Showing posts with label population. Show all posts
Showing posts with label population. Show all posts

Monday, January 27, 2020

Brisbane Apartments compared with other capital cities

In the AFR on 23 January 2020 (page 3), there is an article titled "Rebound Sends Property to Records".  However, reading carefully, this does not apply to Brisbane apartments.

The graph in the article, sourced from Domain, shows that Brisbane apartment prices have fallen over the past 3 years and are not at a record.  A Brisbane apartment costs the same today as in about 2013.

Moreover, Brisbane apartments are cheaper on average than Sydney, Melbourne, Canberra and Hobart.

Is there a structural problem in Brisbane?  What is holding back price growth in Brisbane?  Poor quality apartment developments?  Ineffective State and local government?  Lack of infrastructure in inner city areas?  No population growth?  Fewer tourists?

Is it that approximately 40% of the people working in Brisbane work for government or government owned corporations?

Tuesday, February 27, 2018

Brisbane property prices to improve?

Brisbane is well placed to take over as the best performing capital city housing market over the next five years.  Dwelling values across Australia’s third largest capital city have risen at the annual rate of 1.2% of the past decade; that’s half the pace of inflation and dramatically lower than Sydney or Melbourne where annual gains have averaged 6.3% and 5.9% over the past ten years.

Importantly, there are a variety of economic and demographic factors that are likely to support improving market conditions across Brisbane including economic and demographic trends as well as a worsening performance across the larger cities of Sydney and Melbourne which will provide a lower relative benchmark for Brisbane.

Although Brisbane looks primed to experience an improvement in housing market conditions over coming years, I wouldn’t necessarily expect that the rate of growth in Brisbane will reach the heights of those experienced in Sydney and Melbourne over recent years.

See https://www.corelogic.com.au/news/could-brisbane-take-over-best-performing-capital-city-housing-market-5-years

Sunday, March 15, 2015

Brisbane the laggard, says Macquarie

"Brisbane is still very much the laggard for this cycle given the sluggish domestic economy, with periodic price falls still common particularly for the Brisbane unit market," Macquarie's latest report noted.
It was in part because Queensland continued to show population growth moderation as the recent mining boom subsided.
The lagging occurs even as prices emerge back into recovery and should exhibit strong price growth into 2015, it noted.
In my view, another big reason for zero growth in Brisbane is income growth has been negligible, and other costs (especially food and entertainment) have increased faster than salaries.  As a result, rents in Brisbane have basically been flat for two to three years.

Saturday, September 6, 2014

Economic Data remains mixed - RP Data

RP Data reports the following:

Mortgage demand has started to level recently
  • The RP Data Mortgage Index (RMI) shows that mortgage demand has begun to level over the past couple of months.
  • ABS housing finance data shows a similar trend with the market largely driven by upgraders and investors.
Economic data flows remains mixed
  • Population growth is winding down but remains high on an historic basis.
  • Dwelling approvals have shifted much higher over the past year and are at their highest ever level on an annual basis.
  • With population growth slowing and building approvals remaining high (despite the recent fall) we may see a better relationship between approvals and population growth over the coming years.
  • Consumer sentiment has been weak since the Federal Budget but is slowly increasing.
  • The unemployment rate has hit 6.4% with employment growth quite slow.
  • Mortgage rates remain low with banks competing hard for their share of the home loan business.

Friday, August 1, 2014

Housing Price Supply and Demand

From the AFR on 30 July 2014, p. 28

"Recent house price appreciation has been driven by more than simply a strongly growing population.  Low interest rates have encouraged domestic investors to allocate assets into housing.  Foreign investors have also been buying.  A reduced rental return on housing would eventually discourage domestic investors but probably comes with a lag.

The apparent equalisation between an undersupply of housing versus strong demand for dwellings in major metropolitan areas comes as the official cash rate remains at a record low of 2.5%, and as the major banks lower their fixed rate home loans in an attempt to entire more people to borrow more."

This article applies more to the Sydney and Melbourne markets than Brisbane.  It is important to look at individual markets, and not take southern trends and blindly apply them to Brisbane.

Tuesday, July 23, 2013

Population Growth

Population growth and employment drives house price growth.  Population decreases and unemployment causes property prices to fall.  The following statistics are relevant.




Wednesday, August 1, 2012

Brisbane Downtown Ghost town

An interesting article from The Telegraph that says that the Brisbane downtown is a ghost town.  But despite this, car parks are charging $72 to park for 3 hours.

Monday, July 16, 2012

Brisbane City Census Data

For the past few weeks, I have been looking at the 2011 census data.  It is very useful for property investors.  In my view, the best place to search is via an address search, and the results are then available in layers, from a few blocks, to suburb, post code area, and so on.  You can search here.

For Brisbane City downtown area, in 2011, here is some interesting data (full results here):



  • population - 7,888 people
  • median age - 29
  • Most people are in the 25 to 29 age group (22% of the population)
  • 1,526 families
  • 32% married
  • 37% have University qualifications (compared with 13.5% for Qld or 14.35 for Australia as a whole).
  • 4,516 dwellings in total (of which, 98.7% are apartments)
  • Average of 2 people per household
  • 50.9% of dwellings had 2 bedrooms
  • Median weekly household income - $1,828
  • 54.5% of dwellings are rented
  • Median rent - $530 per week
  • 0.8 cars per dwelling
  • Ancestry: "The most common ancestries in Brisbane City (State Suburbs) were English 18.0%, Australian 11.3%, Chinese 9.8%, Irish 7.0% and Korean 5.8%."
  • Country of birth: "In Brisbane City (State Suburbs), 33.3% of people were born in Australia. The most common countries of birth were Korea, Republic of (South) 6.6%, England 4.4%, China (excludes SARs and Taiwan) 3.9%, Taiwan 3.3% and New Zealand 2.5%."
  • 63.5% had both parents born outside of Australia


Sunday, July 15, 2012

Population Growth

Population growth often leads to property price growth.  Statistics from the 2011 census were released recently, and show the population growth for Queensland.  The question is whether this growth will continue, and at what rate.

The official population estimates show that Australia's population was a little under 4.5 million people in 1911 and by 2011 there were 22.3 million people.

The Commonwealth Censuses have also tracked the growth and development of the states and territories that make up the Commonwealth of Australia, as well as recording the distribution of the population between them.  In the 100 years between 1911 and 2011, population growth for the two most populous states, New South Wales and Victoria, has largely tracked that of the national population.  Both Western Australia and Queensland had relatively consistent shares of the national population until the 1960s and 1970s, when substantial expansion of the economies in both states began to occur, supported at least in part by mining development. Since 1911, Queensland's share of the national population has grown by 6.3 percentage points, while the population share for Western Australia grew by 4.1 percentage points.

See ABS



Tuesday, June 5, 2012

Interest Rates Down in Australia

The Australian Reserve Bank decreased its interest rate today by 0.25%.  BOQ immediately dropped its home lending rate by 0.2%.  Will this assist the Brisbane housing market?  It will not hurt, but it may not be enough to assist.  What drives residential property growth more is population growth and employment growth.  In Brisbane, many State Government consultants, contractors and employees are being fired, with the government bankrupt and trying to decrease its workforce by 20%.  So this will have a bigger, negative impact than any positive impacts of the interest rate decreases.

Thursday, April 21, 2011

Migration to Queensland

Bernard Salt from KPMG has a very interesting article in The Australian today. It says that interstate migration to Queensland is slowing. But this decline has been offset by international migration to Queensland and a higher birth rate. According to Salt, this means that the rental market will be good but the residential sales market will be adversely impacted in the short term. An extract:

"This time around, super is looking sick and older workers believe there's better value in working longer. The upshot is a diminution in interstate migration outflows and inflows.

This has affected the demand for property in states such as Queensland and Western Australia, where the economy and property industry have been geared around interstate-migration-supported growth. Take away interstate migration and these states are impacted, Western Australia less so than Queensland because of the mining boom.

But how long will this trend last? The answer is both simple and complex.

The slowdown in interstate migration to Queensland will last for as long as people have diminished confidence in their ability to achieve the shift. There needs to be time and positive consumer and workplace sentiment between the GFC and the recovery.

I'd suggest that, all else being equal, that timeframe would be three to four years, which means that recovery might not arrive until mid next year. But "demographic recovery" for Queensland could also be tempered by the floods and Cyclone Yasi as well as by further changes in policy settings coming out of Canberra.

And then there is the issue of negative media sentiment, which will continue for as long as the ABS reports show demographic decline."

Full story here. It is worth reading.

Sunday, November 7, 2010

Flats Are Flat

There are head-winds for investors in the Brisbane apartment market:

  • slowing population growth
  • foreign investors selling, because they profit from the high Aussie dollar
  • foreign investors not buying due to the high Aussie dollar
  • less foreign students, so less renters
  • higher interest rates

Recent articles set out some of these concerns....

"QIC chief executive Doug McTaggart has painted a grim picture of the residential market in South East Queensland. ... "Population growth in Queensland is suffering." ... Herron Todd White estimated there had been a 30 per cent drop in volumes from 2008. ... vacancy rates are trending up at the moment ... the current Brisbane market is showing some oversupply... " Australian Financial Review, 4 November 2010, page 60

"Overseas students and retirees are fuelling population growth in Brisbane's inner city, with nearly 13,000 people now calling the CBD home. While Brisbane's fastest-growing suburbs are in the city's east and south, the growth of inner-city living is the perhaps the most visible change.

"A lot of the accommodation now is just built for students and they have just small kitchens," Ms McLean said. She said five of the unit buildings in Brisbane's CBD were mostly student accommodation.

"Some of them where the students are living are turning into ghettos," Ms McLean said.

"Down Albert Street, Mary Street, at the Parklands (apartments) there at Roma Street," she said.

Source: CBD bulges as more move in

Units in Brisbane are among the cheapest in the country as property prices in the city continue to slide, according to analysts.

The Australian Property Monitors September House Price Report, released today, shows the median unit price in Brisbane fell 2.8 per cent from $366,533 to $356,352 in the last quarter.

Source: Brisbane unit prices on the slide

Brisbane's property market woes look set to continue for the forseeable future due a slump in migration and an oversupply in the market.

Analysts have tipped prices to remain stagnant or dip further at least until the middle of next year. ...

Property analyst Michael Matusik has long refuted claims of an undersupply in the owner-occupier and rental markets.

"Queensland's population growth is slowing - and significantly," he said. The state's net migration in 2008 was 84,275 people, with 21,228 arriving from interstate.

At the end of March this year, net migration fell to 55,845, with just 11,012 people coming from interstate.

"Our preliminary estimates suggest that more people are leaving Queensland now than arriving from interstate [due to the state economic downturn]," Mr Matusik said. Of the rental market he said: "The amount of vacant stock available is not only greater than most realise, but it is getting larger."

Mr Matusik said about 13,500 new rental properties were required to house 35,000 new residents to Queensland last year.

"Yet, 33,000 new rental digs became available - or over twice as many as was needed," he said. "This is not how I would define 'undersupply'."

Source: Property price slump


Sunday, January 17, 2010

Are more high rise apartments needed in Brisbane?

Brisbane will need an apartment building boom on the scale of Dubai if it is to accommodate a forecasted growth in population by 2030, the State Opposition claims. However, he estimated as many as 1725 20-storey buildings would need to be built before 2031 in order to cope.

"It is areas like Indooroopilly, Chermside, Mt Gravatt that are designated to do it," he said.

The plan also nominates the Brisbane CBD, Carindale, Toombul, Mitchelton, Wynnum Central and Toowong. Mr Gibson said the difficulty was finding the land in these areas to build thousands more apartments.

"You go through street by street and you identify where you can build 82 new 20-storey building every year for the next 21 years and the land is not there right now," he said.

Brisbane Times & The Australian

Sunday, September 13, 2009

Population

"There is the very real prospect that urban planners will have to manage the development of three Australian mega-regions (Sydney, Melbourne, southeast Queensland) each rising to between five and seven million by century's end."

Salt in The Australian

Sunday, August 9, 2009

Population Trends

A useful site for population statistics and estimated population growth projections.
http://www.health.gov.au/internet/main/publishing.nsf/Content/ageing-stats-lapp.htm
It has each area's projected population by age for each year.
For example, Inner Brisbane City is projected to grow from 3422 in 2007 to 7599 in 2019.
Indooroopilly for the same period will grow from 11,274 to 12,493.