Fresh opportunities emerge
With experts predicting a slowdown in the Melbourne and Sydney residential markets, canny buyers and investors will soon be looking to Queensland’s property scene
AN INCREASING number of commentators are predicting the Sydney and Melbourne residential property markets are about to run out of steam, leaving buyers looking for alternatives.
Some investors have not only been priced out of these markets already, but are quickly looking to other areas with better prospects for continued capital growth.
Lending finance figures from the Australian Bureau of Statistics for November 2014 indicate investors across the country are beginning to pause for breath. All states, bar NSW – which saw numbers remain relatively unchanged – recorded a drop in estimated investor numbers.
The greatest fall was in the Northern Territory, which was down 29.5 per cent, followed by Western Australia (down 13.7 per cent) and Tasmania and the ACT (both down 12.5 per cent). In Queensland, estimated investor numbers were down 11.2 per cent, while in Melbourne, dwellings bought for investment purposes were down 11.8 per cent.
Nationwide, the share of the residential property market held by investors remained unchanged at 38.3 per cent during November.
Although down from a peak of 39.8 per cent in June last year, the proportion of dwellings financed for investment purposes is up from the 36.4 per cent recorded during November 2013.
November is typically a quieter time of year across all buyer types, so these results are in line with historical trends.
Investor activity looks to be plateauing in the likes of Sydney, so we will wait and see where active investors will look to buy in 2015.
With the heat coming out of the Sydney and Melbourne markets, Brisbane and other parts of Queensland are most likely set to benefit, as investors turn to the Sunshine State for capital growth opportunities.
And it’s not only investors who are likely to come in search of opportunities in Queensland.
Home buyers from interstate are also on the lookout for more affordable options, which is likely to mean an increase in Queensland’s net migration.
This, in turn, will add to the already improving property markets across the state, as buyer demand further outstrips listing numbers.
Interstate migration in Queensland currently accounts for just 11 per cent of the state’s population growth, with less than 150 net residents from interstate a week.
These levels are a long way down from 10 years ago, when net interstate migration was the largest contributor to Queensland’s population growth. Back then, interstate migration accounted for about 40 per cent of Queensland’s overall migration, with about 600 new residents a week entering the state.
And an increasing population is most welcome, particularly at a time when investors are already quite active here in Queensland.
This is resulting in the increased rental supply being absorbed as more people call Queensland home.