Property Investment Townsville
Townsville’s not always the first place to come to mind if you’re in the market for an investment property. The good news for you is that the scene is set for this investment underdog to finally make its move to the front of the pack. Townsville does have the potential to emerge as a serious contender in the Queensland property market. However, your ability to capitalise on that potential will depend on how much you really know about the Townsville’s unique characteristics and their effect on its property investment market. So, what must you know about property investment in Townsville to ensure that your next move is in the right direction?
Factors affecting the Townsville investment property market
Situated approximately 1,348 kilometres to the north of Brisbane, Townsville has long boasted the title of ‘unofficial capital’ of North Queensland. Its affordability, location, climate, population, economy and infrastructure are entirely unique. You have to take into account all of these factors if you’re looking to purchase a Townsville investment property.
Townsville’s climate and location
For many, the move to Townsville is a lifestyle choice, so you need to factor that in to your search for a Townsville investment property. Located in the dry tropics, it boasts mean (average) annual temperatures ranging between 19.8°C and 28.9°C. That makes its climate and laidback lifestyle two of the biggest factors influencing the property investment market here.
Townsville’s spectacular scenery and proximity to the Great Barrier Reef are also factors that make it an attractive proposition. You should look for an investment property in Townsville that takes advantage of these factors in terms of floorplan and location.
Affordability
Townsville’s median house price for the 12 months ending August 2015 was $350,000 and median unit price was $290,000. This means that Townsville investment properties are more affordable than their counterparts in Brisbane and other areas of Queensland.
They’re also even more attractive when you look at them in the context of the current record low interest rates. The Reserve Bank of Australia’s current cash rate is sitting at 2.0% (as at 3 November 2015). You’d be wise to seriously consider property investment in Townsville before its true potential is more widely recognised. Investing now also means that you beat any price rises and can take advantage of these unprecedented low interest rates for longer.
Townsville’s economy
Unlike Cairns to the north, tourism isn’t the be-all and end-all of the Townsville economy. Your search for a Townsville investment property should be much broader and should go beyond just looking at potential holiday rentals. Whilst Townsville certainly does benefit from tourism, the good news is that its economy is sufficiently diverse as to ensure it isn’t plagued by the same kind of seasonal fluctuations as Cairns. Instead, it boasts a well-rounded and diverse economy driven by:
- Beef and sugar production;
- Mining;
- Health services;
- Education and training;
- The retail sector;
- Government administration; and
- The defence forces, including Lavarack Barracks and the RAAF base.
This economic diversity is key to Townsville’s emerging prosperity. It also has a massive impact on the forces of supply and demand in the Townsville property investment market. That’s because of their effect on local employment levels. If your potential Townsville investment property is proximate to the big Townsville employers, you’ll have an advantage over other less proximate properties on the market in terms of ability to attract long term, reliable tenants.
When browsing properties, look for proximity to as many of the big Townsville employers as possible, such as:
- The Defence Forces (Lavarack Barracks and the RAAF Base);
- James Cook University;
- Townsville General Hospital and the Mater Hospital;
- The Port of Townsville;
- Townsville airport; and
- Government departments and research facilities.
Capitalising on the Townsville lifestyle
That said, you also have to be proximate to the local amenities that give Townsville the edge in terms of lifestyle, such as the beaches and the Strand, schools, childcare centres and entertainment and leisure venues.
The recent investment of $40 million into redevelopment of the former army base, Jezzine Barracks, and Kissing Point Headland is paying dividends. It’s opened up more areas of parkland for recreational purposes, further enhancing Townsville’s credibility as a lifestyle or ‘sea change’ destination.
Similarly, new land releases along the Ross River mean that you can capitalise on proximity to the CBD and the wealth of recreational facilities that are dotted along the river.
Townsville’s infrastructure – Indicators of great things to come
Infrastructure is everything when it comes to a good Townsville investment property. The good news is that Townsville has embarked on a co-ordinated program of infrastructure development: The Townsville City Economic Development Plan 2013 – 2017. You can find it here:
Arguably, this will assist Townsville to take its place in the global economy. It should also stimulate the local economy, creating more jobs and increasing prosperity. Current projects include the expansion of the Port of Townsville and improvements to the railway lines connecting the port to mining areas such as Mount Isa and the Galilee Basin.
The port itself is a crucial link between northern and central Queensland’s mines, cattle farms, sugar plantations and overseas markets. This project will result in a dramatic increase in its capacity. Projections are that its trade capacity is set to treble in the next two decades. Dredging and other works also mean that Townsville will play host to visiting cruise ships and will benefit from the boost to tourism that will follow. The ongoing work to improve the port facilities bodes well for you if you’re considering Townsville as an option for property investment.
Another current infrastructure project in Townsville is the airport upgrade, which has connected Townsville to international flight destinations such as Denpasar, Bali and beyond. This means that Townsville will benefit in the long run from the additional overseas trade and tourism. Expansion of James Cook University so as to create a world-class science precinct and the $317.5 million Townsville Hospital redevelopment should also be factored-in as positives in your search for a Townsville investment property.
Townsville’s population growth and profile
The population is on the rise in Townsville. It naturally follows that there will be more of a demand for housing. Your Townsville investment property plan should aim to capitalise on that growth.
Areas of Townsville with the highest rates of population growth included Deeragun, Bohle Plains and Mount Louisa. (Source: Australian Bureau of Statistics – QLD State Summaries) In fact, Deeragun ranked second across the whole of Queensland in terms of largest growth and fastest growth. Most importantly, you need to appreciate that Townsville’s median population is slightly younger than the rest of the state according to the most recent Census (Source: Queensland Regional Profiles – Townsville City Local Government Area), This means your search for a Townsville investment property should focus on areas with ample places of employment, schools, childcare centres, access to the University, shopping centres and other amenities.
Avoiding the pitfalls in Townsville property investment
Like any investment, you need to do your homework and familiarise yourself with the potential pitfalls associated with property investment in Townsville. You should avoid purchasing in an area where there’s already an oversupply of a particular type of accommodation. You need to be able to steer clear of areas where there are high property vacancy rates or falling rents. They’re indicative of a glut or oversupply of properties. Likewise, you should also be wary of purchasing an investment property in Townsville if it’s in an area of high unemployment.
There is a downside to Townsville’s beautiful climate. You also need to mindful of the fact that Townsville is in a cyclone area. Older properties are less likely to comply with the stringent requirements around wind classification (ability to withstand cyclones) under the Australian Building Code and Australian standards. A new build must comply. For that reason, a newly-built investment property in Townsville is a better option than an older established home or unit.
You also need to consider whether your potential Townsville investment property is located in a low-lying storm surge or flood area. You can access maps and suburb information to inform yourself about these areas here. With an average monthly rainfall as high as 301.4mm in February, you also need to ensure that your Townsville investment property is adequately weather-proofed and built to cope with the extreme weather conditions accompanying the wet season. Again, only a new build can give you that peace of mind.
Visit the range of investment properties currently available in the Townsville region.
The state of the Townsville property investment market
Negatives aside, property investment in Townsville is warming up and that’s great news for property investors. As a savvy investor, you can’t continue to ignore Townsville’s burgeoning industries, steady population growth and the rising demand for suitable housing. There are exciting new land releases across Townsville, too. Best of all, low interest rates and Townsville’s low median house price mean that the time is right to make your move and include a Townsville investment property in your investment portfolio…but do your research first.
At Tandem 54 we can take the stress and uncertainly out of property investment in Townsville. We know the Townsville property market better than anyone else and can help you back a winner. Call us today on (07) 3861 9853.
