The story in the regions also supports the intrastate two-speed economy theory.
Bill Morris points out that the reinvigoration of coal mining is promoting growth in areas such as Chinchilla, Dalby and Toowoomba. Molloy agrees. “The potential impact of the development of LNG in Gladstone
is underpinning that region’s market,” he comments.
“A solid performer over the past year has been Toowoomba, with a median house price increase of 7.6% to $289,500. The region continues to offer some of the most affordable housing around.”
However, other regional areas that depend on Queensland’s ailing tourism industry are
suffering. Cairns has been particularly badly affected, says Morris. “Properties in Cairns have lost huge amounts of value over the last year – around 10% on average,” he says.
“The presence of the Great Barrier Reef is both a blessing and a curse: while it drives tourism in the good times, it also means that accessing natural resources simply isn’t an option for that area.”
Morris argues that increased investment in tourism from the state government – particularly in terms of promotion both interstate and overseas – would arrest the industry’s decline. In the meantime, he advises investors to follow the labour force to the mining towns, especially if they seek cash flow.
“Rental yields are certainly higher – you’re looking at opportunities for returns of 8% compared to 3-4% in the metropolitan areas. However, long-term gains are more difficult to predict, as they’re dependent on commodity prices – which can change rapidly. There are opportunities in the regions – but make sure you are aware of the risks,” he says.
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