Savvy property investors are always on the lookout for the hot spots of tomorrow because that’s where the greatest potential for capital growth lies.
Some of the tell-tale signs of potential future growth are: beneficial new infrastructure such as new roads and transport, redevelopment of retail centres, and more lifestyle amenities such as new recreational centres, café villages and restaurants.
So buyers, let me tell you about Toowoomba.
Toowoomba is located 125km west of Brisbane and in my opinion, is one of the most exciting emerging regional centres in Australia. It’s already our second largest inland city (after Canberra) but its growth is far from over.
Right now, Toowoomba has all the hallmarks for growth. We believe its strong focus and investment in infrastructure, retail and lifestyle precincts will have an impact on both interstate migration and employment opportunities in the short, medium and long term.
Several multi-million dollar projects are either underway or being planned, namely the $1.6 billion Second Range Crossing, the development of the 550 hectare Wellcamp Airport Business Park; the $500 million redevelopment of Grand Central shopping centre and the transformation of the railway precinct into an urban village and parklands.
To remind you – the key indicators of a hot spot are beneficial new infrastructure, redevelopment of retail centres and more lifestyle amenities … and Toowoomba has them all.
Guess what else is great about Toowoomba? The median house price is just $362,000 (CoreLogic). This affordable price point is not only attractive to the locals, it’s also attractive to tree changers, downsizers and investors. The median house rent is $305 per week (realestate.com.au) – a respectable yield of 4.4%.
When do you buy in a hot spot? Ideally, it’s pretty soon after major projects have been approved or have commenced. The effects are not yet there, so they haven’t been felt by the property market – yet.
Our McGrath Toowoomba Principal, Toby Sandell says we’re at the best point in the cycle for buying for long-term capital growth now.
“Our local market has been subdued for the past year since the banks tightened investment lending. As a result, we’ve seen very few investors in the marketplace, a decline in sales volumes of 33% (APM) and the region’s average days on market has increased to 67 days (REA),” Sandell says.
“While there’s fewer investors, the flipside is we’ve seen more first home buyers and upgraders taking advantage of affordable buying and lower interest rates. There is good demand from locals for quality properties in the right areas.
“Interestingly, the median house price rose by 1% over the year despite these tougher conditions. The fact that the price is holding and even increasing slightly is a sign of Toowoomba’s resilience and strength. One reason for this is strong and stable employment with the state’s lowest unemployment figures.
“In the lead-up to Spring, we are just starting to see a few more positive signs with a bit more buyer enquiry and a few more investors from Sydney and Melbourne returning to look for well-priced homes.
“Stock is tight but we have been busy doing more appraisals for the past four-six weeks so we’re expecting that stock shortage to ease. We are currently marketing a number of high-end properties which have all attracted good numbers at opens.”
Okay. Let’s talk specific projects.
Brisbane West Wellcamp Airport
The airport is having a positive effect on the accessibility of the region both domestically and into Asian markets. It is continuing to expand, with direct passenger flights to Melbourne and Cairns commencing in March. Several agri-based companies are setting up in the surrounding Business Park in order to take their produce directly to Asia. One of these is a baby milk formula factory – the first in Queensland, which will export directly to China.
Second Range Crossing
This new 41km road is important because it will take trucks off city streets, creating a better community amenity, while also enabling a faster trip for freight services. It will create 1,800 full-time jobs. Major construction is underway, with the peak phase expected around mid-2017, so as more workers move in during summer and into 2017, we expect to see weekly rents rise as well.
Grand Central redevelopment
Stage 1 of this massive new shopping centre should be open for Christmas retailing. The redevelopment will include a new dining precinct, department stores, supermarkets and almost 160 other stores.
Railway Parklands Precinct redevelopment
This 50 hectare site will incorporate a central park, shops, commercial and industrial facilities and residential options. The council estimates it will provide up to 3,300 jobs during construction and a further 1,800 jobs in retail and service industries. The developer is currently working with council to finalise the plans.
Now, a final word from Toby:
“We see a very bright future for the town and the region. The airport’s expansion, the Second Range Crossing and the Grand Central extension will be pivotal to growth and employ thousands of workers once operational.
“The next big thing for us is the Melbourne to Brisbane Inland Rail line project, which would make Toowoomba a major logistical hub and bring more jobs and businesses to our region if it proceeds in its current proposed form.
“We feel that now is a fantastic time to buy and get in early before the next stage of growth starts to happen in the region.”
Published in The Switzer Daily by John McGrath; 16th August 2016