By Herron Todd White
April 2020

Sunshine Coast Property Update

The Sunshine Coast, like most regional property markets, is underpinned by population growth. The Sunshine Coast has traditionally been one of the fastest growing regions in Australia with the latest official population count of 375,271 as at 30 June 2018.

Population growth on the Sunshine Coast has slowed from the halcyon rates of close to six percent per annum in the early 1990s and touched a low point of 1.4 percent in 2011 due to the subdued state of the economy at the time. Population growth has since reverted to an average of 2.4 percent per annum from 2011 through to 2018.

Official state government projections indicate that the Sunshine Coast’s population will reach approximately 583,000 residents in 2041. Although this implies a strong increase in numerical terms, it envisages that the rate of population growth will only average two percent per annum over the 25 years from 2016 to 2041, considerably less than the 3.2 percent average experienced over the 25 years from 1991 to 2016. Future growth will nevertheless remain well in excess of the Queensland and national averages.

When looking at the sales volumes of residential properties, we can see that there is a direct correlation to population growth. In circa 2003, we see the high peaks in our population, which is reflected in the sale volumes in the corresponding period. Equally in 2011, when the Sunshine Coast was at its lowest growth point, sales volumes were also at their lowest.

Within the local economy, main drivers traditionally are the tourism and construction sectors, and for a number of years both these sectors have been performing pretty well. Over the past few years there have been a number of infrastructure projects that have helped to bring a level of maturity to the Sunshine Coast. The first major project was the Sunshine Coast University Hospital and the continued growth surrounding the university which has benefited both the health and education sectors.

More recently the Maroochydore CBD, Sunshine Coast Airport expansion and the Sunshine Coast International Broadband Submarine Cable project are all under construction and are all massive for the area.

All these projects will continue to attract people to the Sunshine Coast and drive the market in the future.

Speak with a Sunshine Coast Mortgage Broker today.

Rockhampton Property Update

When most people think of the Central Queensland economy, they think of the resource sector, particularly coal and gas. Yes, it is true that Rockhampton itself is heavily influenced by these two mega industries however in addition to this, the Rockhampton region is considered to be one of the most diverse economies within central and regional Queensland. The region thrives on a range of other industries including acting as a regional government hub, being one of the top two regional Queensland towns for education services and facilities, a huge agriculture basis and it has always been a long term hub for the railway, construction and defence industries. It is also seen as an emerging tourism destination. This diverse range of employment industries has seen Rockhampton minimise its volatility over the past decade with limited numbers of swings in the property market compared to neighbours such as Gladstone to the south, Emerald to the west and Mackay to the north.

After a slowly declining six year period from late 2013 to mid 2019, we have finally started to see the property market respond in a positive way with growth recorded in both sales activity and sale prices across many sectors of the market in the past six to nine months. So what’s driving this change, you may ask. Well in hindsight, the catalyst that turned the ship around was the largely unexpected federal election result in May 2019 when unprecedented swings across regional Queensland resulted in a massive boost in confidence to the resource sector. Production increased during the back half of 2019, creating a wave of new jobs and increased confidence. Initially we saw a tightening of the vacancy rates for rental properties which quickly resulted in increased rents. Sales followed suit shortly afterwards.

In more recent times, government infrastructure spending is at an all time high with multi million dollar projects currently underway including the duplication of the Capricorn Highway between Rockhampton and Gracemere, the Parkhurst Highway upgrade, a billion dollar Rockhampton Ring Road project and ongoing Defence Force projects to name a few.

Of course as I write this the COVID-19 outbreak is impacting the world and Australia. Unprecedented times and its impact is already having a disastrous effect on all levels of the economic front. The extent of its impact locally on the property market is still largely unknown. Hopefully the powers at be are making the right decisions in managing this crisis and we all get through this together sooner rather than later.

Speak with a Rockhampton Mortgage Broker today.

Gladstone Property Update

Gladstone has mostly always managed to live in its own little bubble when it comes to how its market performs. It has at various times over the past few decades bucked the trends that were occurring around the state at the same time, such as when most other regional markets were suffering the effects of the GFC, Gladstone remained relatively buoyant on the back of major industrial announcements which would eventually turn into the biggest boom period Gladstone had ever seen. No doubt about it, Gladstone has been and probably always will be a boom and bust town whose residential market is not too heavily influenced by national or international trends but one that is definitely driven by strong local drivers. Major industry announcements have the potential to change Gladstone markets on their heads basically overnight and these announcements, followed by boom periods, have occurred several times over the past few decades – think LNG, Yarwun 2, the refinery and the smelter.

Over the past few years, the market has been driven by something most people are not accustomed to in our region and that is the affordability of property. Yes, Gladstone went from being one of the most expensive regions to live in the state to one of the cheapest regions in the space of about five years. Affordability is likely to remain the key driver for our markets in the foreseeable future. While there is always talk of new industrial projects in Gladstone, more often than not, it remains as just talk. There are no major industrial projects of substance that will have a massive impact on our markets, however smaller projects such as the proposed solar farms, the proposed hydrogen plant and the Phillip Street Communities precinct will have positive flow on effects for our markets and our economy.

On the back of affordability, we have seen a definite shift in the residential market with a good mix of buyer types currently active in the market, including first home buyers, upgraders, empty nesters and investors. We predict the market will move slowly and steadily over the next few years basically until the region meets a more realistic price point which is in line with its regional neighbours or another major industry project approval is ticked off creating another boom.

Bundaberg Property Update

Setting aside COVID-19 for a moment, affordability and lifestyle seem to have been the biggest drivers in the residential market over the past few years in this region. No particular one driver stands out.

As to what the future holds…. no crystal ball but with the developing global health issues and Paradise Dam situation, things could get interesting.

Speak with a Bundaberg Mortgage Broker today.

Mackay Property Update

There is no doubt that the Mackay economy is heavily influenced by the resource sector in the Bowen Basin and associated service industries located in Paget. Mackay enjoyed a significant and sustained mining boom which lasted until about 2012/2013 when a major downturn in the resource sector had a massive flow on effect on the Mackay economy and residential housing market. There were definitely some very hard times with significant job losses. The residential market fell between 20 percent and 30 percent, with the median house price falling around $100,000 during this time.

The downturn did have some positive effects in Mackay, allowing the economy to diversify and not be fully reliant on a booming resource sector. Housing affordability became a real positive for the city, with workers who had been previously priced out of the housing and rental markets now able to enter the market.

Since 2017, the Mackay residential market stabilised. Throughout 2018 and 2019, Mackay has seen large infrastructure projects (such as the Mackay Ring Road project), an improved resource sector and increased employment opportunities have seen improved market conditions in the residential sector. Throw in historic low interest rates and all the ingredients are there for sustained growth in residential real estate in the short to medium term.

The one big caveat to this is the current COVID-19 pandemic and the economic effects it might have. At the time of writing, there has been limited disruption to the major industries in Mackay and the Bowen Basin, however, should the virus make its way here and into the Bowen Basin resulting in large disruptions and possible mining shutdowns, the effects could become quite pronounced. I guess only time will tell.

Speak with a Mackay Mortgage Broker today.

Hervey Bay Property Updates

The main economic impact in the next three to six months for the Fraser Coast region will be the flow on effects from the Coronavirus to business and society. Confidence is likely to be subdued for both owner-occupiers and investors in residential property with the public expected to be cautious and perhaps just wait out the situation until the worst has passed. Values are likely to flatten as demand reduces with selling periods extending up to six months.

Properties available for rent are very scarce in Hervey Bay at present, with one agent reporting that their business has been reduced to only one listing for a single residential dwelling and three units. Due to the shortage, higher rents can be achieved with this trend set to continue in the short term. Given that the property market is in uncharted territory with regard to the impact of the Coronavirus, it is unknown at this point the extent of possible high unemployment from the potential closures of small businesses and negative effects from minimal tourism. The increase in medical related employment over the past five years for the region will be of benefit for property owners with more reliable employment in this sector and high demand for medical services. An increase in consumers seeking options with mortgage brokers and banks for existing finance is expected with uncertain times ahead.

Prior to the arrival of the Coronavirus crisis, the Fraser Coast was looking to benefit from the projects due to get started from the Hinkler Regional Deal worth $260 million. The deal was made between the federal government and local councils with projects that include $40 million for the CBD redevelopment, $24 million to flood-proof roads, $9.2 million for the redevelopment of the Hervey Bay Airport, $7.7 million for the Boundary Road extension and $7 million to establish a new hospice in Hervey Bay. Going forward, it is hoped that these projects will still commence this year pending the current international developments.

Speak with a Hervey Bay Mortgage Broker today.

Emerald Property Update

The resources sector employment remains strong which is holding up our market across the region with a slight firming in some areas. New employees to town and those being squeezed out of the rising rental market are the most active purchasers at present. Some who purchased in the boom have seen values lift enough to now upgrade or move on but these are still a minority. All price points are active with the top end having seen the strongest gains recently. Our market will continue to be dominated by the outlook for the resource industry.

Speak with a Emerald Mortgage Broker today.

Townsville Property Update

Jobs and job security are major drivers of our local property market with both of these currently heading in the right direction prior to COVID-19 directives.

Over the twelve months since January 2019, we have seen a trend increase of 7.1 percent in the number of persons employed in the Townsville region. Our unemployment rate is on a downward trend and the higher levels of business confidence and strong rates of job advertising being observed bode well for continued strength in employment creation in the coming months.

We have a strong pipeline of projects proposed to commence in 2020 or currently underway, with completion of the North Queensland Stadium and its hosting of events now a reality. This is providing a positive driver along with other proposed inner city projects such as the SeaLink ferry terminal, the Cowboys Centre of Excellence and the 166-room Double Tree by Hilton hotel.

Detached housing in inner suburbs such as Belgian Gardens, North Ward and South Townsville in close proximity to entertainment and lifestyle hubs are seeing sales rates quickening and selling periods reducing. Sales however are still price sensitive and price movements thus far have been minimal.

We are however entering a period of unprecedented global economic disruption with COVID-19. Just how this will translate in our local market in terms of jobs and job security will be a major indicator to watch over the months ahead.

Speak with a Townsville Mortgage Broker today.

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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.