Brisbane is one of Australia’s fastest growing Local Government Areas.
As we edge towards Christmas, I found myself pondering the year ahead.
The airwaves are so full of politicians pushing their own agenda and ‘fake news’ bandied about by vested interests, that I thought I’d do my own digging to find out what our future really holds. You might be surprised to learn there is plenty of reason for optimism. So I thought I’d share a bit of Christmas cheer.
Here are my Top 5 reasons to be cheerful.
First, to set the scene, we need to remember that Australia has had 25 years of unbroken economic growth. And we’ve just seen it lift to a four-year high of 3.3% for the year ended 30 June, 2016. While I know it hasn’t always felt like it, Queensland – and more particularly South East Queensland – is going all right. As Deloitte Access Economics put it in their September 2016 Queensland Business Outlook: “Slowly but surely, Queensland’s economy is returning to comfortable positive territory.” The report summed up our current circumstances as, “Queensland is well placed to achieve nation leading growth in the coming years.”
1. Economic growth and exports
Deloitte tells us the baton of growth has been passed from investment to exports, and Queensland continues to perform better than the rest of the nation. We have a solid growth outlook of 3.8% p.a. on average to 2019. Coal and gas prices have recovered significantly, making good gains this year, and agribusiness is also looking healthy, with cattle prices surging. The lower Aussie dollar continues to help drive international service exports, including education and tourism, with demand fueled by income growth in the emerging Asian economies.
2. Tourism gaining momentum
When tourism is on an upward trajectory, Queensland is definitely on a high. International overnight visitor spending keeps growing, up 10.6% to a record high of almost $5.1 billion in FY16. Deloitte is at pains to point out, this is no aberration. The surge is set to continue with forecasts showing overseas arrivals will climb on average 6.8% per year out to 2019.
3. Infrastructure and events
I’ve often written about the positive knock-on impact of infrastructure investment. Closely related to my previous point about tourism, is the boost we are set to enjoy from massive infrastructure projects. Notably, these include the $3 billion Queen’s Wharf Brisbane development spanning 10 CBD blocks along the north bank of our river, and the $1.3 billion new parallel runway at Brisbane Airport. The latter is a critical investment in capacity-building infrastructure to meet the needs of forecast passenger growth, set to take-off from 22 million in 2015 to around 50 million by 2035. Then, of course, we have the 2018 Commonwealth Games to look forward to. Over 6,600 athletes and officials from 70 nations are heading our way for this major sporting and cultural event. Imagine the spin-off.
You might wonder why employment is on my list of positives, given current talk of national labour force figures being distorted by under-employment and growth in part-time jobs. But it is worth pointing out how South East Queensland is relatively strong in the employment stakes. Deloitte tells us, whereas the rest of Queensland has an unemployment rate of 6.6%, SEQ is significantly lower at 5.7%. “In the long-term, the employment prospects for South East Queenslanders look good thanks to the growth in service-based industries,” they said, referring in particular to the increased focus on tourism, international education and the knowledge economy.
5. Population growth
Brisbane is one of Australia’s fastest growing Local Government Areas. We have welcomed on average 20,000 new residents per annum over the past 10 years While our population growth fell back for a few years, it is encouraging to now see it tracking upwards. Interestingly, analysts Urbis have observed net domestic migration is taking a back seat to net overseas migration, with roughly 30% of our annual gain (as at Sept 2015) attributed to oversea newcomers and only 13% from interstate. This might change, though, as people head to north to escape higher house prices.
It is interesting to note, our State Government is so bullish about our growth prospects, that its new 25-year blueprint SEQ Regional Plan allows for 7,700 new dwellings to be built in Brisbane every year out to 2041. And, despite Brisbane City Council’s criticism of the forecast as not achievable, the Housing Industry Association says the 7,700 figures is actually quite conservative. Brisbane home values have increased by 1.3% over the past three months, and are 4.1% higher over the past year.
Over the past five years, our home values have increased by a total of 17%. NAB’s last housing market report, released in August, forecast further steady growth in Brisbane (excluding the inner-city apartment market). So, all in all, I’d say our outlook for 2017 is pretty good.
Cheers to that!
Published in The Real Estate Conversation by Patrick Dixon; 22nd November 2016