Sydneysiders are cashing out of their million-dollar homes in favour of cheaper houses in the tropical north, says Macquarie Bank Ltd.
The ‘emerging exodus’ has been a part of the influx of interstate migration to Queensland. Job creation has since been on a rise and houses in Queensland are now half the prices of Sydney’s housing making Sydney 6th in the world for most expensive places to buy a home. In the mid-1980s and mid-2000s the same circumstances were at play. This led to an average of 134,00 people moving to the north over a three-year period.
“People have been leaving New South Wales at a faster pace over the past couple of years and movement into the traditional destination of Queensland is picking up,” Macquarie’s wealth management unit said in a note. “When the cycle turns, the acceleration occurs rapidly based on the experience of past cycles.”
Thanks to this change Australia’s comprehensive economy will likely be in good shape. Selling the homes for the millions they are worth and then moving north and buying cheap will benefit the mortgage -driven debt – the record income and a key hinderance for central bank rate trek currently at a record of 194 percent. Consumption will potentially be boosted and will account for more than half of gross domestic product.
Queensland gets most of its tourism through its diverse beaches, the main being surface paradise just over the border from New South Wales. This shift in population from Sydney to the north could add A$8.1 billion ($6.4 billion) into the Brisbane and southeast Queensland housing markets, making that equal to 25 percent of the current turnover.
Sydney will not be affected by this, because the A$8.1 billion that will be Queensland’s turnover of 25 percent will only represent about 10 percent of their turnover due the expensive real-estate, that will not be enough to affect their housing market. The city’s median house price has sailed past A$1 million.
Queensland is “so much better value for money and a much better lifestyle” according to Kim Brown, who moved with her family from suburban Sydney to a town 100km (62 miles) north of Brisbane in 2015. The property they Purchased was A$100,00 cheaper, and was better value because their living space was double the size of their previous home which they sold in Sydney. With the extra money they saved when purchase the house in Queensland, her family was able to live off that until her husband found work, they were able to pay off debt and had the opportunity to enjoy the more luxurious things in life such as owning a jet ski and going on holidays.
Critically, the mass departure to the ‘Sunshine State’ could build up the national property market by spreading housing equity around the country, Macquarie said.
A transaction has almost been completed for the Australian economy out of the biggest mining Bonanza in 150 years, which was based in western Australia and generated and fuelled internal population flows. At the high point of the boom, Western Australia brought 3,000 people per quarter; similar figures are now leaving for other states, Macquarie says.
While the downturn was less severe in Queensland due to a more diverse economy, its internal migration intake was flat by 2013, the lender said. That’s since been recovering, according to Macquarie.
Original Source: Bloomberg