Roma Property Watch Q3 2012
Maranoas regional capital Roma is on the cusp of major urban reform, with unprecedented growth in various resource industries placing immense pressure on this regional hub to service and accommodate an ever increasing workforce and resident population. While Roma is home to the largest cattle sale yards in Australia and contributes to a substantial agricultural base that generates approximately $620 million annually in the Maranoa region, it is the progression in mining activity and advancement in Coal Seam Gas (CSG) extraction/ transmission that is proving to be a catalyst for significant growth in the local economy. The Queensland Resource Council estimates more than 18,000 new jobs will be created in CSG and Liquefied Natural Gas (LNG) industries, placing immense pressure on associated regional hubs like Roma to service and accommodate the workforce required to deliver and operate these projects, including supporting infrastructure and adequate housing. In recent years, the town has invested millions on upgrading the regional hospital, airport, roads and community infrastructure. Roma has proved itself as one of the most stable regional economies in Queensland and the indications are there for it to enjoy continued growth. Investment prospects in the Roma housing market look promising, evidenced by significant long-term employment opportunities in the area, projected population growth, low property vacancy and high rental yields currently being achieved in the market, all of which underpin an undersupply of housing more specifically housing options.
The Roma house market registered a total of 105 transactions during the April 2012 half year period, representing a remarkable 69.4 per cent uplift in activity from the April 2011 period. The house market recorded a median price of $340,000 for the April 2012 period, translating to an acute 13.3 per cent spike from the April 2011 period.
During what has been a challenging five years in the Australian housing market, Roma has bucked the nations trend to record consecutive average annual growth in the median price during this period. The median house price achieved an impressive average annual growth of 7.2 per cent over the past five years, which is a testament to the resilience of this diverse regional economy. The 10 year average annual growth rate was 14 per cent, reflecting stable long term growth in what is still an affordable market. Whilst the housing market was not immune to the ramifications of the Global Financial Crisis (GFC) during 2008, the markets ability to regain traction almost immediately and maintain a buoyant median price reiterates the stability and prospects for the local economy.
The land market demonstrated exceptional growth in the April 2012 half year period, registering a total of 46 transactions on par with volumes recorded for the October 2011 period. This level of sales activity is unprecedented in the market, surpassing the peak experienced during the October 2007 period (pre-GFC). An analysis of land area distributions for sales recorded in the year to 30 April 2012 unveil a majority (32 per cent) of sales were for land in the 1,000 to 1,199 sq m range. Land between 800 to 999 sq m accounted for the second most transacted range followed by land greater than 2,000 sq m. It appears as though demand for property in the sub 800 sq m range is comparatively weak, accounting for only 7 per cent of sales.
The Land Price Points chart demonstrates a radical shift in buyer demand within the $140,000 to $179,000 price range, with 73 per cent of total purchases recorded in the April 2012 period compared to 12 per cent during the April 2010 period. A significant contraction in activity within the sub $100,000 price range has also contributed to the prevailing median price of $158,000, with only 4 per cent of sales recorded in this range. Observing the long term median price movements, periods of volatility over the past 10 years have occurred when sales volumes have been considerably low. PRD Research requires at least 15 transactions to recognise a reliable median price, and thus the long term median price trend should be used as a more accurate measure of performance. Over the past 10 years, the median land price has grown at an average 25.1 per cent per annum, dwarfing the rather impressive 4.9 per cent average annual growth recorded over the past five years. The shortfall of house and land options in the area has inflated the median price to its current peak, prompting many builders/ developers to capitalise on the opportunity to bring stock to the market.