This document summarizes a presentation given on May 22, 2014 about rebalancing the Queensland economy. It discusses demographic trends including population growth, migration, and aging. It also covers economic indicators such as tourism, commodity prices, and industry growth. Implications for real estate and construction are that resources investment will persist longer than expected and statewide growth will occur by 2016-2017, leading to increased demand for residential, retail, and infrastructure development.

1. Rebalancing the Queensland Economy | 22 May 2014
REBALANCING THE QUEENSLAND ECONOMY
Presented by Brian Haratsis
Thursday 22 May 2014
Understanding the future of Queensland’s Real Estate
and Construction Industry

2. Rebalancing the Queensland Economy | 22 May 2014
Give us a call if you have any questions…
MacroPlan Dimasi is Australia’s first choice when seeking solutions which add value to
important property, planning and economic development projects.
We welcome the opportunity to discuss with you, key market trends as they relate to
your business and sector. If you have any questions regarding any of the data provided
in this presentation please feel free to give us a call.
Brian Haratsis – Executive Chairman, 03 9600 0500 or haratsis@macroplan.com.au
Joel Taylor – General Manager Queensland, 07 3221 8166 or taylor@macroplan.com.au

3. Rebalancing the Queensland Economy | 22 May 2014
Contents
 Demographics
 Economics
 Resources
 Agriculture
 Ageing
 Budget and Cycles

4. Rebalancing the Queensland Economy | 22 May 2014
The rebalancing megatrends
 Demographics – NOM vs. NIM
 Business Investment – mining vs. non-mining
 Emerging vs. declining regions
 SEQ vs. regions
 Budgets vs. economic cycles

5. Rebalancing the Queensland Economy | 22 May 2014
The rebalancing megatrends
 Workers vs. dependents
 Tourism – international vs. domestic tourism
 Queensland vs. eastern seaboard

6. Rebalancing the Queensland Economy | 22 May 2014
Demographics | population growth
Source: ABS Cat 3101

7. Rebalancing the Queensland Economy | 22 May 2014
Demographics

8. Rebalancing the Queensland Economy | 22 May 2014
Interstate Migration | Queensland
-5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
0-14 15-24 25-34 35-54 55-64 65+
Source: Australian Bureau of Statistics

9. Rebalancing the Queensland Economy | 22 May 2014
Overseas Migration | Queensland
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
0-14 15-24 25-34 35-54 55-64 65+
Source: Australian Bureau of Statistics

10. Rebalancing the Queensland Economy | 22 May 2014
Demographics – labour markets

11. Rebalancing the Queensland Economy | 22 May 2014
Economics

12. Rebalancing the Queensland Economy | 22 May 2014
Economics – tourism

13. Rebalancing the Queensland Economy | 22 May 2014
Economics
Source:QldGovernmentStatistician’soffice,Qld
Treasury&Trade
March Quarter 2013 March Quarter 2014
TIPPING POINT

14. Rebalancing the Queensland Economy | 22 May 2014
Economics – household sector
X Factor

15. Rebalancing the Queensland Economy | 22 May 2014
Economics – high debt Post GFC Target

16. Rebalancing the Queensland Economy | 22 May 2014
Economics – house price arbitrage

17. Rebalancing the Queensland Economy | 22 May 2014
Economics – business sector

18. Rebalancing the Queensland Economy | 22 May 2014
Economics – business sector

19. Rebalancing the Queensland Economy | 22 May 2014
Economics – industry

20. Rebalancing the Queensland Economy | 22 May 2014
Economics – commodity prices

21. Rebalancing the Queensland Economy | 22 May 2014
Economics – balance of payments & external
position

22. Rebalancing the Queensland Economy | 22 May 2014
Location of
Australia’s Gas
Resources and
Infrastructure
Resources

23. Rebalancing the Queensland Economy | 22 May 2014
Resources
Outlook to
2023 – Eastern
Australian Gas
Market

24. Rebalancing the Queensland Economy | 22 May 2014
Resources
Short term gas market projections

25. Rebalancing the Queensland Economy | 22 May 2014
Resources
Short term gas supply projections

26. Rebalancing the Queensland Economy | 22 May 2014
Resources
Number of Advanced Projects

27. Rebalancing the Queensland Economy | 22 May 2014
Agriculture
 The Queensland government has a 2040 vision for the
agriculture, fisheries and forestry industries. It will work
with all stakeholders to address four key pathways:
 Securing and increasing resource availability
 Driving productivity growth across the supply chain
 Securing and increasing market access
 Minimising the costs of production

28. Rebalancing the Queensland Economy | 22 May 2014
Agriculture
Qld volume of
agriculture output
in 1981-82 dollars
Source: Qld’s agriculture strategy | A 2040 vision to double agricultural production

29. Rebalancing the Queensland Economy | 22 May 2014
Agriculture
Pathways to double
agricultural
production
Source: Qld’s agriculture strategy | A 2040 vision to double agricultural production

30. Rebalancing the Queensland Economy | 22 May 2014
Ageing
 Between the past 40 years and the next 40 years, the
number of persons aged
65 years and over
increases dramatically.
 The aged dependency
ratio doubles.

31. Rebalancing the Queensland Economy | 22 May 2014
Ageing
Growth in dependency ratio driven by migration
programs of
1970s to 2000.
Now at 1%

32. Rebalancing the Queensland Economy | 22 May 2014
Ageing
Retirement living vs. retirement villages
 Only 6-8% of
the market
live in
retirement
villages.
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Perth Adelaide Brisbane Capital City
Average
Sydney Melbourne
RetirementVillagePenetrationRate
MediumandHighDensityDwellingShare
Retirement Village Penetration Rate vs Medium and High Density Dwelling Share,
Capital Cities
Share of Medium/High Density Dwellings Retirement Village Penetration Rate

33. Rebalancing the Queensland Economy | 22 May 2014
Ageing
1
23
4
Demand for
retirement
living dwellings
– future demand.

34. Rebalancing the Queensland Economy | 22 May 2014
Ageing
5%
6%
7%
8%
9%
10%
11%
12%
Sep-97
Feb-98
Jul-98
Dec-98
May-99
Oct-99
Mar-00
Aug-00
Jan-01
Jun-01
Nov-01
Apr-02
Sep-02
Feb-03
Jul-03
Dec-03
May-04
Oct-04
Mar-05
Aug-05
Jan-06
Jun-06
Nov-06
Apr-07
Sep-07
Feb-08
Jul-08
Dec-08
May-09
Oct-09
Mar-10
LabourForceParticipationRate
Participation Rate in the Labour Force, People Aged 65+, Queensland
More people 65+ are working

35. Rebalancing the Queensland Economy | 22 May 2014
Budget and Cycles
 Federal
 Headline Numbers
 GDP: $1,567 Billion (Chain Volume Measures)
 RBA Target Cash Rate: 2.5%
 Total Budget Spend: $415.7bn
 Budget Spend per cent of GDP: 25.4%
Major Impact : Interest rates on hold.  Confidence.

36. Rebalancing the Queensland Economy | 22 May 2014
Budget and Cycles
 Federal
 Key Themes
 Business Sector
 Infrastructure
 Mining
 Tourism
 Service Sector (Health + Education)

37. Rebalancing the Queensland Economy | 22 May 2014
Cycles
 Over the last 20 years QLD has experienced high
volatility in growth and development due to national
and local economic cycles driving:
 Interest Rates
 Business Investment
 House and Land Prices
 Immigration
 Gross State Product and
 wealth

38. Rebalancing the Queensland Economy | 22 May 2014
Australian GDP Growth Cyclicality
-1%
0%
1%
2%
3%
4%
5%
6%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
GDP (LHS) GDP Growth (RHS)

39. Rebalancing the Queensland Economy | 22 May 2014
Population Cycles – net migration

40. Rebalancing the Queensland Economy | 22 May 2014
The Cyclical Economy
0
2
4
6
8
10
12
14
16
Aug-1990
Mar-1991
Oct-1991
May-1992
Dec-1992
Jul-1993
Feb-1994
Sep-1994
Apr-1995
Nov-1995
Jun-1996
Jan-1997
Aug-1997
Mar-1998
Oct-1998
May-1999
Dec-1999
Jul-2000
Feb-2001
Sep-2001
Apr-2002
Nov-2002
Jun-2003
Jan-2004
Aug-2004
Mar-2005
Oct-2005
May-2006
Dec-2006
Jul-2007
Feb-2008
Sep-2008
Apr-2009
Nov-2009
Jun-2010
Jan-2011
Aug-2011
Mar-2012
Oct-2012
May-2013
Dec-2013
%
RBA Target Cash Rate

41. Rebalancing the Queensland Economy | 22 May 2014
The Current Bust Cycle in Qld has bottomed
 ↑GSP
 ↑ Labour Force
 ↑ Private Investment
 ↑ Population
 Housing prices at realistic levels

42. Rebalancing the Queensland Economy | 22 May 2014
Queensland GSP Growth
0%
1%
2%
3%
4%
5%
6%
7%
8%
%GSPGrowth
Real GSP Budget Forecast
Forecast

43. Rebalancing the Queensland Economy | 22 May 2014
Building Approvals - Queensland

44. Rebalancing the Queensland Economy | 22 May 2014
2.2%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Growth(%)
DwellingApprovals(No.)
Dwelling Approvals (LHS) MacroPlan Forecast (Dwelling Approvals)
10-year average growth (RHS)
Forecast
Forecast Building Approvals - Queensland

45. Rebalancing the Queensland Economy | 22 May 2014
17.2%
0%
5%
10%
15%
20%
25%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
ShareofDwellingsFInanced(%)
DwellingsFinanced(no.)
Total Dwellings Financed (LHS) First Home Buyer Share (RHS) 10-year average FHB share (%)
Housing finance - Queensland

46. Rebalancing the Queensland Economy | 22 May 2014
National Dwelling Prices – March Qtr 2014
35% Arbitrage – 40% Brisbane ($450k) / Sydney $750k)

47. Rebalancing the Queensland Economy | 22 May 2014
Median Housing Sale Price - Qld

48. Rebalancing the Queensland Economy | 22 May 2014
Median Rent of Lodgements - Qld
$/week

49. Rebalancing the Queensland Economy | 22 May 2014
House Sales – volumes - Qld

50. Rebalancing the Queensland Economy | 22 May 2014
Unit Sale Volumes - Qld

51. Rebalancing the Queensland Economy | 22 May 2014
Queensland Snapshot – May 2014
Source: ABS Cat. 3101, 3218, 6345, 6401, 6202,
6414, 8510, 8731, 9314 & Tourism Research
Australia

52. Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Two key themes.
1. Resources investment likely to persist longer than
expected.
2. Synchronised State level economic growth likely by 2016/17
with initial growth in 2014/15.

53. Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Tipping Point
The tipping point occurred in the December 2013 / March
2014 quarters when employment growth outstripped the
national average, population growth at $1.8% shifted back
towards 2% and retail expenditure shifted in line with
Melbourne and Sydney.

54. Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Looking to 2016 | initial economic transition
 Low interest rates (<3% cash rate)
 Moderate inflation (2.5% – 3.0%)
 Fast population growth (2% or 100,000 per annum)
 Resource exports 100%

55. Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Looking to 2016 | initial economic transition
 Public infrastructure expenditure  10% per annum
 25% non-resource investment 
 25% (significant job impact)
 Population driven services (e.g. retail, health, education)
 employment at 2% per annum.

56. Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Brisbane
 Retail floorspace investment  significantly
 Residential :
 Multi-Unit
 CBD  /
 Non CBD 

57. Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Brisbane
 Residential :
 Detached dwellings 
 Tightening land supply
 Investment housing 25% - 35% stock /  Rental demand.

58. Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Brisbane
 Office :
 Over-supply in CBD / service sector employment and
growth post 2016/17
 Under-supply outside CBD

59. Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Brisbane
 Tourism :
 Domestic tourism 1% per annum growth
 International tourism 4% per annum growth (max)
 New Brisbane casino and regional
 Freight and Logistics :
 Major investment potential

60. Rebalancing the Queensland Economy | 22 May 2014
X Factors
 Federal and State balanced budgets 2017/18
 G20
 Commonwealth Games – 2018
 Brisbane Airport second runway – 2020 ( visitations)
 Broadwater Cruise Ship Terminal – 2018
 Broadwater Casino / Hotels / Wavebreak Island – 2018-2025
 Chinese Tourist Potential
 Inland Rail – Brisbane / Toowoomba

61. Rebalancing the Queensland Economy | 22 May 2014
X Factors
 Toowoomba Second Range Crossing
 Toowoomba Airport
 Resource Exports  150% by 2020
 Agricultural Exports  50% by 2020
 Government expenditure  /  public sector employment
 Housing price arbitrage (Sydney) – post 2015   NIM
 Chinese / US / Japanese investment returns to Qld

62. Rebalancing the Queensland Economy | 22 May 2014
Eastern Seaboard / Global Context
 Fast growth in Melbourne and Sydney (demographic +
economic) ALWAYS results in downstream Qld impact.
 From 2014 to 2019 Sydney / Melbourne / Brisbane will
increase population by 1.4m people.
 With stable and consistent Federal governance,
synchronised growth (except tourism) is likely to occur in
Queensland post 2016 – as follows…

63. Rebalancing the Queensland Economy | 22 May 2014
Eastern Seaboard / Global Context
 3% Australian GDP
 2% + population growth
 4% GSP
 Growth in key export sectors – resources/agriculture
 State and local government employment growth
 Return to Brisbane of national services sector (10 years post
GFC)
 Major infrastructure expenditure (PPPs)

64. Rebalancing the Queensland Economy | 22 May 2014
Opportunities
 Urban Planning | deregulation
 Unlocking the value of the middle ring
 Tourism | new strategy and product
 Freight and Logistics | resources / agriculture
 Global Services Sectors | resources / agriculture / freight
and logistics

65. Rebalancing the Queensland Economy | 22 May 2014
Opportunities
 Gold Coast Revival | recreational boating
 Toowoomba | national centre for freight and logistics
and centre for resources and agriculture sectors
 Brisbane | synchronised residential / office / retail
 CBD and inner ring

66. Rebalancing the Queensland Economy | 22 May 2014
Thank you.
MacroPlan Dimasi is Australia’s first choice when seeking solutions which add value to
important property, planning and economic development projects.
We welcome the opportunity to discuss with you, key market trends as they relate to
your business and sector. If you have any questions regarding any of the data provided
in this presentation please feel free to give us a call.
Brian Haratsis – Executive Chairman, 03 9600 0500 or haratsis@macroplan.com.au
Joel Taylor – General Manager Queensland, 07 3221 8166 or taylor@macroplan.com.au