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Modeling the future economic, population and housing impacts of developments in Gladstone and Central Queensland John Rolfe CQUniversity.

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Presentation on theme: "Modeling the future economic, population and housing impacts of developments in Gladstone and Central Queensland John Rolfe CQUniversity."— Presentation transcript:

1 Modeling the future economic, population and housing impacts of developments in Gladstone and Central Queensland John Rolfe CQUniversity

2 Focus of talk Understand and model the key drivers for population growth in Gladstone Model the potential impacts on housing markets Extend the analysis to central Queensland

3 Predicting impacts on housing prices Looked at housing price changes in three main ways A. Extrapolated price trends over past decade into the future B. Related past price changes to population growth and extrapolated to future C. Related past price change to growth shock

4 A. Extrapolating previous trends Extrapolation of previous models indicates that median house prices will increase by $35,000 per annum to about $660,000 in 2018

5 B. Extrapolate past relationship to future population growth Regressed change in house prices against population growth over past decade Extrapolation to new population growth suggests price growth by 2018 to >$800,000 for Scenario C

6 C. Price impacts ratio approach: Short term spikes The Rio Tinto Yarwun Refinery located in Gladstone is identified as a similar project in terms of its nature and location The refinery was commissioned in late 2004, with the first full year of operation in The project employed 431 permanent operational staff with the majority housed in Gladstone during its first year of operation The impact the Yarwun refinery had on property values in Gladstone will be used in this analysis to estimate the likely impact on property values of the major projects

7 Are predicted price increases modest or high? Models predict prices will double in 8 years – and there may be shorter term price spikes Consistent with pattern in past decade Predicted increases are large enough to cause pain and impacts But are not at the scale that mining towns in the Bowen Basin are experiencing And trends consistent with growth in past decade

8 Housing prices in central Queensland – up by 2.8 times in 8 years

9 Growth forecasts for Central Queensland Qld Govt population growth forecasts are very strong

10 Currently more than 100 significant projects underway or planned in CQ

11 Predicting population changes - optimistic Assumptions about workforce moving to local areas: – Central Highlands: 50% – Barcaldine: 10% – Isaac: 30% – Gladstone: 80% Assumptions about location of FIFO workers – Rockhampton: 25% – Mackay: 25% – Bundaberg: 10% – Outside CQ: 40%

12 Summary of broad predictions Annual Pop. increase Annual change in median house prices Gladstone3,133$34,922 Rockhampton2,255$31,738 Mackay6,138$60,883 These predictions indicate that: Gladstone’s rate of population increase will be about double the previous decade (1,622 per year) Rockhampton’s population increase will be slightly higher than the previous decade (1,901 per year) Mackay’s population increase will be about double the previous decade (3,128 per year)

13 Conclusions Rapid growth in Central Qld is generating employment, with subsequent population and housing effects Simple models used to make broad forecasts – but will be inaccurate Gladstone population predicted to increase between 10,000 and 25,000 by 2018, depending on scale of industry development Gladstone median house prices predicted to increase to between $604,000 and $928,000 Higher price increases predicted in Mackay, and lower increases in Rockhampton


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