Understanding Growth Rates & Why the Sunshine Coast is a Stand Out

If you’re considering purchasing an investment property in South East Queensland you’ve probably done some of your own research. But if you’re trying to understand the growth rates and population predictions of various regions to find the greatest demand and best return for your investment, there can be some tricky figures to decipher so let...

When it comes to the population of a region, there are three ways it can grow:

Natural increase (births)
Net internal migration (not from here but chose to move here less those who left for elsewhere)
Net overseas migration (those that immigrated here less those that moved overseas)

If you’re considering a region that has experienced or is predicted to experience growth that is made up of high natural increase rates this can distort the figures for your property planning (i.e. if a child is born today, how long before they will form their own household?). So, while this is a good indicator of future demand, and a good indicator of product type required and household makeup, high natural increase rates don’t necessarily mean an increase in immediate (or even short or medium term) demand.

High international immigration rates can be a positive indicator for demand yet require deeper digging to understand what is driving the immigration as that can influence property types. For example, Brisbane sees massive immigration from India, China and the UK. The migrants from these countries will look at all areas of the property market and therefore property types. That said they can be heavily weighted in community living and apartments and tend to congregate in certain suburbs or precincts where they find it easier to assimilate in their own communities.

Another interesting example of how immigration can influence demand is that of Logan, just outside Brisbane, where immigration has a strong humanitarian (such as refugees or special visa applicants) influence. There are also large Polynesian and Asian communities (the most spoken languages other than English are Samoan, Mandarin) with a propensity for communal living. The effect of these types of migration can be reflected in strong rental demand yet might not translate into strong capital growth as it impacts both capacity to purchase and the average number of persons per household which impacts true demand.

The best indicator for an increase in demand is internal migration as people move, primarily for work (and lifestyle, noting capacity to live there, or money, comes first). Of course, the number reflected by net internal migration does include other categories of people such as children and retirees and those that have immigrated to other regions first, so when looking at the demand for net migration, there is science behind the household use for an area as that also relates to why people move there. For example, based on the average household sizes, 1,000 people moving to Logan could denote an increase in demand for say 380 new dwellings, yet the same number moving to the Sunshine Coast could mean demand for 475 new residences.

Let’s take a headline look at the components of growth and some potential implications for the property market.

BRISBANE

Almost 40% is births
Almost 60% is immigration
<4% is internal migration