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Rebalancing the Queensland Economy | 22 May 2014
REBALANCING THE QUEENSLAND ECONOMY
Presented by Brian Haratsis
Thursday 2...
Rebalancing the Queensland Economy | 22 May 2014
Give us a call if you have any questions…
MacroPlan Dimasi is Australia’s...
Rebalancing the Queensland Economy | 22 May 2014
Contents
 Demographics
 Economics
 Resources
 Agriculture
 Ageing
 ...
Rebalancing the Queensland Economy | 22 May 2014
The rebalancing megatrends
 Demographics – NOM vs. NIM
 Business Invest...
Rebalancing the Queensland Economy | 22 May 2014
The rebalancing megatrends
 Workers vs. dependents
 Tourism – internati...
Rebalancing the Queensland Economy | 22 May 2014
Demographics | population growth
Source: ABS Cat 3101
Rebalancing the Queensland Economy | 22 May 2014
Demographics
Rebalancing the Queensland Economy | 22 May 2014
Interstate Migration | Queensland
-5,000
0
5,000
10,000
15,000
20,000
25,...
Rebalancing the Queensland Economy | 22 May 2014
Overseas Migration | Queensland
-10,000
0
10,000
20,000
30,000
40,000
50,...
Rebalancing the Queensland Economy | 22 May 2014
Demographics – labour markets
Rebalancing the Queensland Economy | 22 May 2014
Economics
Rebalancing the Queensland Economy | 22 May 2014
Economics – tourism
Rebalancing the Queensland Economy | 22 May 2014
Economics
Source:QldGovernmentStatistician’soffice,Qld
Treasury&Trade
Mar...
Rebalancing the Queensland Economy | 22 May 2014
Economics – household sector
X Factor
Rebalancing the Queensland Economy | 22 May 2014
Economics – high debt Post GFC Target
Rebalancing the Queensland Economy | 22 May 2014
Economics – house price arbitrage
Rebalancing the Queensland Economy | 22 May 2014
Economics – business sector
Rebalancing the Queensland Economy | 22 May 2014
Economics – business sector
Rebalancing the Queensland Economy | 22 May 2014
Economics – industry
Rebalancing the Queensland Economy | 22 May 2014
Economics – commodity prices
Rebalancing the Queensland Economy | 22 May 2014
Economics – balance of payments & external
position
Rebalancing the Queensland Economy | 22 May 2014
Location of
Australia’s Gas
Resources and
Infrastructure
Resources
Rebalancing the Queensland Economy | 22 May 2014
Resources
Outlook to
2023 – Eastern
Australian Gas
Market
Rebalancing the Queensland Economy | 22 May 2014
Resources
Short term gas market projections
Rebalancing the Queensland Economy | 22 May 2014
Resources
Short term gas supply projections
Rebalancing the Queensland Economy | 22 May 2014
Resources
Number of Advanced Projects
Rebalancing the Queensland Economy | 22 May 2014
Agriculture
 The Queensland government has a 2040 vision for the
agricul...
Rebalancing the Queensland Economy | 22 May 2014
Agriculture
Qld volume of
agriculture output
in 1981-82 dollars
Source: Q...
Rebalancing the Queensland Economy | 22 May 2014
Agriculture
Pathways to double
agricultural
production
Source: Qld’s agri...
Rebalancing the Queensland Economy | 22 May 2014
Ageing
 Between the past 40 years and the next 40 years, the
number of p...
Rebalancing the Queensland Economy | 22 May 2014
Ageing
Growth in dependency ratio driven by migration
programs of
1970s t...
Rebalancing the Queensland Economy | 22 May 2014
Ageing
Retirement living vs. retirement villages
 Only 6-8% of
the marke...
Rebalancing the Queensland Economy | 22 May 2014
Ageing
1
23
4
Demand for
retirement
living dwellings
– future demand.
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-...
Rebalancing the Queensland Economy | 22 May 2014
Budget and Cycles
 Federal
 Headline Numbers
 GDP: $1,567 Billion (Cha...
Rebalancing the Queensland Economy | 22 May 2014
Budget and Cycles
 Federal
 Key Themes
 Business Sector
 Infrastructu...
Rebalancing the Queensland Economy | 22 May 2014
Cycles
 Over the last 20 years QLD has experienced high
volatility in gr...
Rebalancing the Queensland Economy | 22 May 2014
Australian GDP Growth Cyclicality
-1%
0%
1%
2%
3%
4%
5%
6%
0
200,000
400,...
Rebalancing the Queensland Economy | 22 May 2014
Population Cycles – net migration
Rebalancing the Queensland Economy | 22 May 2014
The Cyclical Economy
0
2
4
6
8
10
12
14
16
Aug-1990
Mar-1991
Oct-1991
May...
Rebalancing the Queensland Economy | 22 May 2014
The Current Bust Cycle in Qld has bottomed
 ↑GSP
 ↑ Labour Force
 ↑ Pr...
Rebalancing the Queensland Economy | 22 May 2014
Queensland GSP Growth
0%
1%
2%
3%
4%
5%
6%
7%
8%
%GSPGrowth
Real GSP Budg...
Rebalancing the Queensland Economy | 22 May 2014
Building Approvals - Queensland
Rebalancing the Queensland Economy | 22 May 2014
2.2%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
0
5,000
10,000
15,000
20,000
25,000
30...
Rebalancing the Queensland Economy | 22 May 2014
17.2%
0%
5%
10%
15%
20%
25%
0
5,000
10,000
15,000
20,000
25,000
30,000
35...
Rebalancing the Queensland Economy | 22 May 2014
National Dwelling Prices – March Qtr 2014
35% Arbitrage – 40% Brisbane ($...
Rebalancing the Queensland Economy | 22 May 2014
Median Housing Sale Price - Qld
Rebalancing the Queensland Economy | 22 May 2014
Median Rent of Lodgements - Qld
$/week
Rebalancing the Queensland Economy | 22 May 2014
House Sales – volumes - Qld
Rebalancing the Queensland Economy | 22 May 2014
Unit Sale Volumes - Qld
Rebalancing the Queensland Economy | 22 May 2014
Queensland Snapshot – May 2014
Source: ABS Cat. 3101, 3218, 6345, 6401, 6...
Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Two key themes.
1. Resour...
Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Tipping Point
The tipping...
Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Looking to 2016 | initial...
Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Looking to 2016 | initial...
Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Brisbane
 Retail floorsp...
Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Brisbane
 Residential :
...
Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Brisbane
 Office :
 Ove...
Rebalancing the Queensland Economy | 22 May 2014
Implications for Real Estate and Construction
 Brisbane
 Tourism :
 Do...
Rebalancing the Queensland Economy | 22 May 2014
X Factors
 Federal and State balanced budgets 2017/18
 G20
 Commonweal...
Rebalancing the Queensland Economy | 22 May 2014
X Factors
 Toowoomba Second Range Crossing
 Toowoomba Airport
 Resourc...
Rebalancing the Queensland Economy | 22 May 2014
Eastern Seaboard / Global Context
 Fast growth in Melbourne and Sydney (...
Rebalancing the Queensland Economy | 22 May 2014
Eastern Seaboard / Global Context
 3% Australian GDP
 2% + population g...
Rebalancing the Queensland Economy | 22 May 2014
Opportunities
 Urban Planning | deregulation
 Unlocking the value of th...
Rebalancing the Queensland Economy | 22 May 2014
Opportunities
 Gold Coast Revival | recreational boating
 Toowoomba | n...
Rebalancing the Queensland Economy | 22 May 2014
Thank you.
MacroPlan Dimasi is Australia’s first choice when seeking solu...
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Understanding the future of Queensland's Real Estate and Construction Industry

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Understanding the future of Queensland's Real Estate and Construction Industry

  1. 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. 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. 3. Rebalancing the Queensland Economy | 22 May 2014 Contents  Demographics  Economics  Resources  Agriculture  Ageing  Budget and Cycles
  4. 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. 5. Rebalancing the Queensland Economy | 22 May 2014 The rebalancing megatrends  Workers vs. dependents  Tourism – international vs. domestic tourism  Queensland vs. eastern seaboard
  6. 6. Rebalancing the Queensland Economy | 22 May 2014 Demographics | population growth Source: ABS Cat 3101
  7. 7. Rebalancing the Queensland Economy | 22 May 2014 Demographics
  8. 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. 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. 10. Rebalancing the Queensland Economy | 22 May 2014 Demographics – labour markets
  11. 11. Rebalancing the Queensland Economy | 22 May 2014 Economics
  12. 12. Rebalancing the Queensland Economy | 22 May 2014 Economics – tourism
  13. 13. Rebalancing the Queensland Economy | 22 May 2014 Economics Source:QldGovernmentStatistician’soffice,Qld Treasury&Trade March Quarter 2013 March Quarter 2014 TIPPING POINT
  14. 14. Rebalancing the Queensland Economy | 22 May 2014 Economics – household sector X Factor
  15. 15. Rebalancing the Queensland Economy | 22 May 2014 Economics – high debt Post GFC Target
  16. 16. Rebalancing the Queensland Economy | 22 May 2014 Economics – house price arbitrage
  17. 17. Rebalancing the Queensland Economy | 22 May 2014 Economics – business sector
  18. 18. Rebalancing the Queensland Economy | 22 May 2014 Economics – business sector
  19. 19. Rebalancing the Queensland Economy | 22 May 2014 Economics – industry
  20. 20. Rebalancing the Queensland Economy | 22 May 2014 Economics – commodity prices
  21. 21. Rebalancing the Queensland Economy | 22 May 2014 Economics – balance of payments & external position
  22. 22. Rebalancing the Queensland Economy | 22 May 2014 Location of Australia’s Gas Resources and Infrastructure Resources
  23. 23. Rebalancing the Queensland Economy | 22 May 2014 Resources Outlook to 2023 – Eastern Australian Gas Market
  24. 24. Rebalancing the Queensland Economy | 22 May 2014 Resources Short term gas market projections
  25. 25. Rebalancing the Queensland Economy | 22 May 2014 Resources Short term gas supply projections
  26. 26. Rebalancing the Queensland Economy | 22 May 2014 Resources Number of Advanced Projects
  27. 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. 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. 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. 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. 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. 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. 33. Rebalancing the Queensland Economy | 22 May 2014 Ageing 1 23 4 Demand for retirement living dwellings – future demand.
  34. 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. 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. 36. Rebalancing the Queensland Economy | 22 May 2014 Budget and Cycles  Federal  Key Themes  Business Sector  Infrastructure  Mining  Tourism  Service Sector (Health + Education)
  37. 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. 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. 39. Rebalancing the Queensland Economy | 22 May 2014 Population Cycles – net migration
  40. 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. 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. 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. 43. Rebalancing the Queensland Economy | 22 May 2014 Building Approvals - Queensland
  44. 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. 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. 46. Rebalancing the Queensland Economy | 22 May 2014 National Dwelling Prices – March Qtr 2014 35% Arbitrage – 40% Brisbane ($450k) / Sydney $750k)
  47. 47. Rebalancing the Queensland Economy | 22 May 2014 Median Housing Sale Price - Qld
  48. 48. Rebalancing the Queensland Economy | 22 May 2014 Median Rent of Lodgements - Qld $/week
  49. 49. Rebalancing the Queensland Economy | 22 May 2014 House Sales – volumes - Qld
  50. 50. Rebalancing the Queensland Economy | 22 May 2014 Unit Sale Volumes - Qld
  51. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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

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