Queensland's housing market was not left unscathed by the COVID-19 outbreak, but its southeast region could drive the recovery in the long-term, a report from CoreLogic shows.
Before COVID-19 took its toll on the economy, several factors indicted growth across the state's dwelling markets, particularly in the South East Queensland (SEQ) region, according to the report.
A factor was the moderation in dwelling completions. Over the March quarter, only 8,805 homes were completed, down from a peak of almost 12,300 three years ago.
"As the supply of dwellings across the state had moderated, the rate of population growth was positive, but slowed from 1.8% in 2018 to 1.6% over 2019. However, Queensland has had the highest volume of net interstate migration since September 2017," said Eliza Owen, head of residential research at CoreLogic.
Three SEQ cities — Gold Coast, Sunshine Coast, and Ipswich — reported the highest volume of net interstate migration in the state, based on the June 2019 data from the Australian Bureau of Statistics. The territory where most migrators to Queensland came from was the Australian Capital Territory.
Owen said these migration patterns reflect the strength in demand across SEQ. This will be crucial in the growth of the state's housing market as it recovers from the impacts of the outbreak.
"It is evidence of a desire to migrate to the region, even before the onset of the pandemic had normalised remote work arrangements for professional and clerical work. This structural change to housing demand may amplify relocation to South East Queensland in the long term," she said.
Queensland, so far, has recorded mild declines in dwelling values amid the pandemic. Over the quarter, the capital growth declined only by 0.2% in Brisbane and by 0.1% in regional markets. This is in comparison to the more substantial declines, particularly in bigger housing markets in New South Wales and Victoria.
Owen said the inner-city region is the only market in the city to record a decline in dwelling values. This could be due to its poor performance in the investment housing segment.
On the other hand, Brisbane-East region reported an increase in sales and a 1.9% gain in values.
"Low interest rates, deeper vendor discounts and a relatively low price point may be supporting first home buyer demand in this region, which could be attributed to value increases," Owen said.