Queensland dominates growth numbers - but not the trends

Posted on 2/01/2008  

Following population growth is one way for investors to decide where to put their money. But it's not always as simple as going where the numbers are biggest: you need to take note of trends.

If you only took note of the big numbers, you might buy on the Gold Coast. The population growth there is far greater than in any other regional centre in the land. It added 18,000 residents in FY2007, which is considerably more than many of our capital cities and three times as much as the next best regional area (the Sunshine Coast).

Both the Queensland coasts are consistent long-term growth areas and deserve consideration from that viewpoint. But another school of thought says they are not out-performing normal growth trends. The Gold Coast is doing what the Gold Coast always does while the Sunshine Coast's recent growth has been well below its longer-term trends.

Adelaide added 11,500 to its population in FY2007, not nearly as much as the Gold Coast, but this level of growth is one reason why the Adelaide market has been surging lately - because 11,500 is well above the norm for the South Australian capital. Adelaide's 2007 growth was 51% higher than its long-term trend, because the city has snared a higher share of overseas migration.

Overseas migration is a big factor in Australia's growth. Research from Matusik Property Insights shows that national population growth in FY2007 was the highest in two decades and much higher than world averages - with almost 60% of the extra 315,000 citizens coming from overseas migration.

So overseas migration is important to the real estate market and Adelaide is performing above trend largely because of it. This is one reason why the city warrants investor attention (as well as its affordability and the big boost from resources projects).

This idea of areas performing above or below trend is the main theme of a recent Matusik Snapshot on population growth. The research shows that Brisbane and Queensland are the standouts among the capital cities and the states, based on the raw numbers.

Queensland added 90,500 residents in FY2007, well ahead of second-best Victoria with 77,000 and third-placed NSW with 72,000. Queensland is also projected by the Australian Statistics Bureau to collect the greatest share of growth over the next 25 years, while Brisbane is expected to gain more new residents than any other capital city.

But Matusik suggests the ABS projections are a tad bullish because Queensland is currently not keeping up with growth trends. Australia's current growth is 41% above trend but Queensland is just 21% above trend. NSW, South Australia, Western Australia and the ACT are all 50% above trend with recent population growth.

The state with both really large growth numbers and performing well above trend is Western Australia. It added 47,000 new residents last year and that was 52% above its longer-term trend.

Looking beyond the big cities, places that have recently out-performed longer-term trends include Ballarat, Bendigo and Latrobe Valley in Victoria, Bunbury in Western Australia and Tamworth and Wagga Wagga in NSW. We are, however, talking relatively small numbers.

Places where the population growth numbers are significant and are performing above trends include Townsville, Cairns and Mackay in Queensland.

So what can we conclude from all that? Queensland (both as a state and in terms of individual cities within the state) will continue to produce impressive population numbers; Adelaide is starting to become a contender after a lifetime of not featuring; and Melbourne and parts of regional Victoria continue to be the quiet achievers.

ENDS

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