Last week we gathered at the Calile Hotel for our quarterly review of the numbers. I worked through the data with our regular panellists Christine Rudolph, Matt Lancashire and Ray White chief economist Nerida Conisbee. But we included two guests this time – managing director of the Ray White Group Dan White and CEO of iOR Drew Morland. Dan and Nerida began by taking us through the macro numbers. They showed that Brisbane had been steaming forward with annual price growth of 20 per cent per year, a rate so steep it makes the Kangaroo Point cliff stairs look flat! This year it has slightly softened to 16 per cent, meaning that properties were still increasing at one sixth of their value every year on average! I commented that this incline was getting dragged up by the extreme growth in the first home buyers market, off the back of government incentive.
Dan White questioned whether I thought that meant they had got it wrong? My response was ‘yes’. The jump from $750,000 to $1 million was too big of a jump and a stepped approach over a number of years would likely have seen a more moderate increase. However I did add ‘without the sharp increase in prices, developers would not have felt confident to start rebuilding’. It’s a hard balancing act. Matt and Christine then took us through a more local look at the Brisbane market. Matt focussed largely on the luxury market, above $4 million. He noted the number of locals buying above $5 million, the number of them below 50 years of age and how many properties that were being built at a construction cost of over $10,000 per sq m. Christine spoke to the improvements coming to Brisbane and how they were underpinning the strong forward outcome. Precincts like The Gabba, West End, North Shore and Newstead featured as activation hubs that would reshape the inner city over the next 10-plus years.
But the final part of the night with Drew Morland was the highlight for me. Away from the property numbers, Drew spoke with precision and ease about the actual fuel situation in Australia. He said the three key steps were extracting the quality oil we have here in Australia, then building a large enough storage facility to hold what we require before finally building another refinery over the next 10 years, giving us fuel sovereignty. He said our largest issue was fuel storage facilities. That we had the smallest fuel storage facilities in the world, two thirds of what New Zealand has and they are the second worst when it comes to fuel storage. When I summarised the night, it was clear that Brisbane has many strong levers being pulled in its favour: population growth, infrastructure improvement and construction costs limiting supply. But the message was also that in June/July there could be a ‘kink in the hose’ for fuel supply and there might be a few months of rationing which will take a moment for us to adjust too.
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