We first started looking at interstate migration levels (between QLD and NSW) about 9 years ago because they demonstrated a very important house price relationship.
At that point in time, NSW was losing about 30,000 people (net) to QLD every year. The reasons for this exodus centred around house prices and jobs. The QLD economy was booming and housing was relatively cheap. The NSW economy was a basket case and Sydney’s house prices were almost 40% more expensive than Brisbane.
At the end of the QLD house price boom (around 2010), the gap between Sydney house prices and Brisbane house prices was only around 15%. There was no longer a compelling reason to move north for most Sydney siders.
Now we have a very interesting situation. Sydney’s median house price is again 39% higher than Brisbane. However, the unemployment rate in NSW is 6.3% vs 6.7% in QLD. The sluggish QLD economy is holding the “would be” NSW migrants at bay.
As you can see below, the NSW net interstate migration level is at its lowest for 30 years (-6,305). The pressure cooker valve is blocked and this is undoubtedly having some impact on the NSW median house price as supply is dominated by demand.
On the other hand, if the QLD economy picks up, and jobs are created, the mass NSW exodus could be on again. As you can see, QLD interstate migration is very subdued.
We are convinced that the great Australian dream of owning our own home is just as strong as ever. Those affordable QLD homes are certainly a tempting carrot. Our tip is to watch the QLD unemployment rate. If jobs are created, NSW people will fill them.
Michael Daniels, B.Com
Smartline Personal Mortgage Advisers
State Manager NSW & ACT
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