While the property market in South East Queensland has struggled to recover from flooding in the region earlier in the year, as well as continued economic uncertainty, it’s a very different story for mining towns in Central Queensland which have seen very positive growth rates in the past year.
While the median house price in Brisbane dropped by 2.3% to $530,000 in the year ending June 2011, mining towns are experiencing year on year growth in median house prices of up to 10.8%.
The mining hot spots of Queensland
According to the latest REIQ figures released in June, the median house price in Gladstone, which is currently experiencing strong growth due to the development of Liquefied Natural Gas (LNG), grew by 10.8% year on year reaching $410,000 for the year ending June 2011.
A similar trend has been witnessed in neighbouring Mackay which experienced median price growth of 2.5 per cent to $408,000 in the past year. The median house price in Toowoomba, which is adjacent to the burgeoning Surat Basin Energy Province, increased 2.6 per cent to $297,000 over the same period.
The mining boom has not only however fueled growth in median house prices. Growth in the area has also resulted in a surge in rental yields. Cloncurry and Isaac have the second and third highest indicative gross rental yield of any council region around Australia of 11.4% and 11.1% respectively.
Mining towns expected to continue to see growth
Despite significant growth already experienced in towns like Gladstone, we anticipate this to continue in the years to come. While the threat of global economic uncertainty is weighing on the economy as a whole, the outlook for the mining sector is still promising. During the GFC there was no noticeable trend away from property in mining areas. In fact, over the past 12 to 18 months there have been a number of announcements about new multibillion-dollar mining projects which is underpinning property markets in these areas. Not only is this anticipated to benefit mining towns, but also to aid growth around the state.
We at the REIQ firmly believe the outlook for South East Queensland over the short term is for the market to remain relatively subdued. In the longer term, with the resource boom set to continue, we should see a flow-on benefit delivered to most major regions of Queensland.