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Economic Growth, Capital Growth

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There are stats and then there are stats…

Last week produced some wonderful stats. The Reserve Bank dropped rates by 0.25%, housing finance approvals increased, and unemployment rates remain low with our national average being 5.1%. Our economy (GDP) also grew by a very credible 4.3%.

While this data creates great headlines, a closer examination of the real data enables us to get a greater appreciation for spotting property investment opportunities. Where can we get the best capital growth?

Let’s start by dissecting the jobs data. Unemployment rates are low however, some states are better than others. Our two most populated states have been laying off high volumes in staff in the finance sector, manufacturing, and government departments. The resource states of WA and Qld on the other hand can’t find enough engineers, boiler makers, and bean counters. Of the 100,000 new full-time jobs created last year WA & Qld contributed 63,000 of them. Take a look at the performance of Victoria’s job market in the above table.

It is no coincidence that the economic growth of each state somewhat mirrors employment trends.

We all need a job. If we’ve lost one, or if we have a much better opportunity somewhere else, we might be tempted to relocate. Refer population data above.

Spotting the next best capital growth location is a science in identifying demand for housing. It’s economics!

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The Science Of Property Investment

Brisbane-based Buyer’s Agent and 2012 Australian Buyer’s Agent of the Year.

Brisbane Property Market Update

Brisbane was the best performing capital city property market for the decade preceding the GFC.

A higher reliance on tourism and a fragile construction industry resulted in fewer employment opportunities in Qld than southern states. The flow on effect was a slow down in population growth, low consumer confidence and reduced demand for housing.

Fast forward to now and the outlook for Brisbane’s property market is looking much more optimistic.

Qld’s capital is destined to benefiit significantly from the “Resources Revolution”. An abundance of coal and gas and our close proximity to Asia will provide Qld with a once in a generation economic boom.

Already we have observed office spaces being soaked up as mining companies set up entire departments within Brisbane to administer sveral $multi-billlion projects. Brisbane’s population is growing again on the back of these employment opportunities. Qld job creation fiigures are second only to WA.  Residential vacancy rates have been tightening. As a reult, rents are rising.

Demand for housing in Brisbane is on the rise again. Housing is very affordable in Brisbane.

22 years of ALP reign ended in March. It will be interesting to see what policies the new “Can Do” Newman Government releases in coming months. We allready know that stamp duty concessions on the family home will be re-introduced from 1 July. We’ve already seen them approve a large bauxite mine (Weipa), port expansion (Bowen), and coal mine (Alpha) within their first 2 months in government. In addition, a $5B revitalisation of Northbank, Brisbane CBD, has been approved.

The outlook for Brisbane is sound.

The key question is “Confidence – How & when will it return?”

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