There has been a noticeable decline in Australia’s interstate migration rates which is leading to a few effects on the capital city property markets. Chifley Securities has been watching the data.

People are now holding on to their properties much longer than usual and this is changing the face of capital city markets. A lot of this downturn has to do with a specific change in economic conditions which is the job conditions in the states of Queensland and Western Australia.

Chifley Securities notes that demographic data from the ABS shows that over the September quarter there were the fewest number of interstate migrations since 1993. Septembers numbers totaled 70,789 about 300 more than in 1993.

Over the last 12 months Australia hit a record low of only 1.45% of residents moving between states. This tells us that the fewer the migrants translates into a decline in demand for housing.

Here’s what’s happening; there is a clear difference between mining and non-mining states. Chifley Securities says that the data trends show that migrations is much lower in mining states versus non-mining states.

A similar trend has also been found in overseas migration. The rate of interstate migration varies between state to state, for example in Victoria migrations has hit record highs whereas in NSW migration is at an all time low.

Queensland and WA have always been the beneficiaries of the people who migrate out of Victoria and NSW but now they are feeling the effects mainly because large mining related opportunities are winding down.

Interstate migration has an impact on the property market by way of affecting values. If migration is down in an area that means demand for housing is down as well as construction, and household consumption.

With high migration rates there is usually higher taxation revenue, more jobs, consumption of building materials, home furnishings, and appliances. Migration rates have a flow on effect to economic conditions in each state.