QLD mining regions (Bowen & Surat Basins & Gladstone): Willing to help anyone with questions

HI Everyone,

Nearing the end of the year it would be great to hear everyones experience with regional QLD and how your properties have performed!

Its great to see the rental yields throughout regional QLD raising, unfortunately there are still areas where the council / developers / banks are not being pro-active enough in working simultaneously to ease the pressure in some towns. Below is what myself and my clients have experienced as well as what I have observed in general.

Moranbah is seeing higher rents yet again! where will the ceiling be? with a lot more projects in the pipeline that will directly affect the town in the next 3-4 years, it would appear that not enough housing will be created to supply this demand. It is great to see some much higher density development in order to provide what would be considered as more affordable accommodation…well for Moranbah anyway. Rental yields at capital value are around the 14-15% at least. The ULDA (Urban Land Development Authority) are still in the process of providing more land in the hopefully near future as demand continues to sky rocket for this town of just 9000 people. The median sales price has nearly doubled in the last twelve months, however this is partly due to the median sales price in the September and October being $850,000, up from $630,000 in August. So before you go counting your capital gains by doubling it, make sure you have the facts first! nonetheless, great capital gains have been had here this year.

Mackay seems to be going up well, however with a lot more development to the west. New estates are becoming increasingly more popular in Walkerston, Mirani and Marian. Rental yields still come in around 6%+ at capital value. Land seems to be coming available on par with demand (relatively compared to other areas). Mackay really suffered during the GFC so it seems the abundance of land could have been soaked up this year. Now the land is coming into much smaller supply you should start to see some capital gains synonymous with other well performing mining towns.

Dysart has performed well, with capital gains of anywhere between 10-20% in reality and strong rental yields. There has been a lot of mining activity in the northern part of the Bowen Basin this year which has helped rental yields grow exponentially. Judging by realestate.com.au there are actually a few properties offering first weeks rent free, this is a little bit disturbing. To me this means either one of two things. 1. Rental demand has softened and investors don’t want a reduced yield in the long run. 2. Investors are trying to push rental yields a bit higher in preparation of selling within their next lease to make there property more attractive. I could be completely wrong here however I do get concerned when people are offering rental offers especially in such a buoyant area like regional QLD.

In Gladstone, the hub of the hype, the median land sales price has gone from $200,000 at the end of last year to $250,000 today. I like to use the land sales price for Gladstone as many of the sales there has been house and land packages. This seems to be synonymous with the end sales price as building costs have not risen a lot this year. This in turn equates to a 10%+ growth in the region. Rental yields unfurnished are sitting a little low at the moment for my liking. The 738 properties listed on realestate.com.au is a little bit high, however 200 of these are listed as under contract. Many for sale are off the plan units and house and land packages also.

Emerald has experienced capital growth of 10%+ whilst rental yields have increased from 7% at capital values to at least 8%. Furnished accommodation is achieving rental yields up to 10%. There are 20 properties available for rent currently, whilst 5 of them are asking at least 20% above market value, this creates 15 properties available for rent in a town of 17000 people. of those for rent, only 6 are available in the next 10 days. The mines in southern Galilee Basin have not even began construction so there is a lot more pressure to come to the Emerald Market. The new woolworths complex is well under way and will be completed in April. 200 new people are expected to be employed there alone and will require housing. The CHR Council are working as hard as they can to provide land releases, however the land coming available in the next 2 years will not fill the demand that is and will be present.

Apologies for the areas I have missed, I am looking forward to hearing other peoples experiences so far this year! Exciting times lay ahead for regional QLD property investors, the years to come are to be awaited with excitement of what i consider a once in a lifetime opportunity. I read an interesting article showing India’s population increase will go from 240 million people to 590 million people in the next twenty years. So if you are asking how this mining boom is different than anything in history, that’s just one reason!

Happy Investing everyone!