The 3 Key Factors Driving Queensland Property Prices

Would you like to know what is driving this spike in Queensland Property Prices?

For nearly a decade now, commentators and experts have been taunting us Queenslanders with a multitude of “It’s Time” style headlines.

Unfortunately, it never eventuated throughout the last decade.

With many parts of Queensland experiencing rapidly rising property prices, it now appears that “time” may have finally arrived.

Overall Brisbane has seen 5.6% property price growth over the last quarter and select suburbs have done even better.

The Its Time prediction is a bit like the broken clock, it is right at least two times a day, as the time rolls around eventually.

So, it looks like those commentators have now eventually gotten it right.

But what has changed to force property prices up so rapidly.

Here are my thoughts.

1. Jobs

In my opinion, Jobs are the number one factor that is driving the Queensland property market.

The weather and lifestyle continue to be the envy of many, but people are reluctant to move if they can not find work.

But that has changed and will appear to be continually evolving.

Over the last decade we there have been some fairly significant events, the floods, hurricanes, and a mining downturn to name a few.

There was the odd tunnel being built and a few smaller projects, but nothing of the scale and magnitude to create bulk employment growth.

However, as we speak, there is around $41.3bil worth of activity in the pipeline across the state.

Most of this activity is forecast to occur in South East Queensland, lead by huge projects to the Brisbane CBD and Airport precinct, a boost to infrastructure and other projects.

This has been the missing piece of the puzzle and it has now been firmly put in place.

With more jobs on offer, the move is on.

4. Affordability

The affordability factor may have been overplayed at times, but it had to play a part eventually.

After the last round of price gains back in 2018, of which Queensland was relatively absent, it had a significantly lower medium house price than other states.

Adding to that Queenslanders will also paying considering less of their income on a mortgage.

I have often heard people joke that in some parts of Brisbane a Melbourne or Sydney buyer can by two homes here for the price of their one.

Something had to give, and people are now making the shift to a lower mortgage, an boost in disposable income and in many cases a superior lifestyle.

In the past, our southern capitals, with better opportunities and higher wages were a big drawcard for job seekers.

An extra $20,000 or $30,000 per year may not cut it any longer if people are having to fork out 86% – 92% of their salary on their mortgage repayments.

The current group of job seekers are more inclined to stay put, with more jobs on offer, even with a lower income, they end up with more disposable income and a better lifestyle.

3. COVID-19

This has been a once in a generation type event and driven huge change.

People have had a chance to reflect on where they are at and what they in life and some are choosing to make changes.

Lockdowns have also resulted in forced savings.

With people unable to spend money on travel and lifestyle, they have chosen to pay off debt and top up savings buffers.

They have had some downtime to look around and see what else is out there and Queensland appears to high on that list, as people make the move to the Sunshine State.

With jobs on offer, a comfortable financial position, and this reset type event, Australians are moving to Queensland.

In Summary

Queensland’s time in the sun may have finally arrived.

Superior suburbs have seen prices rise around 10% over the last 12 months, with economists suggesting there is more to come.

It certainly appears to be the case for Queensland.

At long last, we have enough jobs to offer to attract migration to the state in large numbers.

There is still $41.3bil in the pipeline and some huge projects to come and the shift north will continue.

Affordability is another key factor and it appears the gap between house prices and mortgage repayments is proving too much to ignore.

Looking back over each decade there is always some kind of X-Factor.

This time around it was COVID-19, but far from costing us 40% of our house price, it appears to have had the reverse effect.

This event has been a reset, full of enforced savings and a time of reflection.

Queensland has clearly been the benefactor, with close to 30,000 people moving north throughout 2020 from New South Wales and Victoria.

The market is not going anywhere anytime soon and us long-suffering Queenslanders are basking in the sunlight.

from Property UpdateProperty Update https://propertyupdate.com.au/the-3-key-factors-driving-queensland-property-prices/