Whilst Queensland may have something for everyone, investors are beginning to reap the benefits. In fact, the Queensland story is just beginning.
We are only just at the opening chapter of how the exciting projects will impact the market. Destination Brisbane Consortium; development of the Queen’s Wharf is already setting up the market for a strong few years. The project will be a $3 billion project that is set to include over 50 new restaurants and food outlets, an outdoor riverfront cinema, 6 new premium hotel brands including Brisbane’s own 6-star resort (yes, 6 star), a new high-rise signature building labelled the ‘arc’ and also 12 football fields equivalent of new public open space. The project is set to add approximately $4 billion to the Gross State Product providing a huge boost to the economy along with creating 2,000 construction jobs and upon completion a further 8,000 ongoing jobs. We can expect this beauty to be fully complete and operating in 2022 which will be a strong addition to the already performing local economy in Brisbane.
Whilst we have not actively invested in the Sunshine Coast or Gold Coast, and have chosen to stay within the commercial epicentre of QLD being Brisbane, where the fundamentals of good investing are at their strongest and employment and migration is less volatile we still look to the economic growth of the Gold Coast and Sunshine Coast as a positive for the QLD economy overall. As they grow they will continue to feed into the employment market and overall economic growth of Brisbane for the better.
So lets turn the page further north, the Sunshine Coast beams in the spotlight. The Sunny Coast has already begun benefitting from the opening of the $1.8 billion University Hospital about 20 minutes south of the CBD in Birtinya. The area typically struggles to hit large growth numbers in the property stakes due to it being a regional tourist hub that historically lacks the stronger employment drivers. Rest assured, the Hospital opening saw a 9.32% increase in housing values on average for the 12-months to July 2016 according to core logic. In the same period the epicentre of the Sunny Coast, Maroochydore only saw 5% growth. We can anticipate further growth here however with the $5 billion development by Stockland named ‘Aura’ and the $500 million new CBD in Maroochydore.
South of Brisbane, the chapter for the Gold Coast is also looking promising. The Gold Coast has struggled to keep pace with Brisbane’s growth rates, but due to the infrastructure going in around the Commonwealth Games there has been a major construction boom for the Gold Coast. Almost $1 billion is reportedly being sunk into the local economy for ‘games related’ projects. The past 12 months has seen the LGA outstrip the growth in Brisbane by 1.62% differential to the 12-month to July 2017, at a rate of 7.76% for Gold Coast LGA and 6.14% for Brisbane LGA. We do feel that this will be short lived for the GC as it does lack sustainable employment, but we do see a flow in effect to Brisbane as the tourism sector and that will have a flow on effect and supply chain to the business throughout Brisbane over the next few years.
Some good news is starting to filter through in the statistics, whilst still only modest, we always positioned Brisbane as more of an endurance race than a print to the finish line.
Lets look at how the median price is moving in these areal stages of the cycle.
Corelogic reports the 12 months to July 2016 and the 12 months to July 2017, for the following suburbs had an increase of the median house price of
*according to corelogic data
Whilst the housing market is starting to see some growth filter through, the townhouse market is yet to kick in some location. For example, Chermside houses are starting to see the growth filter through steadily and whilst the townhouse market is yet to move, but it is a filter down effect as buyers get priced out of the housing market they look to the more affordable townhouse market as an alternative and the increased demand pushes up prices over time. So if the houses are heading in the right direction, it is only a matter of time before townhouses start to catch up as the differential in price widens.
That coupled with the boost to the economy that will be seen when these projects land will be a good outcome for these areas on a mid to long term strategy as they have all the fundamentals of a good investment location.
Here’s a recent client success story of ours:
We purchased this house for one of our clients in Banyo, QLD for $425,000 in December 2014. A similar, slightly more dated property around the corner has just sold for $520,000.
This indicates an increase in value of over $100,000 in just under 3 years.
If you haven’t seen success, it is coming. We look forward to watching the story of the Sunshine State unfold.