Part One: General Migration Trends
Queensland Seeing Lower Overall Migration Numbers
Overall, Migration to Queensland has decreased over the past ten years. Total arrivals to Queensland followed an upward trend during the lead up to the GFC. Since then, total arrivals to Queensland have been on the decline. Net interstate migration in Australia is currently being led by Victoria and not Queensland, showing that it is perhaps jobs and not lifestyle or weather that is the biggest driver of migration.
Increase in the Number of Foreign Arrivals
Migration is made up of two components, overseas and domestic arrivals. Queensland’s is currently seeing a higher proportion of international arrivals to domestic arrivals than it did ten years ago. Currently, 83% of total arrivals to Queensland come from overseas. This was just 31% ten years ago.
Part 2: International Migration
On the rise, driven by workers & students
The largest contribution to Net Overseas Migration (NOM) in Australia over the last few years has not been permanent migrants but people on long-term temporary visas – international students and skilled workers. The number of international students coming to Australia has increased rapidly at around 9% per annum between 2000 and 2009, making Australia the third most popular country in the wold for international students and creating an extremely profitable export industry in the process. Those on 457 (temporary work) Visas increased by 12% per annum over the same period, driven by employer demand. Australia cannot get the number of workers it needs to fuel our economy locally, so we look overseas.
Queensland NOM Facts
Net Overseas Migration or NOM is the second highest contributor to Queensland population growth behind natural increase, attributing for 41.6% of the total increase over the most recent 12 month period ending September 2014.
In Queensland, the majority of temporary overseas migrants arrive on a student visa.
Queensland managed to attract 16.6% of total Student Visas to Australia during the year to September 2014, equating to 12,362 international students.
A further 3,654 temporary visitors to Queensland were on 457 Visas, the majority of which (59%) went to Brisbane.
What This Means for Queensland Real Estate
Currently, the majority of arrivals to our state are international students or workers. These new residents are going to demand a certain type of housing. For students, they will need affordable accommodation close to their university. Currently, the two most popular universities for international students in Queensland are UQ (11,000 international students) and QUT (7,000 international students). Place Advisory has already observed a large number of Development Applications for purpose built student accommodation in areas like the CBD, Spring Hill and St Lucia.
For workers coming to Queensland, the majority (59%) come to Brisbane. These are professional workers. They demand housing that is close to their work (or at least easily accessible by public transport). They need amenity – shops, restaurants, cafes. Things that other cities have. If Brisbane is to compete on a global stage and attract international professionals, it will need to supply the type of lifestyle that is expected of a modern city. We are seeing the beginnings of this in areas such as Newstead, South Brisbane and Toowong where residents enjoy a low maintenance apartment lifestyle where they can live, work and play all in the same area.
Part 3: Interstate Migration
Just 8% of Queensland’s total population growth during the year to September 2014 was attributable to Net Interstate Migration or NIM.
Over the September 2014 quarter, Queensland experienced the highest number of interstate arrivals in Australia, registering net intake of 1,544 interstate residents. Victoria came second in this regard, taking in a net total of 1,520 interstate residents.
Using ABS statistics, the 2013 Major Cities Unit’s ‘State of Australian Cities Report’ shows that the majority of interstate arrivals move to Brisbane’s outer ring. This is followed by the middle ring and finally the inner ring. The relative affordability of housing in the outer ring attracts residents, particularly from more expensive parts of Australia such as Sydney or Melbourne where many have been priced out of the market.
Overall, domestic or interstate migration makes up a relatively small percentage of population growth in Queensland. Its affects vary greatly with job cycles. For example, from 2006 to 2011, the vast majority of interstate arrivals in Queensland were males aged 15-24 as this demographic was most attracted to the mining boom.
As this cycle of mining slows down, we may see these residents vacate the city to return to their families or in search of work elsewhere and the hangover of the property ‘boom’ that was experienced in some mining towns will begin to set in. This has already begun in places such as Mackay and Gladstone, once gracing the front cover of property investment magazines as so called ‘hot spots,’ now experiencing vacancy rates of 7% and 11% respectively. These areas may recover over the long term, however short-term fluctuations are all too common.
Part Four: Closing Thoughts
For Brisbane to recognize its next cycle of growth, employment is the key variable. Jobs attract interstate residents – we are well positioned on comparable price with our southern neighbors – our economy is the threat.