Central Queensland: The New Frontier for Positive Property
April 11th, 2013 • No comments
The trends that have characterized the positively geared property markets of the Pilbara boom towns can now be identified in the resources hubs of Central Queensland, providing investors with opportunities for portfolio diversification.
Over the past decade, the development of large resource projects, significant infrastructure investment, sharply increasing workforces, massive demand for accommodation and a severe undersupply of rental stock have caused both rents and house values in the Pilbara towns of Hedland, Karratha and Newman to skyrocket.
The Pilbara’s major iron ore and LNG projects are now in their operational phases. Housing markets remain strong and continue to deliver investors leading rental returns but growth is stabilizing to more sustainable trends.
In contrast, Gladstone, Central Queensland’s industrial centre is very much in development. An established Alumina refinery has contributed to a healthy rise in house prices over the last several years, but its coal and LNG industries are still in their infancy.
Three LNG projects are currently in construction and another 14 infrastructure projects are in the pipeline (coal terminals, additional LNG and other mineral processing facilities). The value of these projects totals $105 billion – dwarfing Port Hedland’s $12 million, the Pilbara’s top town for infrastructure investment.
Moranbah is the Bowen Basin’s coking coal hub and services more mines than any other town in the country, drawing comparisons with Newman’s proximity to the Pilbara’s many iron ore operations. Moranbah has also seen its housing market strengthen following the commodities boom. It has $15 billion of approved and planned projects, including 14 coal mines to add to its existing 14.
While current and anticipated development in both towns is unsurpassed in Australia, investors will be aware of the softening of the market in recent months – a result of an increase in land availability and new residential development.
However, a combined $120 million in current and planned projects, a diversified long term commodities industry and projected population growth which is unlikely to be met with sufficient housing supply, they continue to make a strong investment case for the positive cash flow investor.
No comments yet