not more…and with less choice, they will be forced to go elsewhere.
Matt Gross | Director | mgross@nprco.com.au