What does population growth mean for property investors?

Whether you are a seasoned investor building your portfolio or considering your first investment property purchase, the Queensland property market offers ample growth opportunities. However, while it’s always essential to assess the fundamental drivers of the property market when making your next investment decision, it’s just as important to understand the implications of the ‘great migration’ to Queensland and the Government’s recent announcement to reopen international borders.

The great migration and investment properties  

A recent PIPA survey shows that 44% of property investors are now looking to purchase interstate - marking a 41% increase from a year ago. In addition, more than half now believe sunny Queensland offers the ‘best’ investment potential - a rise from 36% last year. 

ABS data from March 2021 shows many capital cities around the country experienced a net population loss of 11,800 in the first quarter of the year. On the other hand, Brisbane gained the most, with 3,300 people migrating to the sunny state. While most interstate migrants were initially spurred by the extended lockdowns across Melbourne and Sydney, the recent uptake of working from home is facilitating a lifestyle upgrade without affecting careers or incomes. 

Based on projections from the Queensland Government, the picturesque suburb of Kirra is expected to witness a 14% increase in population by 2026. As above, Kirra’s population growth is driven by appealing lifestyle factors, economic opportunities and tourism projects. In addition, past performance demonstrates that Kirra apartments tend to outperform detached houses on an annual percentage return basis. 

In line with the lifestyle appeals, apartments have proven to be the preferred dwelling type across much of the population - the lower maintenance elements of apartment living allowing people to make the most of lifestyle benefits and the prime location. 

Reopening international borders 

The Federal Government recently announced the long-awaited reopening of international borders since closing in 2020. With this announcement, experts are now predicting rental prices to sharply increase - with the majority of property values set to skyrocket in the coming months. 

As reopening the border returns skilled migrants and international students to Queensland, together with the influx of interstate migrants already making a permanent move to the sunny state, the demand for rental properties will continue to grow - marking an excellent opportunity for investors. Graham Cooke, Head of Consumer Research at Finder, says, “Not only will property values continue to rise, albeit perhaps more slowly, rental prices are also set to jump significantly.”

Property investors across Queensland, particularly in Mermaid Beach, can rest assured of performance. Mermaid Beach has already witnessed the median home price rise by 25%. A steady increase in median property prices over five years in Mermaid Beach translates to a 30.68% capital gain. 

Mermaid Beach has delivered a more robust performance in contrast to other Australian suburbs in terms of appreciation of property value. The average weekly rents on Mermaid Beach listings have reached the $520 mark, reflecting a 4.7% increase in returns based on the current median price in the suburb. These numbers have spurred interest in new properties such as Yves overlooking the pristine Gold Coast coastline.

Queensland isn’t the only state set to reap the rewards of open borders. States across the nation are all predicted to see increases in rent. Dairy Farmers Towers and Merewether in Newcastle, New South Wales, are two new off-the-plan developments already piquing the interest of property investors thanks to the suburb’s urban rejuvenation, heightened connectivity and conveniences. 

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