South East Queensland Market
The fundamentals of the South East Queensland residential property market are strong:
Australia
Population Growth
Queensland is attracting strong population growth and increased by 115,200 people from 2008 to 2009 to reach a population of 4.45 million. This represents an increase of around 2,215 people per week and an annual growth rate of 2.1%. This is a significant change from 10 years ago when the population was growing by 66,000 per annum. Net Overseas Migration (66%) accounted for the largest share of population growth, followed by Natural Increase (34%). In the year ending 30 September 2009, net overseas migration to Queensland was 58,103 persons, slightly less than the record level recorded during the 2008 calendar year. Strong growth is expected to continue in the state with projections showing a population of 6.3 million in 25 years, and 8 million in 50 years (medium series).
South East Queensland (SEQ) is Australia's fastest growing region. SEQ accounts for the majority of Queensland’s growth with an average annual change of 68,536 people (2001 to 2007). Over the next 25 years SEQ will capture 70% (currently 66%) of the State’s growth increasing from 2.8 million in 2007 to 4.2 million in 2031 - approximately the same size as Queensland’s current level. The region’s growth will generate demand for 735,500 new dwellings, as well as supporting infrastructure and services.
Source: Australian Bureau of Statistics, Queensland Government Department of Infrastructure and Planning
Tight Rental Market / Low Vacancy Rates
In March quarter 2010, the vacancy rate for residential rental detached houses was 3.3%. In comparison with the previous quarter, there was no change in the vacancy rate for residential rental detached housing within Queensland. Slightly more managers of residential rental accommodation in Queensland believed that the demand for residential rental accommodation in their area had increased over the past 12 months. In addition, rental growth is likely to accelerate during 2010 as a result of housing affordability pressures fuelling an increased demand for rental housing, as well as continued strong population growth creating further demand for residential rental accommodation.
Source: Queensland Government Office of Economic and Statistical Research, BIS Shrapnel
Deficiency of Housing Stock
The gap between supply and demand for new dwellings in Queensland still remains significant. Dwelling starts for new private sector residential dwellings in Queensland have risen for the third straight quarter, lifting by 5.6 per cent or 28,780 dwellings in March quarter 2010. Construction of new dwellings is expected to increase to 36,850 dwellings in 2010/11, still well below underlying demand for an average of 40,600 homes a year. The forecast indicates a dwelling stock deficiency of 42,700 homes in 2010/11.
Source: Australian Bureau of Statistics, Office of Economic and Statistical Research
Annual Employment Growth
In line with some recovery in housing construction, further growth in public final demand and solid engineering construction in Queensland, trend employment growth in Queensland has been above the long-run average in each of the five months ending April 2010, rising by 34,800 persons over the period. These strong employment outcomes helped drive Queensland’s trend unemployment rate 0.5 percentage points lower since October 2009 to 5.5%, only slightly above the national average of 5.3%.
Furthermore, Queensland led the job gains across all states in May 2010 (up 16,000) followed by Victoria (up 12,800), Western Australia (up 12,400), and South Australia (up 6,300). In April, employment in Queensland rose 0.3% or 6,500 persons, to be 1.7% (38,100 persons) higher over the year.
Infrastructure Improvements
As part of the South East Queensland Infrastructure Plan and Program, the State Government is investing more than $107 billion over the next 18 years in road networks, extended rail links, freight and public transport, water resources, energy networks, information and communication technology, industry development, social and other community infrastructure.
The major infrastructure projects which are currently mooted, under construction or completed within south east Queensland include:
- Cross River Rail - Proposed new north-south rail line in Brisbane’s inner city
- North South Bypass Tunnel (Clem 7 now open) - The M7 Clem Jones Tunnel (CLEM7), known during its development as the North-South Bypass Tunnel (NSBT), is a AUD$3.2 billion toll road built under the Brisbane River, which crosses between the suburbs of Woolloongabba and Bowen Hills in Brisbane, Australia.
- Airport Link - 6.7km toll road, mainly underground, connecting the Clem 7 Tunnel, Inner City Bypass and local road network at Bowen Hills, to the northern arterials of Gympie Road and Stafford Road at Kedron, Sandgate Road and the East West Arterial leading to the airport.
- Northern Link - a mainly underground toll road proposed to connect the Western Freeway, at Toowong, to the Inner City Bypass (ICB), at Herston.
- Eastern Busway Corridor - The 18 km Eastern Busway will connect the Buranda Busway Station on the South-East Busway to Capalaba via the Old Cleveland Road corridor including Stones Corner, Coorparoo, Camp Hill, Carina, Carindale Bus Station and Chandler (at the Park'n'Ride facility located in the grounds of the Sleeman Sports Complex).The first section of the Eastern Busway is already open with buses running directly from the South East Busway to the University of Queensland.
- Northern Busway Corridor - The Northern Busway: Kedron to Bracken Ridge forms part of Brisbane’s broader Busway network that will eventually span the city and give commuters a congestion-free run on fast, frequent and reliable services.
- Multiple Cross River Linkages
- Gateway Duplication (Complete)
- Queensland Rail Network Upgrades
Source: Queensland Government Department of Infrastructure and Planning
To discuss your investment options
with us further...
Please Contact
Sean Porlier
INVESTMENT MANAGER
p: 07 3245 0600
m: 0413 387 793
sean.porlier@ausbuild.com.au