How Queensland is Poised to Lead the COVID-19 Recovery
In terms of COVID cases and deaths, Queensland fared better than our neighbours to the south – particularly Victoria. Not only was that an obvious boon to our health and wellbeing, but it’s also given us a platform for our government to launch an ambitious economic recovery plan. A plan that is forecast to see our economy grow by nearly double that of the Australian average.
The Queensland Government’s COVID-19 Fiscal and Economic Review is forecasting a Gross State Product (GSP) growth in 2021 of 3.75 per cent – nearly double the Reserve Bank’s predicted national growth of 2 per cent. Not only this, Queensland’s total 2020 fall of 2.5 per cent is forecast to be just over half that of the national forecast decline of 4 per cent.
A strict health response meant internal lockdowns were neither suffocatingly restrictive nor long-lasting. As a result, internal business didn’t suffer as much as other states, laying the groundwork for a strong economic recovery. “We know that our strong health response has laid the foundation for our economy to ease internal restrictions, benefitting businesses right across the State,” said Treasurer Cameron Dick.
Building upon that solid foundation, the Palaszczuk Government has begun rolling out its COVID-19 economic recovery plan worth “more than $8 billion in recovery initiatives”. Key initiatives include a $1.2 billion health package, $950 million in payroll tax relief and $1 billion in jobs support. “The key to supporting ongoing economic recovery will be leveraging Queensland’s strengths,” said Dick. “Our diversified industries and regions, natural resource endowments, natural beauty, and our commitment to continue to grow the State’s skilled, adaptable and innovative workforce.”
Bright Weather, Brighter Future
But it’s more than just health measures and fiscal policy that will buoy Queensland’s property market as the pandemic subsides. The Sunshine State has always been an attractive destination for other Australians. In the 2018-19 financial year, Queensland recorded the highest net interstate migration (NIM) of any state, with 12,400 people, according to the Australian Bureau of Statistics (ABS). Victoria recorded the second highest at 9,900 people, while New South Wales clocked a loss of 14,000 – its biggest annual exodus in 10 years.
There are many reasons Australian’s around the nation flock to Queensland. For instance, compared with other east coast capitals, Sydney and Melbourne, Queensland house prices remain realistically affordable. The September issue of the Queensland Market Monitor (QMM) reported an annual median sales price of $550,000 in Greater Brisbane. That same metric is $740,000 in Greater Melbourne and $935,000 in Greater Sydney.
“Interstate demand continues to strengthen in Queensland with the main drawcards being affordability, liveability and the lifestyle on offer,” said REIQ CEO Antonia Mercorella. “And we anticipate this will only grow stronger when our borders reopen once more.” That attractive lifestyle is perhaps most evident on the Sunshine Coast, where the median house price improved 3.9 per cent over the last year, despite the pandemic.
Lending Made Easy
To further bolster the recovery effort across the country, the Federal Government has announced reforms that will make borrowing easier. While the current framework places the responsibility on lenders, forcing them to obtain and verify extensive information about the borrowers’ expenses, the new system will place shared risk on lender and borrower. Effectively, this will make the assessment process swifter and simpler.
The Housing Industry Association (HIA) welcomes the measure, saying it will help thousands of new home buyers get into their first home sooner. “Easing access to finance pulled us out of the 1990s recession and it will do the same now,” said HIA Managing Director Graham Wolfe. “By allowing rules to be eased the government is also allowing millions of dollars to be injected into the economy at a time when Australia needs it most.”
Of course, this amendment applies to all Australians, but if Queenslanders are already borrowing to purchase at a higher rate, it should affect the Sunshine State proportionately higher than the rest of the country.
The Stage is Set for a Surge
The proof in the pudding of Queensland’s recovery mission is buyer interest. Realestate.com.au reported a 39 per cent increase in buyer searches in Queensland compared with this time last year. New South Wales’ figure is slightly lower at 36 per cent, while Victoria’s is down to nine per cent. While owners remain reluctant to list, buyers are waiting in the wings for seller confidence to return; representing serious potential for property market growth in the near future.
Between a stringent health response, ambitious infrastructure investment, the highest net migration in the country, and appealing weather and lifestyle factors; Queensland is setting itself up to bounce back in a big way in the months and years to come. With buyer interest also high, the housing market also appears ready to boom.