What regions are Millennials moving to?
The March quarter saw migration into regional centres from capital cities increase by 16.6 per cent, with this trend lar...
The volatile property market in Queensland’s Moranbah could be set to bounce back, according to a recent report.
A report commissioned for the new Matson Apartments project said while a perfect storm of events had impacted the mining town’s property market over the last two years, the market appeared to be “reaching its floor” and setting itself up for the next boom.
Despite the market decline, LJ Hooker Mackay principal Michael Rossiter said at the time that the market would recover, largely assited by mining companies’ spending on major infrastructure projects in the area.
“[The mining companies] wouldn’t be spending that money on infrastructure if they didn’t think the mineral industry was going to bounce back,” he said in February 2013.
“At the end of the quarter, or early next quarter, you’ll see a remarkable increase, a remarkable recovery.”
The recent report by Matson Apartments concedes the area has experienced difficult times over the past two years, but contends growth is on the horizon.
“The Moranbah property market is poised for its next boom, with over $17.2 million in major infrastructure projects planned and $5.6 billion of these approved within a 60-kilometre radius of the township,” the report said.
“While Moranbah has faced a range of challenges in the last two years – including industrial strikes, extraordinary rainfall events, a ‘rental freeze’ by a major employer, a substantial drop in coal prices leading to large scale redundancies and a sea change of locals moving out of town – there are signs the market is turning, as nearby coal mines return to full production and new mining projects start construction.”
The report said the Bowen Basin town contained Australia’s largest coking coal reserves, and the mass urbanisation of China and India was driving demand for coking coal for the production of steel.
“Despite recent weakness in the coal industry, worldwide demand for metallurgical coal is expected to rise by approximately 20 per cent by 2018 – essentially securing the economic future of Moranbah,” it said.
Omega Investments principal Flynn De Freitas said major coking coal projects included the proposed Mine, which would employ 3,000 contractors during peak construction and up to 1,500 workers and contractors. Half a billion dollars’ worth of liquefied natural gas (LNG) projects were also in the pipeline, he said.
“Moranbah’s economic future is looking brighter than ever,” Mr De Freitas said.
“This large number of new mining projects in the Moranbah region is underpinning strong population growth forecasts, with over a 45 per cent increase in the town’s population expected in the five years to 2018.
“Specifically, an average five-year, annual population growth rate of 2.8 per cent that is more than 50 per cent higher than the state average is expected to see demand for 265 new dwellings per annum between 2013 and 2018.”
Matson Apartments’ developer Don Moffatt from Moffatt Property Development Group said Moranbah was a “misunderstood town” that had not yet reached its full potential.
“With its high quality, large reserves and easily accessible resources, Moranbah still has years of investment in new and expansion projects, and decades of mining ahead,” he said.
“On the back of the ongoing demand for resources and new and expanded projects, Moranbah will continue to play host to the many hundreds of mining, construction, and support workers and their families for years to come.”
Not all experts are as bullish about Moranbah’s prospects for investors though. Positive Real Estate’s Sam Saggers said investors still needed to tread carefully.
“I don’t like single industry economies, of which Moranbah is one,” Mr Saggers told Smart Property Investment. “These areas are prone to boom and bust way too much. I definitely believe it’s a no-go zone for superannuation funds investing in property.
“As for novice investors, I believe capital city investments are more sensible. Moranbah will always be hot and cold, so investors need to be savvy to play in that space.
“Look at the last 20 year trend of Moranbah, you may just see for yourself that there has been growth in the market that has been unsustainable and resulted in huge peaks but also big lows.”