Property buyers are flocking to one Australian state, leaving it largely unaffected by the halt to overseas migration, industry experts say.
Sydney’s apartment market is recovering better than expected after suffering from migration loss, with data suggesting the pre-existing underlying unit shortage was greater than previously thought, the Housing Industry of Australia says.
But Queensland has topped its overall property market performance scorecard for the first time since 2007, thanks to interstate migrants flocking to the Sunshine State.
With building activity continuing to boom across the nation, it had been hard to pick just one jurisdiction outperforming the pack, economist Tom Devitt said.
“Interstate migration has offset some of the loss of overseas migration in Queensland, unlike other east coast states,” he said on Friday.
“More than twice the number of interstate migrants are heading to Queensland than the average of the past decade.
“Other states have also seen a rise in interstate migration but none as strong as Queensland.”
South Australia and Tasmania also benefited from interstate migration and are experiencing record volumes of building activity, ranking second and third.
Mr Devitt said the biggest improver had been Western Australia, jumping from the bottom of the table into fifth place in less than a year after the state’s exodus of residents reversed.
At the other end of the spectrum, Victoria had suffered greatly from the loss of overseas migrants, pushing it down to seventh place, with unit approvals and commencements plunging more than 40 per cent below their decade averages.
“A surprise has been the strength of the apartment market in NSW,” Mr Devitt said.
“Multi-unit commencements in Sydney returned to pre-pandemic levels and recent approvals support this upward trend.
“The number of medium density units gaining approval in NSW has also reached a 25-year high.
“This is a very strong result given the adverse impact of the decline in overseas migration. It suggests that the underlying shortage of apartments in Sydney was greater than previously thought.”
ABS data released earlier this week showed more than 60,000 people departed Sydney and Melbourne to other parts of the country in the 12 months to March.
HIA chief economist Tim Reardon said that was part of the general exodus to regional areas as the population shifted towards lower density locations.
Mr Reardon said the trend had particularly compounded Victoria’s loss of overseas migration, which had underwritten the state’s economic growth for the past decade.
In the latest Statement on Monetary Policy released in full on Friday, the Reserve Bank of Australia noted rents had soared in regional areas and smaller cities since the September quarter, but apartment markets in Sydney and Melbourne – key markets for international students – went backwards.
The central bank said those big city unit markets had began to stabilise, leaving advertised unit rents 8 per cent below pre-pandemic levels in Melbourne and 2 per cent below in Sydney.
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