Eternal Homes Projects’ Post

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Hello, my name is Bob Lifton Musty. I'm the Head of Research and Acquisitions at a townhouse Projects. If I analyze and identify regions around the country that are of particular interest to me and should be of interest to you too. I leveraged my previous experience as a Reserve Bank of Australia economist and Boston Consulting Group Data scientist to analyze and consider various regions around the country. Let's talk about 1:00 today. But before we get started, a quick disclaimer. Eternal Homes Projects is not a financial advisor. You should seek independent financial, taxation or legal advice depending on your own individual circumstances. What we present is for research purposes only and should not be considered as independent financial advice. I'd love to talk to you today about the state of Queensland in particular. And I think that there are a few things that are really interesting about Queensland as an area for the Australian residential real estate market. First one is in terms of population growth. So Queensland has seen some of the strongest compound annual growth rates in the country on a state by state basis. And is equally tied with Victoria as the strongest state for population growth. What's interesting about that population growth is if you decompose it into its subsequent drivers, you can see that a large chunk of Queensland's growth is being driven by Interstate migration. So it's not just natural domestic increase, but a lot of people moving to Queensland that's driving this really strong population growth. Something else that's really interesting about Queensland as a state is the really large infrastructure investment that's happening there. So we can see that in terms of dollar values, the forecast infrastructure spending for Queensland is going to be the strongest of any state in absolute terms and one of the highest in terms of share of state revenue. Queensland is also getting a very large share of federal government expenditure in infrastructure, much larger than its relative share of population if you compare it with the. Victoria, for example. So Queensland is seeing a lot of population growth and a lot of infrastructure investment. These are big drivers of residential real estate market price growth. I'd like to zone in on a specific region in Queensland. Now that is the statistical area 3 of Jimboomba, which is an inland Queensland town in Brisbane S Let's have a look at the statistics of the area in terms of its labor market. Its demographics, its income and finances, population and infrastructure investment. Let's unpack those together and so we can start to get a clearer picture of why this region is particularly attractive. Let's compare Jimboomba within the context of its greater region and also Queensland in general. So when we have a look at the unemployment rate, we can see that Jimboomba is quite low compared with both its region especially, but also Queensland in general. In terms of the participation rate, which is a really important measure of how strong the labour market is, we see that Jimboomba. Participation rate is very, very strong compared to both the state and its local region. This overall paints a picture of a very strong labour market. And in terms of population growth, Jimboomba's even stronger. The 6.2% compound annual growth rate over the five years from 2016 to 2021, it's almost three times that of Queensland's average and more than double that of its local region. In terms of its share of owner occupiers, again, Jimboomba really outperforms. This local region in the southwest of Brisbane, and it also does even better than Queensland in general. So a lot of owner occupiers in this area. And then finally, even though there are a lot of owner occupiers, the percentage of people who are experiencing mortgage stress is relatively low compared to what you might expect given the scale of home ownership rates. So yes, it's a little bit higher than the state and the local region, but not as much higher relative to the. Large share of owner occupiers that you see. Overall Jimboomba looks like a pretty attractive area. Let's get into some of the specifics with some graphs. So if we dig into the unemployment rate and the participation rate into more depth, we see very clearly that Jimboomba's always had a relatively low unemployment rate as compared with other Greenfield areas in Queensland and its local region and Queensland in general. So it's unemployment rate has always been relatively low and it's gotten even lower over time. This is despite the fact that it's participation rate has held up pretty stable over time. This altogether paints a picture of a very strong local regional labor market. In terms of demographics, we can see that Jimboomba has a relatively large share of people in the zero to 20 years age bracket, which belies strong family dynamics and are relatively low share of retirees. That's people over the age of 60. What's even more interesting is. The relative percentage point changes in these cohorts, so we've actually seen that over the last five years from 2016 to 2021 that the percentage point increase in the 20 to 40 years age bracket that's the people most likely to have families has been substantially larger in Jimboomba than in other Greenfield areas or Queensland in general. This generally paints a picture of a region that is really preferred by families. And is increasingly preferred by families. What's really striking about the household income and finances situation in Jimboomba is the relatively low share of renters and renting households and the relatively high share as a result of owner occupiers. What's particularly striking by this is the relatively large share of owner occupiers driven by mortgages. So you have a lot of people who've leveraged up to buy into the area, but if you decompose. That a little bit. You see that even though there's a large amount of owner occupiers with leverage in the area, they aren't experiencing particularly notable levels of mortgage stress as compared with other regions or Queensland in general. So the general picture we have is of a relatively large owner occupier rate driven largely by households buying in the area with leverage but with relatively low levels of mortgage stress. I'm most excited when I look at Jimboomba's population growth. This is really, really strong. So if we look at Jimboomba's compound annual growth rate, that's the percentage compound growth rate year on year that Jimboomba has been growing at. From 2016 to 2021, we see that it's been growing at 6.2%, which is almost double that of Queensland Greenfield areas in general and is almost triple that of the state. I mean this is an area that's seeing really rapid population growth. A lot of that is driven by within state immigration and population growth, but there's a substantial portion of Interstate migration into Jimboomba too. So generally speaking, Jimboomba seeing a lot of population growth that's pretty broadly based and not overly reliant on international arrivals. Something that excites me quite a bit about Jimboomba looking into the future of FY23 24 is infrastructure investment in Logan Beaudesert, the region that Jim Bob is in. If we breakdown capital expenditure per capita, we can see that across a broad range of categories. Logan Beaudesert expects to see substantially higher infrastructure investment per capita than Queensland in general and Metropolitan Brisbane. In terms of transport and main roads and health, it's substantially larger than the Queensland average and outperforms in education and housing as well. In terms of energy and public works, it's largely in line with metropolitan Brisbane. Looking at this infrastructure that's coming down the pipeline makes me feel pretty confident that the area is going to see a lot of continued growth into FY23, 24 as well. OK, we're done. Thanks for joining me today. I hope you found it interesting and engaging. My name is Martin If Dimoski and I'll see you next time.