Modeling the future economic,
population and housing impacts of
developments in Gladstone and
Central Queensland
John Rolfe
CQUniversity
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
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
A. Extrapolating previous trends
Median house price

Extrapolation of
previous models
indicates that
median house
prices will increase
by $35,000 per
annum to about
$660,000 in 2018
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
2011
2012
2013
2014
2015
2016
2017
2018
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
Annual change in house prices
House price change (1 yr lag)
70000
60000
50000
y = 20.557x - 3985.8
R² = 0.2732
40000
30000
20000
10000
0
0
500
1000
1500
2000
2500
Annual population increase
Median house price
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
2011
2012
2013
2014
2015
2016
2017
2018
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 2006.
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
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
Housing prices in central Queensland – up by 2.8 times
in 8 years
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
2002
2003
2004
2005
Detached houses
2006
2007
Units and townhouses
2008
2009
2010
Growth forecasts for Central Queensland
Qld Govt
population
growth
forecasts are
very strong
High Growth
850,000
Medium Growth
800,000
Low Growth
750,000
Population

900,000
700,000
650,000
600,000
550,000
500,000
2011
2016
2021
Year
2026
2031
Currently more than 100 significant projects underway
or planned in CQ
Predicting population changes - optimistic
200000

150000
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%
100000
50000
0
2011
2012
2013
2014
2015
2016
2017
Mackay residents
Rockhampton residents
Gladstone residents
Central Highlands residents
Bundaberg residents
Whitsunday residents
Isaac residents
Banana residents
Barcaldine residents
North Burnett residents
FIFO/DIDO
2018
Summary of broad predictions
• These
predictions indicate that:
Annual
change
in
Annual median
Pop.
house
increase prices
• Gladstone’s rate of population
increase will be about double the
previous decade (1,622 per year)
Gladstone
• Rockhampton’s population increase
Rockhampton
will be slightly higher than the
previous decade (1,901 per year) Mackay
• Mackay’s population increase will be
about double the previous decade
(3,128 per year)
3,133
$34,922
2,255
$31,738
6,138
$60,883
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