Tourism and Property Trends for Hervey Bay

“Study the past if you would divine the future”

Confucius (550-478BC)

Property Cycles

� The seven year property cycle is apparent in most western capitalist economies such as USA, Canada, UK, NZ and Australia

� The length of the cycle is a function of housing supply, consumer behaviour and financial regulation (not necessarily interest rates!)

� Prices increases usually occur in quantum lifts

Anatomy of a Residential Property Cycle

0

5

10

15

20

25

30

35

40

1 2 3 4 5 6 7

Years

Am

plitu

de

Prices

Sales Volume

Vendors do not accept that boom is over – so they over-price, sales volume falls

Vendors who need to sell finally accept a lower price, some are forced to sell by mortgagee

Production of new allotments and houses nose-dives. Stock becomes depleted until almost exhausted

Demand outweighs supply

Speculative “rush” buying occurs for fear of prices increasing even further. Prices escalate rapidly.

BRISBANE CITY UNIT SALES CYCLE

0

1000

2000

3000

4000

5000

6000

7000

D80

J81

D81

J82

D82

J83

D83

J84

D84

J85

D85

J86

D86

J87

D87

J88

D88

J89

D89

J90

D90

J91

D91

J92

D92

J93

D93

J94

D94

J95

D95

J96

D96

J97

D97

J98

D98

J99

D99

J00

D00

J01

D01

J02

D02

J03

D03

J04

D04

J05

D05

J06

D06

J07

D07

J08

D08

Half Year Ending

Source: Qld Dept of Natural Resources, Midwood QLD Investment Report

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

No. of unit sales

No. of Sales

Average Price $

GOLD COAST HOUSE SALES VS STANDARD VARIABLE HOME LOAN INTEREST RATES

0

1000

2000

3000

4000

5000

6000

7000

Half Year Ending

Source: Qld Dept Natural Resources, RBA

No

. o

f S

ale

s

0

2

4

6

8

10

12

14

16

18

Inte

rest

%

Int Rates %

No. of Sales

HERVEY BAY CITY HISTORICAL HOUSE SALES

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Source: PDSLive

No

. o

f S

ale

s

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Med

ian

Sale

Pri

ce

No. of Sales

Median $

Housing Affordability – Compare the Prices

Source: REIQ

9$310,000Fraser Coast

7$365,000Townsville

6$375,000Cairns

0$380,000Mackay

14$385,000Gladstone

13$395,000Whitsundays

15$495,000Brisbane

10$505,000Gold Coast

23$785,000Noosa

Growth % 07-08

Median House Price Yr to Sept 08Location

New Apartment Selling Prices

Source: Midwood QLD Investment Report

$8,500CaloundraRumba

$7,000Labrador (GC)Coast Marine Parade

$6,900MooloolabaCoco

$6,200MaroochydoreEmporio

$6,200Hollywell (GC)Allisee

$5,800Tweed HeadsSilvertsone

$5,500BroadbeachSurf 120

$5,300Woody PointPoint Plaza

$5,300RedcliffeMarine Cove

$5,000MaroochydoreHorton Apartments

$5,000Labrador (GC)Harmony

$4,700RedcliffeMoreton View

$4,500Hervey BayRamada

Price per sqmLocationProject

Location Location Location!

� The most important attribute of Hervey Bay is that it is one of the few north facing beaches in Queensland

� Easily accessible from its closest capital cities

� Gateway to Fraser Island

� Growing industries in business, tourism and construction

Hervey Bay/MaryboroughPopulation Growth

� In 2006 the population was 83,024 with 5.3% growth over 2005 (the highest amongst Australia’s 70 largest cities)

� As at February 2009 the population was an estimated 90,300

� Projected growth rate at 3.4%pa

� The region is estimated to grow to 100,000 in 2012

Hervey Bay/Maryborough Population Growth

31,831

37,932

43,090

53,849

70,779

27,547

67,259

26,525

83,024

0

5,000

10,000

15,000

20,000

25,000

30,000

1966 1971 1976 1981 1986 1991 1996 2001 2006 2011

Source: Midwood Queensland Investment Report

10,000

100,000

Logarith

mic

Scale

90,300 in Feb 2009

Queensland Population

� In 2006 the population was 4,046,880 with a growth rate of 2.1% over 2001-06

� As at February 2009 the population was an estimated 4,266,000

� Projected growth rate at 2.0%pa

� The state is estimated to grow to 4,496,000 by 2011

QLD Population Growth

1,827,065

1,674,324

2,037,197

2,295,123

2,587,315

3,655,139

2,977,810

3,368,850

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

1966 1971 1976 1981 1986 1991 1996 2001 2006 2011Census Year

1,000,000

10,000,000

Source: Midwood QLD Investment ReportL

og

ari

thm

ic S

ca

le

4,046,880

4,266,000 in Feb 2009

Tourism Trends

� Tourism into Hervey Bay has skyrocketed since the airport expansion was completed in 2005

� Air passenger movements have increased by 25.5%pa since 2000 and at 79%pa over the past three years

� Direct regular weekly flights from Sydney by Qantas Link, Jetstar & Virgin are now operational

� Connections from Melbourne are imminent

Total Passenger Movements - Hervey Bay Airport

0

50000

100000

150000

200000

250000

1999/2

000

2000/2

001

2001/2

002

2002/2

003

2003/2

004

2004/2

005

2005/2

006

2006/2

007

2007/2

008

Source: Hervey Bay City Council

Hervey Bay/Maryborough Accommodation Statistics

Source: ABS 8635.3.55.001

5%5%0%-3%3%2%% chg

$102.3511.6113,34859.76,7252,064Sep-08 Qtr

$97.6611.1113,89961.56,5482,014Sep-07 Qtr

Total

0%6%6%-3%7%9%% chg

$127.365.644,09556.13,042855Sep-08 Qtr

$127.705.341,58757.82,846782Sep-07 Qtr

Serviced Apts

8%5%-3%-3%0%-1%% chg

$81.064.048,90765.62,418810Sep-08 Qtr

$74.933.850,58767.52,411815Sep-07 Qtr

Motels

7%0%-6%-2%-2%-4%% chg

$99.332.020,34655.61,265399Sep-08 Qtr

$93.092.021,72556.81,291417Sep-07 Qtr

Hotels

Rates per nightTakings ($m)Nights SoldOccupancy (%)Bed SpacesRooms Avail

Discretionary Spending Growth

� Apart from tourist numbers, the tax paying population has increased at the rate of 5.6%pa between 1997-2003

� This means that spending growth is not just reliant upon retirees

Hervey Bay/Marybrough Half Yearly Dwelling Approvals

0

200

400

600

800

1,000

'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 08

Source: ABS 8731.0

Units

Houses

7 Year Av Total

Website: www.midwoodaustralia.com

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