Market Drivers

Alongside the region’s reputation for natural beauty is its status as a major driver of the Queensland economy. The Queensland government and private enterprise are pushing hard to make the city a genuine competitor to Western Australia on coal seam gas (CSG) and its potential to be converted to Liquefied Natural Gas (LNG).

An estimated $77 billion worth of resource projects are either currently in the planning stage or under construction, in addition to more than $5 billion in infrastructure projects. With this amount of ongoing investment and its close proximity to international markets, the Gladstone property market is expected to be one of Australia’s strongest performing markets.

Despite the recent downturn witnessed from the Global Financial Crisis, Gladstone’s major LNG projects are seen as the brightest option for future regional growth. Global LNG demand is expected to continue to grow rapidly over the next decade due to the increasing industrialisation of Asia and the desire by major world authorities to improve air quality by reducing greenhouse gas emissions.

Gladstone Property Market

Unlike many resource driven towns, where the booming resource industry has led to soaring property prices, Gladstone’s rental and housing prices are comparatively low. Resources based towns across Australia, which have a very strong construction pipeline, often have median housing prices and rental levels well above that of their respective capital cities. However, as Gladstone’s largest projects are yet to commence, the town is yet to post such growth.

For example, the median housing price in WA’s resources boom town of Port Hedland currently sits at $990,000, while the median housing price for Perth is less than half this at $480,000. In contrast, Gladstone has a current median housing price of just $390,000, which is notably lower than the Brisbane average of $451,000. Whilst Port Hedland and Gladstone property markets are notably different, the comparison does illustrate the significant growth potential of resource towns once projects commence.

Rental Demand

Likewise Gladstone’s median rents for housing and units are comparatively low compared to many other regional centres, which again shows significant room for growth. Currently the median 3 bedroom housing rent stands at just $285 per week in Gladstone, whereas other accommodation-starved resources town are reporting staggering rentals in excess of $3,000 per week.

If the majority of proposed projects are given the green light, the increase in the number of workers is likely to lead to a critical demand for housing. This anticipated rise in population, business and tourism has increased the need for new infrastructure and housing, which should subsequently place upward pressure on rentals.

The below chart shows the current median rental prices for Gladstone property (housing and units). As can be seen these rates are exceptionally affordable by national standards and show strong potential for growth.

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