Hi All, First time posting on this site. I work in the property/lending industry and have been watching Gladstone closely. So closely that I have a contract for a 4 bedroom house on my desk. I havent yet exchanged as I am becoming more hesitant on Gladstone and its prospects. Yesterday I read the following artcile from HTW valuers August monthly report. Some interesting insights into Gladstone. Would love your thoughts on this as capital growth is all about demand and supply and the restriction on land supply/development and going on this article it seems demand may waiver given future housing stock/developments coming onto the Gladstone market:

"It is very difficult to gauge where the Gladstone

residential market is heading. After approximately 12

months of strong capital growth and high rental returns,

market activity began to soften in November 2011. More

recent market transactions have indicated a decline in

market values. Our enquiries with several local agents

indicate that listing prices have dropped by as much as

20% with around 5% drop in actual selling prices. With

the ever increasing amount of competition coming onto

the market, we consider that further market correction

may occur.

As discussed in previous editions of the Month in Review,

one of the main influences over the market were the

number of workers required to construct the LNG plants

and other major projects being developed in Gladstone.

According to recent data, the peak workforce of around

8,000 workers is expected around the end of 2013/early

2014.

Approximately 5,300 fly-in fly-out workers will eventually

be housed on Curtis Island in workers camps. These camps

are being built progressively. A further approximately

3,800 rooms are planned on the mainland (number of

persons unknown).

The number of people in fully operational workers camps

will relieve significant stress off the Gladstone rental

market. This has already been displayed in some cases.

Recently Bechtel (major construction company building

the gas plants) reportedly handed back 125 rental houses

and units to the rental market, temporarily flooding

the rental market. Agents are reporting that rents have

stabilised and that vacancy rates have increased slightly.

Furthermore, a local inner city motelier has advised that

occupancy rates have dropped by approximately 30%

on the back of more and more workers being housed in

camps on Curtis Island.

Other than workers accommodation camps we are aware

of the following proposed accommodation in Gladstone:

• In the order of 1,061 allotments are currently under

construction or close to construction.

• Approximately 120 units currently under construction

in Gladstone. A further 849 units have development

approval from Gladstone Regional Council but have

not yet commenced construction.

• A new 60 room motel (Mercure) adjoining Yarralla

Sports Club on O’Connell Street, Barney Point is

nearing completion.

The above indicates a huge supply of accommodation

which will be bought to fruition over the next couple of

years to combat the accommodation demand for workers

in relation to major industrial projects in Gladstone.

This stock if not absorbed by the market, will potentially

result in price discounting for end lots/houses/units and

in turn impact upon the value of development sites.

At this stage it is difficult to predict the affect on the

market moving forward, however we believe that there

are increased market risks at this stage of the property

cycle for Gladstone and purchasers should be acting with

caution"