By Simon Newman

As one of our top areas for property investment nationally, we thought we would outline the reasons why Toowoomba is seen as an area with great potential for property investors in the coming 3 years and beyond.

Technical Analysis

Price Cycle. You may have also heard this referred to as the property cycle. Property price movements in any given market tend to work on a cycle that historically takes 8-12 years to play out before repeating. For the majority of this time, prices tend to drift along sideways with some minor ups and downs along the way. The vast majority of the upward price movement (we usually refer to this as the “boom”) usually only happens for 2 or 3 of these years before the next cycle of drifting (referred to as the slump) resumes.

If we apply this to Toowoomba, the last large movement in property prices occurred between 2003 - 2004. Since then, the market has been drifting with a median price that today sits in the high 200,000’s.

Based purely on the history of price movements in this market, we would expect to see the large upward movement in prices (boom) occur in Toowoomba between the years 2012 - 2015.

Fundamental Analysis

Overlaying this is the expectation that Toowoomba will gain significant exposure to the emerging mega-industry that is mining (coal and CSG) in the Surat Energy Province. This exposure will be increasing to a peak over the next three years and will continue for at least five years beyond that.

The appealing point of interest for investors is that whilst Toowoomba is positioned to be a major player in the Surat Energy Province development, it is not solely reliant on the one industry for its existence.

Manufacturing for other sectors, agriculture, defence, health and education are all well established industries in the area. This provides a degree of risk management for the property market in general in the area and will avoid the extreme boom/bust cycles that we often see in towns reliant on only one industry.

Conclusion

Toowoomba suits the property investor with views to hold their properties in the area until beyond 2015. Buying into an already running market can be a much more stressful experience and less profitable compared to taking an early position in the market. Whilst it is relatively quiet, sellers are more negotiable and other services related to property such as builders, real estate agents etc are more accessible.

We would therefore recommend to investors looking at this market to take positions in the market soon to maximize profit and minimize stress.

For more information regarding this market and how to make best use of it, please contact one of our local consultants through the Power Tynan office.

Simon NewmanRegional Manager NPA Property Group Southern Queensland