Queensland the next investment Hot Spot

2013 … an optimistic year

Australia’s housing markets have bottomed and are now showing convincing signs of improving; it is time to buy and invest in Property

Queensland is identified as a Hot Property Opportunity !

Properties are currently undervalued and with the Queensland economy predicted to continue grow (at 4% per annum) well above the national average property prices in Queensland have every chance of playing catchup to those in the mature markets of Sydney and Melbourne

Queensland also has the highest population growth and job availability in Australia attracting migration and immigration into many parts of Queensland. Increased population + improved job and career prospects has a positive impact on the value of property, sending it upwards

Interest rate cuts are helping to ease the pressure on those wanting to buy and those already servicing existing mortgages; affordability is at near decade-best levels for prospective buyers; substantial ‘pent-up’ demand for new housing in select markets, namely NSW, WA and Qld and more recently several sentiment surveys showing consumers starting to warm to real estate again, the scene looks set for recovery

Australian capital cities will show a more gradual transition from stabilisation to recovery during this property cycle,  it has been predicted with forecast growth between 1 and 4% in capital cities over the next 3 years

In contrast, many of the country’s regional towns, and in particular, those larger centres associated with resources and mining, have actually seen prices and rents rise over recent years.  Australia’s resource centres continue to experience extremely tight rental market conditions, with vacancy rates at 0% and often well below 1%. Regional towns will gentrify into Regional Cities on the back of the Resources Sector and with this Economic and Employment opportunity Capital Growth soon follows

Resources principally are driving Queensland’s growth.  The Queensland Resources Council estimates there are $165 billion worth of resource projects in Queensland under way creating thousands upon thousands of jobs.  Yet Queensland’s economy has a broad base with just 9% of the state’s production coming directly from mining.  By comparison, one-third of Western Australia’s economic output comes from mining. As construction of projects complete and production begins the Queensland Economy willl escalate in annual growth output

The ABS employment figures for the 12 months to June 2012 confirm that 21,700 new jobs were created in Queensland – half of which were in the Brisbane region. Future job opportunities opening up daily in Resource Cities and Towns and also throughout Brisbane, Ipswich and other pockets of QLD

As we have been saying for some time now, we believe that end values should start to grow during 2012/13, accelerating in 2013/14 as the economic upturn gains momentum and the underlying dwelling deficiency becomes more pronounced

According to RPData, house prices, over the last four months prices have risen by 3.2% across the country, with 1.4% lift in September alone.  Australian house prices have inflated at an 8% annualised pace over the last four months even after accounting for seasonal factors.

Based on last year’s statistics, Queensland looks to be heading towards a massive undersupply, with 33,000 new dwellings needed during 2012, yet just 26,000 supplied – an undersupply to the tune of about 20%.

Queensland’s population growth is also on the increase, with a likely 75,000 increase during 2011/12 – up 50% or 25,000 on 2010’s 50,000 annual increase.  History shows that the Sunshine State attracts a third of Australia’s annual population growth.

There are three phases to Australia’s resources industry – commodity prices; infrastructure expenditure and higher priced exports.  We are only part way through the second phase.  Moreover, our proximity to Asia and their rising demand for household, business and financial services is very advantageous for the Australian economy. It is no secret that international giant corporations from India, China, Brazille have ownership in coal mines for the sole purpose of supplying their own Power Plants in their own countries. This is guaranteed income into the forseable future for Queensland; contrary to some ‘expert’ opinion that the mining boom is over … “We ask how is this possible when supply has not even begun?”

There is much more to Queensland’s economy than mining and the current machinations in iron ore/coal prices, with the new LNG industry not having produced one ounce of gas at this time, nor have certain coal mines in the Galilee Basin yet to produce any coal as these projects are under construction at this time.

A secure Investment must be underpinned by these Fundamentals : Economic Growth, Job Prospects, Infrastructure, Government Spending, Industry Investment, availability of Hospitals and Medical Facilities, Retail Trade, Education in Schools, Uni and Tafe, Public Transport, Roads, Rail, Ports, Airports, heightened demand for dwellings, inability to produce sufficient dwellings, etc.

Is Queensland the ‘next’ state to secure Capital Growth combined with strong rental yields?

We think so based on current and future underpinning fundamentals all being on the table at the same time …

Queensland Summarised : Fastest Growing State by Population and Economy and compared to other States, incredible value for your investment dollar in today’s prices + strong rental yields being achieved that will grow on the back of a high demand and being unable to keep up with supply of new homes

 Where in Queensland – ‘well that is a different discussion we can have with you’

Comments or questions are welcome.

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