Toowoomba's shifting demographics an opportunity for investors
Toowoomba has a lot going for it, real estate-wise.
The good news
The city has just entered a residential recovery. It is Australia’s largest non-capital inland city. It is the ‘service town’ of the Surat Basin, which is expected to become Australia’s largest energy province.
Yet the city has a diverse economic base and now, a secure water supply. Toowoomba already holds significant regional infrastructure and several new projects have just been announced.
The challenges
The city, however, does face some challenges.
The largest is its changing demographics. Toowoomba’s age structure is polarised, on one hand a significant proportion of its population is aging, whilst on the other a younger buyer and rental group is emerging.
Toowoomba’s age structure is polarised, on one hand a significant proportion of its population is aging, whilst on the other a younger buyer and rental group is emerging.
Yet with this demographic shift comes opportunities.
Market recovery
The ingredients that characterise a market recovery are all in place in Toowoomba.
A major regional city
Few realise how big Toowoomba already is, holding 160,000 permanent residents, with its population expected to exceed 200,000 within the next two decades.
The City services a much bigger area, acting as the ‘hub’ for much of the production which occurs west of Brisbane.
In a typical year for example, over half of the trade moving through the Port of Brisbane travels to or emanates from the Toowoomba area.
Matusik Property Pulse™
Our modelling suggests a growing need for more residential construction in Toowoomba.
This, in turn, will further help increase employment.
Bottom line
We do expect prices and rents to increase, and maybe sharply, over the next 12 to 14 months as Toowoomba’s recovery gains momentum.
Investors today can anticipate some price growth. Rents should continue to grow, and most likely strongly in Toowoomba into the future.
But demographics drive the property market and Toowoomba’s twin age peaks (young and old) mean that price growth post 2016 is likely to remain subdued.
Be careful not to pay too much.
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Go here for the full Matusik Market Outlook Report on Toowoomba.
Photo courtesy of Alan Henderson/Flickr/Creative Commons.
