KPMG population data suggests housing demand in regional Qld to grow

Amid speculation of a looming price fall in metro housing markets, data on population growth and collapsing supply in regional Queensland paints a different picture for 2023.

The numbers are in and it’s official, regional Queensland is in the midst of a population boom and demographers and real estate gurus predict house prices could remain elevated to meet surging demand.

Data from consulting firm KPMG Australia shows Mackay and the broader Central Queensland region added thousands of new residents to its rolls in the past three years, from new babies and international arrivals to interstate and intrastate migrants.

From 2019 to 2022, Mackay, Isaac and the Whitsundays recorded an influx of 9200 people for an annual growth rate of 1.7 per cent.

The figures make the zone one of regional Queensland’s hottest population growth spots alongside the Sunshine Coast, Nambour and Toowoomba.

Central Queensland, which takes in Rockhampton and Yeppoon to the east and Emerald to the west, recorded a growth rate of 0.8 per cent to reach a 2022 population of 236,100.

KPMG demographer Terry Rawnsley said a key driver for the bulging population was interstate migration as Sydneysiders and Melburnians fled Covid lockdowns for the Sunshine State.

He also said surging demand had left regional Queensland’s spare housing stock exhausted.

“Over the past couple of years, all of the spare capacity in the housing market has been absorbed,” he said.

“To get ongoing economic growth, how do you house the new workers coming into the region?

KPMG demographics guru Terry Rawnsley.

“The big handbrake is not demand, it is actually having beds for people to come back to at the end of their shift.”

Overseas buyers are also adding to the pressure.

PropTrack data shows Mackay and Yeppoon recorded the largest increase in overseas property searches, each with a 59 per cent increase year-on-year.

Senior analyst Karen Dellow said the most popular suburbs for overseas property seekers were located close to the main cities but also areas with higher employment, such as mining regions.

The Yeppoon Main Beach on September 2, 2021. Yeppoon is garnering increased attention from overseas buyers according to PropTrack.

Real Estate Institute of Queensland CEO Antonia Mercorella said there were a range of other factors that could prop up prices in 2023, such as low unemployment, comparatively low interest rates, an “obscenely tight” rental market and challenges in delivering more supply into the market.

“The cost of building supplies and getting access to the builders themselves, that is incredibly challenging,” she said.

According to Master Builders Central Queensland regional manager Dean Phillips, a downtrend in building approvals in Rockhampton, Yeppoon and Gladstone has “accelerated over the past three months”.

Mr Phillips said dwelling approvals were down 30.5 per cent, with house approvals down 43.8 per cent.

REIQ CEO Antonia Mercorella

In the Mackay and Whitsunday regions, dwelling approvals are down 19 per cent over the past three months.

Ms Mercorella said the gap between demand and supply would likely push prices in one direction.

“We still have incredibly strong demand and quite limited supply, so when you have those two factors, inevitably the market will continue to move in a northerly direction and it will hold firm.”

She cautioned however, about the dangers of predicting the future.

“Queensland has a series of different markets,” she said.