All that sun makes ev­ery­thing sweeter

What­ever the draw­backs, Queens­land re­mains hot for in­vest­ment

The Weekend Australian - Review - - Primespace - TERRY RY­DER HOTSPOT­TING

WILL Aus­tralians ever fall out of love with Queens­land? It seems no mat­ter what she does or what mood she’s in, the pas­sion lingers. Vic­to­ria is re­peat­edly jilted. Syd­ney is spurned by those who yearn for Queens­land’s warm touch. Ade­laide has her charms but can’t com­pete with the pre­co­cious beauty of bikini- clad Queens­land.

Even when sub­stance fails to match the im­age, Queens­land con­tin­ues to at­tract suit­ors. Suf­fer­ing from clogged ar­ter­ies, bad cir­cu­la­tion and se­ri­ous de­hy­dra­tion, well, none of it’s an is­sue. She’s just soooo hot.

There’s the very real prospect that the re­gion could run out of wa­ter, which has led to fever­ish fast- track­ing of a pipe­line to bring treated ef­flu­ent to a thirsty pop­u­lace. A de­sali­na­tion plant cost­ing more than $ 1 bil­lion is be­ing built, two un­pop­u­lar dams will cost $ 2 bil­lion- plus and a net­work of pipe­lines will link var­i­ous wa­ter stor­ages, also at hideous cost.

The re­gion’s roads are choked and one small part of the at­tempted so­lu­tion, the North- South By­pass Tun­nel, alone is cost­ing $ 3 bil­lion.

The Ipswich cor­ri­dor is one of the great growth ar­eas of the na­tion but its mo­tor­way is clogged at key times of the day, while state and fed­eral politi­cians make and break prom­ises amid much fin­ger- point­ing.

The state’s south­east also has the most se­ri­ously un­der­per­form­ing health sys­tem in the land.

Queens­lan­ders may soon be drink­ing their own ef­flu­ent but no one seems to care — in­ter­state refugees con­tinue to pour into the re­gion. If you have an ac­ci­dent on a south­east Queens­land road, the hospi­tal sys­tem prob­a­bly won’t be able to treat you — yet prop­erty buyer en­thu­si­asm is undi­min­ished.

As one mea­sure of this, the me­dian price for Bris­bane houses rose 17 per cent in the year to Septem­ber while unit prices rose 10 per cent, ac­cord­ing to re­searcher Aus­tralian Prop­erty Mon­i­tors.

An­other mea­sure is bad news for renters but pos­i­tive for in­vestors: a re­cent sur­vey nom­i­nated Bris­bane as the na­tion’s most ex­pen­sive rental city.

In Bris­bane, 28 per cent of av­er­age earn­ings is spent on rent, com­pared with 25 per cent in Syd­ney and 23 per cent in Melbourne.

Eco­nomic fore­caster BIS Shrap­nel, in its Res­i­den­tial Prop­erty Prospects 2007- 2010 re­port, pre­dicts higher growth in house prices in Bris­bane than in other cap­i­tal cities over the next three years.

And the Prop­erty In­vestors Sur­vey Re­port by fi­nancier Ashe Morgan Winthrop finds that prop­erty pro­fes­sion­als have a par­tic­u­larly pos­i­tive out­look for Queens­land, which is the most favoured state or ter­ri­tory for prop­erty in­vest­ment prospects over the next six months.

The key point is this: de­spite all the in­fra­struc­ture prob­lems, it makes ab­so­lute sense that buy­ers of real es­tate have such a fo­cus on Queens­land.

It’s a prop­erty hotspot that never seems to cool down. There’s al­ways some­where pump­ing in Queens­land.

My method of iden­ti­fy­ing hotspots is to find lo­ca­tions with some of the 10

hotspot cre­ator cat­e­gories’’ which are in­stru­men­tal in gen­er­at­ing out­per­form­ers. Nor­mally I ap­ply them at a mi­cro level, look­ing for towns or sub­urbs with three or more of the 10 key qual­i­ties. But it works on a macro level too and it ex­plains why Queens­land con­tin­ues to de­liver the goods for prop­erty in­vestors.

Six out of 10 cre­ator cat­e­gories — lifestyle fea­tures, boom towns, trans­port in­fra­struc­ture, sea change, gov­ern­ment de­ci­sions and the stay­ers — are all big in­flu­ences on the Queens­land prop­erty mar­ket.

You can make ar­gu­ments for some of the re­main­ing cat­e­gories as well, but we’ll fo­cus on those six.

One of the big­gest driv­ers of prop­erty val­ues is lifestyle fea­tures — in­flu­ences such as wa­ter, the beach, golf cour­ses and cafes.

Wa­ter is the most po­tent gen­er­a­tor of long- term real es­tate wealth and Queens­land is awash, pun in­tended, with al­lur­ing wa­ter- based en­vi­ron­ments — not just the ocean but canal­res­i­den­tial en­claves and wealthcre­at­ing river set­tings. The warmth of the cli­mate just makes it all the sweeter.

The fastest short- term cap­i­tal growth lately has been found in the boom towns, those places boosted by the re­sources boom or ma­jor in­dus­trial de­vel­op­ments.

Queens­land is a boom econ­omy driven by myr­iad boom towns — Gladstone, Townsville, Emer­ald, Dalby, Mount Isa, Mo­ran­bah, Mackay, Sa­rina and many more.

You can ar­gue that south­east Queens­land — that great mass of pop­u­la­tion en­com­pass­ing the Gold Coast, Bris­bane and the Sun­shine Coast — is one big boom town, thanks in part to its in­fra­struc­ture is­sues.

The re­gion’s des­per­ate ef­forts to play catch- up with the needs of wa­ter and road in­fra­struc­ture are gen­er­at­ing ac­tiv­ity mea­sured in the tens of bil­lions of dol­lars — cre­at­ing plenty of jobs and plac­ing pres­sure on hous­ing sup­ply.

Trans­port in­fra­struc­ture is a huge cre­ator of cap­i­tal gains. When a des­ti­na­tion has been dif­fi­cult to reach, a new mo­tor­way or by­pass can lift its prospects. Right now, Queens­land is em­bark­ing on a pro­gram of road, bridge and tun­nel build­ing made nec­es­sary by the hordes who have de­cided the grass is greener and the sand more golden up north.

The Tu­gun By­pass, now un­der con­struc­tion, will have mul­ti­ple ef­fects both north and south of the NSW border. The much promised up­grade of the Ipswich mo­tor­way will ce­ment the rich po­ten­tial of the Ipswich cor­ri­dor, where gov­ern­ment spend­ing and private sec­tor de­vel­op­ment run to tens of bil­lions of dol­lars. The Pa­cific Mo­tor­way, the Cen­te­nary High­way and the Mt Lin­de­say High­way are all tar­geted for up­grades, the Gate­way Bridge is be­ing du­pli­cated at a cost of $ 2 bil­lion, and a sim­i­lar amount is be­ing spent on cre­at­ing new busways.

Sea change is not in the head­lines so much any more but it re­mains a pow­er­ful force in real es­tate. We still have 65,000 to 70,000 Aus­tralians mov­ing each year to a sea­side lo­ca­tion out­side the cap­i­tal cities.

Long be­fore sea change be­came a buzz­word, Aus­tralians were flock­ing to the Gold Coast, then the Sun­shine Coast and then to places like Her­vey Bay, aptly de­scribed as sea change for bat­tlers’’. And now im­proved air links are en­cour­ag­ing peo­ple to seek their sea change fur­ther north, in Townsville and Cairns.

The Queens­land Gov­ern­ment spends much of its time pon­der­ing where to fit all the peo­ple. An ex­tra mil­lion will have to be squeezed into south­east Queens­land over the next two decades.

It has de­creed that the Ipswich cor­ri­dor will ab­sorb a good slice of the new pop­u­la­tion ac­tion. Bil­lions are be­ing spent on new in­fra­struc­ture and private de­vel­op­ers are busy in the area, which has am­ple land for hous­ing es­tates and in­dus­trial parks.

The Gov­ern­ment has also de­cided that Beaudesert shire, a largely rural mu­nic­i­pal­ity south of Bris­bane and west of the Gold Coast, is go­ing to be­come a me­trop­o­lis. De­vel­op­ers are swarm­ing all over this re­gion, buy­ing farms to turn them into in­dus­trial precincts and res­i­den­tial com­mu­ni­ties.

An­other gov­ern­ment- des­ig­nated growth area is Coomera, on the north­ern out­skirts of the Gold Coast. This area has the M1 mo­tor­way, a sta­tion on the Bris­bane- Gold Coast rail­way line, the Coomera River ( fo­cus of af­flu­ent canal- res­i­den­tial en­claves) and plenty of un­de­vel­oped land. Ma­jor en­ti­ties such as West­field, Devine, Stock­land and Aust­corp are all de­vel­op­ing there.

The most un­der­rated of the cre­ator cat­e­gories is the one I call the stay­ers. Th­ese are the places at the op­po­site end of the risk- re­ward scale from the boom towns. While min­ing towns can pro­vide spec­tac­u­lar short- term cap­i­tal gains, they can also have troughs to match their peaks. The clever and the lucky can get rich quick, as long as they get in and out at the right time.

The stay­ers, on the other hand, are low- risk lo­ca­tions that pro­vide steady growth and per­form in good times and bad. Queens­land is the quin­tes­sen­tial stayer of Aus­tralian real es­tate. It keeps on de­liv­er­ing.

Bris­bane has been the best longterm real es­tate per­former among Aus­tralia’s eight cap­i­tal cities. It av­er­aged 11 per cent a year in house price growth be­tween 1970 and 2005, which means Bris­bane prices have dou­bled ev­ery six years or so over the 35 years.

And Bris­bane has main­tained its av­er­age more re­cently. Residex data in­di­cates the city’s me­dian house price has grown an av­er­age 11.5 per cent over the past 10 years, com­pared with 8.2 per cent in Syd­ney and 10.5 per cent in Melbourne.

An­other mea­sure comes from an RP Data sur­vey to find the city sub­urbs show­ing the best re­sults for in­vestors. It iden­ti­fied Bris­bane as the lead­ing per­former.

The re­search pin­pointed sub­urbs which had shown price growth of 10 per cent or more and also rental re­turns above 4.5 per cent in the year to May. While only three Syd­ney sub­urbs made the grade, 38 Bris­bane sub­urbs met the cri­te­ria.

With so many com­pelling hotspotcre­at­ing fac­tors all hap­pen­ing at once, it jus­ti­fies the un­remit­ting faith dis­played in Queens­land by mi­grants and in­vestors — even if they have to take their ef­flu­ent with their af­flu­ence.

Rolled gold: The great mass of pop­u­la­tion en­com­pass­ing the Gold Coast, above, Bris­bane and the Sun­shine Coast is one big boom town

Tak­ing off: The Tu­gun by­pass

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.