A STATE OF RESILIENCE

WHEN IT COMES TO RUGBY LEAGUE , Queensland knows what it takes to dominate a State of Origin.

But when it comes to economic performance, the state hasn’t fared so well, according to Commsec’s quarterly State of the States report – at least until now.

For the first time in 13 years, Queensland has come out on top in the State of the States report released in January.

The reason is embedded in the state’s diversified economy, buoyed by the riches to be found in coal and gas exports.

Among the other key factors is one that most Queenslanders would readily appreciate.

The surge in population is also helping drive economic growth.

Even though more people continue to flock to the state, Queensland is not immune from the property downturn – far from it.

Words Nick Nicols

According to CoreLogic, Brisbane recorded its biggest drop in property prices ever in 2022.

CoreLogic’s Daily Home Value Index (HVI) revealed that home values slumped 10.9 per cent from their peak in June to January 28, 2023.

By comparison, the national index fell by 8.6 per cent in roughly the same period.

The figure is a headline grabber, and one that could easily be misunderstood.

The data deserves context to make sense.

CoreLogic’s head of research Eliza Owen offered that context when she downplayed Brisbane’s house price fall.

“The record fall in Brisbane home values has not made much of a dent in the gains made during the upswing,” says Ms Owens.

“The fall in the Brisbane daily HVI follows an upswing of 43.5 per cent between August 2020 and June 19, 2022, which was the fastest trajectory of rising values on record.

“This leaves home values across Brisbane 27.9 per cent higher than at the previous trough in August 2020.”

It’s a case of the bigger the rise, the harder the fall.

“Despite the large decline from peak, Brisbane maintains the third-highest gain in value of the capital cities since the start of the pandemic,” says Ms Owens.

Only Adelaide and Darwin have performed better with gains of 42.8 per cent and 29.6 per cent respectively since the beginning of the pandemic.

It’s one of the reasons Brisbane is holding its own for most property owners.

“There is marginal risk of negative equity for Brisbane homeowners, with the exception of very recent buyers, who purchased around the peak in June 2022 with less than a 20 per cent deposit,” says Ms Owen.

The past year demonstrates the broader trend that has made property a relative safe haven over the longer term.

Australian property booms invariably are bigger than the busts. Just compare prices over the past 30 years or more to work that out.

Even now, there are signs that the price downturn is running out of steam.

More so, Ms Owen sees affordability putting a floor under Brisbane prices with the median house value in the River City sitting at $435,170 lower than Sydney, while median unit values are $280,749 lower.

“The gap between Brisbane and Melbourne housing values is also significant, with a $119,697 gap between median house values and $97,692 difference in median unit values,” says Ms Owen.

“This could encourage ongoing housing demand from those willing to migrate to the state or own an interstate investment.”

Another factor that has generationally supported the Australian property market is overseas migration, and its long-expected rebound appears to be gathering pace, if the PropTrack Overseas Search Report is any guide.

The report has revealed that overseas rent searches on realestate.com.au were up 65 per cent year-on-year in 2022, some of it driven by a return of students to the tertiary education sector.

The level of searches over the year was even 20 per cent higher than pre-pandemic levels. Overseas buyer searches were also up by 10 per cent over the past year, and 11 per cent higher than 2019.

One of the key factors to note in the Australian property market is the importance of international migration as it contributes more than half of the country’s population growth.

The federal government’s latest 2022 Population Statement reveals that natural birth typically accounts for 44.9 per cent of growth.

From a Queensland perspective, the report also notes that Brisbane will outpace the rest of the state with the city’s population set to rise 1.9 per cent in 2022–23, before slowing to 1.3 per cent annually by 2032–33.

The rest of Queensland will grow by 1.4 per cent in 2022–23, before easing to 1.2 per cent over the next decade.

The data shows that Brisbane is becoming a population magnet for Queensland.

By 2032, just in time for the Olympics, the Population Statement predicts that Brisbane will have increased its population to 3.1 million to account for 50 per cent of the state’s population.

That’s up from 49 per cent at present.