Interstate migration to Queensland and Victoria is increasing with house price differentials and jobs growth the key drivers of Australia's east coast construction and development activity.
Interstate migration however, according to Turner & Townsend, was outpaced by net overseas migration as a driver of population growth in each state leading to an increased demand for the construction of housing, schools, hospitals, shopping centres, transport and infrastructure.
Significant population growth caused BIS Oxford Economics to revise its earlier prediction of an oversupply in Melbourne -- indicating that the census figures showing a population growth of 109,000 more people than expected meant the city would now likely experience an undersupply.
The ABS March 2017 quarter figures revealed a decade high of 86,595 net overseas migrants, pushing the total for the year to 231,890 which accounted for 59.6 per cent of Australia’s population growth.
Interstate migration and natural growth saw Victoria rise in overall population by 138,559 in the year to March 2017. Compared to Sydney’s 120,685, Victoria is Australia's fastest growing state.
Queensland was some way behind with 74,462 net population increase, and only 27,521 net overseas migrants.
“Median house prices in Brisbane are at $515,000 which is half those of Sydney reaching $1,020,000," Turner & Townsend senior economist Gary Emmet said.
"Relocating to Queensland is seen as very attractive, especially for baby boomers close to retirement and young families priced out of the Sydney housing market.
"There were net 15,716 movers in the last 12 months according to the Australian Bureau of Statistics. Victoria saw even more interstate movers recording 18,557.
“Queensland gained net 10,122 migrants from New South Wales, whereas Victoria received net 6,715 migrants from New South Wales," he said.
“Median house prices in Victoria are averaging $713,000, hence there is less to be gained by moving from Sydney. However, jobs growth is driving Victoria’s higher interstate migration numbers. Victoria has added 301,000 jobs since 2010, the highest of any Australian state.
“Of these 128,200 jobs were added in the year to August 2016, followed by another 95,200 in the year to August 2017. Despite higher house prices in Victoria compared to Queensland, the net interstate migration figures are being boosted by migrants from Western Australia and South Australia, attracted by job opportunities,” Emmett said.
In the last decade, Queensland was the jobs leader in Australia adding 645,000 jobs, higher than both New South Wales and Victoria. Annual growth averaged eight per cent between 2002 -2007.
If jobs growth continues, there is a chance we may see interstate migration keep increasing," Emmett said.
For some prospective migrants, the house price differential is persuasive. For others, the strong economy and job opportunities in Sydney will outweigh the high cost of housing."
The Queensland construction sector, with its oversupply of inner city Brisbane apartments, would welcome an increase in both interstate and overseas migrants.
"However, as population growth in Victoria and Sydney remains at record levels, pent up demand for construction looks set to grow fastest in these locations.”