Developers and Investors Eye Resource Rich Australia

Here’s a trick question for you.Is the median price for a house more expensive in New York City or the Pilbara?According to research outlined in a report by Bloomberg this week, the median price in The Big Apple is $350,729.In contrast, the median price in the Pilbara is more than double that – a whopping $795,000 (sourced from Australian Property Monitors).Unbelievable isn’t it?I was talking to a southeast Queensland property development industry executive this week who said a seismic shift was occurring on the property industry landscape.Developers, he said, are now focusing on the mining regions like never before. They have finally twigged that the magnitude of the resources boom is too big to ignore.Like a good piece of new music, sometimes it takes time to really comprehend how good something is.But this boom is phenomenal and is going to change Australia forever.By way of example, construction has started on the massive Liquefied Natural Gas terminals on Curtis Island off Gladstone, and further north Abbott Point (acquired by the Indian integrated mining, transport and power generation conglomerate) is in full swing.Funny thing is the developers – usually the visionaries and leaders of new trends – are following the tradesmen out of the employment-starved areas like the Gold Coast looking for… well… a pot of gold.This ‘gold’ is in the manifest form coal and LNG.According to the Bloomberg report, more than $430 billion of investment in natural resources is occurring across the nation – primarily in the Pilbara region and the resources rich basins of Central Queensland.With this comes a major problem. Everyone needs a place to rest their weary heads. And the developers are onto it.One of the savviest of all Australian developers, Lang Walker, has recently announced that he will create a community of almost 1000 homes in Gladstone, at the heart of the LNG boom.The similarly adept Devine Ltd is planning to develop the region’s largest ever residential community – a $1.5 billion project with almost 3000 homes.The real pot of gold may not be beneath the ground in coming years but what’s built on the ground – in the real estate.“Demand for workers is outstripping the supply of housing in mining areas, pushing median prices in towns such as Karratha to more than double New York City’s,” says the report.“That contrasts with Australia’s eight capital cities where prices fell 1.2 per cent in the three months to September 30, highlighting the dilemma of the two-speed economy where mining and related businesses boom and while other industries lag.”Enter the new land of opportunity.Cities like Gladstone, Rockhampton and Mackay are bearing the brunt of the mining boom.In Mackay, for example, rental yields are extraordinary.You can buy a typical three bedroom home in Mackay for $365,000 and secure rental income of $650 per week.In Gladstone, vacancy rates for residential rental properties are less than 1%, with reports of houses renting for over $1000 per week.Perhaps the most severe example of the housing shortage is in the Central Queensland coal-mining town of Moranbah, where rents have jumped $1000 a week in the last 3 months, and a modest five bedroom, two bathroom home looks set to create a new benchmark with a $3200 per week rental asking price.In Rockhampton and its surrounds, a development boom goes along quietly but surely.Empire Rockhampton, which commenced an expression-of-interest campaign in October, has secured a strong response from local investors for its self-contained apartments, with a particular focus on one bedroom apartments to meet demand from the corporate rental sector.Quest Rockhampton was launched off-the-plan in late September with a suite of ‘dual-key’ serviced apartments to meet the needs of business travellers that use Rockhampton as a base for business dealings.Concept Living Properties is about to break ground on what the local tourism officials call a ‘catalyst project’ for the region – a $35 million tourism and conference facility called Oshen.Oshen will capture a growing market of short stay market for business executives and resources industry workers in need of a much needed break in the area’s tourism hub of Yeppoon.Capricorn Coast Tourism says almost 1000 more rooms are desperately needed for the region to capture the flow-on from the boom underway.No wonder the developers are now part of the seismic shift.And no wonder the investors are focusing their attention in these regions, because that’s where the investment opportunities are.No wonder most flights from Brisbane are fully booked (A colleague this morning paid a $500-plus fare for the pleasure of a one way flight from Gladstone back to Brisbane.Central Queensland looks set to be the epicenter of Australia’s growth prospects for years to come.The resource industry growth is not pie in the sky – it is committed and one of the largest booms in Australian history is well and truly underway.This might not be the Big Apple, but it’s where all the action is.Start spreading the news.