Article By Julien Mougenot
Thursday, September 5, 2019

TUDI Market Overview – Gladstone region

Introduction

Cooling market conditions must mean it’s a poor time to invest in real estate, right? Not if you’re privy to the specialised insights you can only get from TUDI.

First up for our TUDI Suburb Briefs is Gladstone, with the coastal Queensland city offering ripe real estate pickings for the savvy home buyer.

TUDI focuses on 4 essential indicators of investment potential:

  • Supply and Demand
  • Rental Vacancies
  • Seller Confidence
  • Timing the Market

To uncover this data, we use our unique property algorithm that combines artificial intelligence, big data and qualitative analysis to predict the next property hotspot. That means with the help of TUDI, you can grow your property portfolio and generate real wealth for you and your family.

With the Gladstone property market showing clear signs of lifting, now is the time to investigate the market and come away with a steal. Read on for our full brief.

Executive summary

The following brief explains TUDI’s deep-dive investigation of the Gladstone region property market over several years, detailing historical and recent trends, as well as leading indicators (Section 3) and major price growth indicators (Section 4). The following sections showcase Boyne Island, a 20-minute drive from Gladstone. But this is just one example. There are a number of other suburbs in the region that are slated to become prime prospects.

Central to these points is the discovery that the region’s median sale price is unlikely to drop any further (-27% to -52% compared to five years ago), which means now is the ideal time to get into the market before an expected upswing.

The region is also displaying clear signs of increased housing demands. With supply down and demand up, investors looking for a potential high-growth opportunity should investigate the area.

Adding to the ‘holy trinity’ of factors that TUDI believes makes Gladstone the ideal investment region right now is rental tenancy rates. Currently below 3%, this is a strong sign that rents will likely rise, leading tenants to look at getting into the market as home owners, and attracting investors who are seeking high rental yield as they expand their portfolios.

Leading factors for Boyne Island

Supply and Demand

Without supply and demand there would be no ‘property market’ – it’s a fundamental element of the buying and selling process.

TUDI research found that for several years leading up to March 2019, supply on Boyne Island consistently outweighed demand, leading to falling property prices. But when March rolled around this year, demand started exceeding supply.

With the Gladstone area’s supply-to-demand ratio quickly trending towards an under-supply market, our recommendation is to start your on-the-ground research now so that you can strike a good deal before the under-supply trend is confirmed.

Rental Vacancies

Rental vacancies are a key indicator of the state of the market because a low vacancy rate means rents will be on the rise. This in turn provides solid rental yield which attracts investors.

After Boyne Island’s rental saturation, which lasted several years, rental vacancies fell below 3% at the start of 2019, eventually dipping to 2.6% in April. With such competition for rental properties, prices have inevitably been increasing ever since.

TUDI research anticipates this rental vacancy will continue to be low, which makes Boyne Island a very attractive prospect for investors. As rental yields go up, the area will attract investors who will compete for real estate, which will ultimately push up property prices.

Seller Confidence

The TUDI seller confidence scale is based on how much vendors are asking for their property compared to current values. Every suburb can be placed on the scale between Low Confidence (prices falling) and High Confidence (prices rising), with Neutral indicating no change.

Mapped over more than four years of data collection for Boyne Island, seller confidence is extremely high, with confidence peaking in December 2018 with a median asking price 38% higher than the median sale price.

Currently at 30% above median sale price, if this confidence continues (or even grows further) then that will put a strong upward trend on property price growth.

Timing the Market

Like any investment, timing is essential to reap the biggest rewards, and it’s no different when it comes to property. Over the past five years, Boyne Island’s median has price has significantly decreased, coming off the back of inflation from the energy boom. However, recently demand has been exceeding supply – if confirmed, this is a clear indication that property prices will soon be on the rise.

Combined with all the other leading indicators, and the fact that the median house price is currently $285,000 (way down from $430,000 in 2015), we recommend that now is the time to get on the ground and start researching the best deals in the area.

Price Growth Indicators

While the above leading indicators show you that trends are changing, they can’t tell you why property prices are expected to go up.

That’s why we’ve been monitoring a range of key projects that will undoubtedly act as growth drivers for the property market.

Perhaps the most important driver is the Queensland Government’s focus on backing jobs in regional areas. At the recent State Budget, more than $1 billion was committed to infrastructure for Central Queensland, supporting around 3,600 local jobs. A few of the biggest projects include:

  • Gladstone Energy and Ammonia – Requiring 800 jobs at peak and beginning construction mid-2020.
  • Renewable Energy Abattoir – Delivering more than 640 jobs and operational by 2021.
  • Rockwood Weir – A $352 million project to improve the region’s water supply, providing a wealth of investment opportunities.
  • Yarwun Waste Water Treatment Plant – Essential upgrades will provide Gladstone and surrounding areas with an efficient and reliable wastewater system while also enabling future expansions for projects sited in the Gladstone State Development Area.

Find Out More

It’s clear that the Gladstone region is experiencing a marked upturn in property price growth after years of decline and stagnation. Thanks to leading indicators and key projects slated to begin in the area over the coming months and years, we recommend that investors should conduct on-the-ground research right now before the expected boom period begins in earnest.

TUDI will launch its website in September which will allow subscribers to use an online tool to identify the next suburb hotspots and take advantage of new market opportunities. TUDI subscribers will be provided with the most accurate insights into property opportunities across more than 5,000 Australian suburbs.

The tool will offer a new way to scan the Australian property market to identify suburbs that will outperform the market, as well as pick the best time to sell. TUDI have partnered with the University of Wollongong, applying new developments in AI and the analysis of key indicators in determining a property boom. On the right side there is a teaser of what it will look like with Boyne Island as an example.

To find out more contact us at info@tudi.com.au or visit our pre-launch website at tudi.com.au.

DISCLAIMER:
The information, data and statements (“content”) in this document only provide a general or indicative summary of its subject matter. The content is not exhaustive and does not and cannot take into account the reader’s own personal circumstances or requirements. The content is provided in good faith in order to assist the reader, but it is not advice, an opinion or a representation that the reader should or may rely on. Any decision or action taken by the reader should be based on his/her own thorough due diligence of all relevant materials and based on the reader’s own skill and judgement (and/or on the skill and judgement of the reader’s advisors). Neither TUDI, nor any of its directors, employees or contractors, make any promise or representation, express or implied, as to the accuracy, reliability or completeness of the content. To the fullest extent permitted by law, TUDI, its directors, employees and contractors, shall have no liability for any loss, cost, damage or expense caused to or suffered by any person or organisation for or in respect of any aspect of the content, including by reason of negligence.