Mother nature has left Queensland battered, bruised, but unbowed as a long-term economic recovery appears to be on the horizon
Queensland just can’t seem to get a break. Already reeling from the effects of a surplus of listings in the south-east and a big drop in the tourist dollar state-wide, January’s floods in the centre and south were quickly followed up by February’s cyclone in the north.
Thankfully, tropical cyclone Yasi – despite its terrifying size – didn’t match the scale of death and destruction caused by the floods, but back-to-back natural disasters have left the sunshine state with a hefty clean-up bill.
Early estimates suggested that cyclone Yasi’s effects could have dented the Queensland agriculture sector alone by $1bn, with infrastructure and rebuilding costs set to add to the overall cost. Add this to the estimated $16.87bn that will be required to fund the state’s post-flood recovery, and the economic impact of mother nature’s wrath is quite staggering.
So what does this all mean for the property market? APM senior economist Andrew Wilson believes that south-east Queensland was due to shake-off its oversupply woes and see something of a recovery this year. Post-floods, he’s still confident that the south-east’s property market will pick up – but that growth will now most likely be put on hold until next year.
“There were a number of factors which held Brisbane back, including the high dollar affecting tourism and a reduction in population growth to below 2%. The Gold Coast and Sunshine Coast were quiet too, with the Gold Coast probably being worst affected: there was a lot of building there and supply moved ahead which led to a downturn in sentiment,” he says.
“We felt that the exposure to the resources sector would see Queensland pick up, with early signs of that happening in the third and fourth quarter of last year. However, that’s now pretty much on hold thanks to the floods.”
The estimated cost to the mining industry has been set at the $2.5bn mark, and as the mining industry rebuilds, so too will those cyclone-affected areas whose property markets were tipped to benefit from the predicted coal mining boom. Townsville, for example, had been backed by Wilson to see an increased demand for property, but cyclone Yasi’s damage will further delay any mining-related property market upswing.
Wilson, however, remains bullish in the cyclone’s wake. “I think that – with all credence to the seriousness of the effects there – those areas will recover and, at worst, the delay will push back activity by around three months. At this stage, if nothing else happens, I think that those areas will continue to be bright spots in the medium term given their proximity to the resources sector and the fact that they are less exposed, being communities to the tourism industry, than areas to the south and north.”
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