Resurgent mining towns existing alongside perennially struggling tourist areas is evidence of a still deeply divided market
Airlie Beach is not a place accustomed to unhappiness. There are an average 285 sunny days a year in this international tourist favourite and with its dazzling white sandy beaches and world-class diving sites, some local residents confess to not always knowing what day of the week it is.
But recently Airlie Beach has been having a tough time. Property values have been on a downward slide, posting large-scale falls as far back as 2009.
It’s not the only tourist area rolling in the deep. Nearby Clermont and further up the coast, in Cairns, property values have also struggled, with 12-month falls exceeding -20%.
As this happens, property prices in Mackay, the gateway to the coal mining Bowen Basin region and an hour’s drive from Airlie Beach, are showing signs of recovery. Resource-led investment has brought new life to the market and the Real Estate Institute of Queensland reports December quarter growth of 2.4%.
Other resource-driven centres are also looking strong. REIQ December data shows that Gladstone, a major exporting centre for the coal industry, posted 8.4% growth, while coal producing centre Moranbah saw three-month growth exceed 15%.
These are just some of many illustrations of the two-sided nature of the Queensland property market at the moment. Tourist centres are struggling, resource-driven areas are recovering.
“The data we’re getting is that resource-driven markets are doing particularly well. In some ways, many of these markets may be past bottoming out. In tourist towns, recovery has not been as pronounced,” says REIQ president Anton Kardash.
The recent problems that tourist areas have had to endure are well-known. Floods have been a frequent occurrence over the last two years, and some of the northern parts of the state are still yet to fully recover from damage left by Cyclone Yasi in February last year.
It hasn’t helped that the strength of the Australian dollar has been at record highs, discouraging many international tourists from visiting areas such as Cairns, the Whitsundays area and the Fraser and Sunshine coasts.
However, Kardash believes that this might change. “Data is yet to come in officially, but the anecdotal stories we’re hearing from agents is that there’s been an increase in enquires and activity. Confidence is returning, though it is coming in slowly.”
A look towards China
Perhaps a sign of better things to come was the promise in March of a $50m program to encourage the Queensland tourism industry. This included the allocation of $5m to go into a “China Strategy”, aimed to capture a bigger share of what is arguably the world’s fastest-growing pool of international tourists.
When making this pledge, the-then premier Anna Bligh said the remaining funds from the $50m would be spent on doubling the funding for regional tourism organisations, and setting up a tourism infrastructure fund that would be used to build tourism attractions.
“We want the world to know that visiting Queensland is a once-in-a-lifetime experience, [and] we’re going to work with the industry to bring more people here,” Bligh said.
Kardash believes that if it does happen – and it’s unclear whether the new LNP government will mirror Bligh’s pledge – it would have a positive effect. “There’s been a lot of conversation about the Chinese market and the potential it could have for Queensland, knowing how important the tourism sector is for the state economy and for property values as well. At the moment, however, they’re just promises.”
Brisbane looks after its own
While tourist towns may be looking at foreign shores to rescue their property market, recent Brisbane buying activity has been dominated by local investors.
PRDnationwide research director Aaron Maskrey says that new research shows that 86% of property investors in the city come from inner-city suburbs, and he says that this has far reaching consequences for property owners looking to sell.
“[If you’re] looking to attract investors, consider that the majority of investors prefer to purchase smartly within their own backyard.”