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Manufacturers thrive in Logan

Business confidence in the City of Logan continues to strengthen as major investment is secured for future industrial estates and manufacturers embark on multimillion dollar expansion plans and explore opportunities in new international markets.

Manufacturing has long been a significant contributor to Logan’s economy – valued at around $2.88 billion and creating 8,700 jobs, the sector is the top third highest revenue generator and is the city’s fifth largest employer.

While the industry has seen an overall decline nationally, many Logan businesses in both traditional and emerging manufacturing sectors have continued to grow and thrive.

Local vitamin supplement manufacturer ATP Science will soon consolidate their premises into a $15 million purpose-built 6000 sqm headquarters in Meadowbrook – a move that will allow the company to develop new lines, double their workforce and fast-track global expansion plans.

Managing Director Jeff Doidge said the time was now to invest in a new Logan headquarters as the business was experiencing massive growth and exploring opportunities offshore.

“About 80 per cent is sold in Australia and we are currently exporting to the UAE, US and UK and have some emerging markets in India and China,” he said.

“Being in Logan gives us access to the ports, the airport and the sea docks – as far as major infrastructure is concerned it’s fantastic.”

Accessibility is one of the city’s main draw cards for manufacturers – Logan is just a 30 minute drive to the Port of Brisbane, in close proximity to 3 international airports and conveniently located between Brisbane and the Gold Coast.

Infrastructure investment in Logan is at historic levels – with the completion of the $500 million Logan Enhancement Project and more than $18 billion in the pipeline, investors are taking interest in the city’s industrial areas.

International property investors MapleTree Logistics Trust recently secured 36 hectares of land in Park Ridge for $95 million, which forms part of a future 157 hectare industrial estate.

The city is already home to several industry leaders including award-winning product commercialisation facility Evolve Group; and specialists in rocket and propulsion systems Black Sky Aerospace, who were the first to secure access to NASA’s Australian launch site.

Leading manufacturer in tanker solutions Holmwood Highgate has operated in Logan since 1994 and continues to expand their workforce to keep up with business growth.

Director Wade Mellish says that the city’s location and access to a skilled workforce has supported Holmwood Highgate explore opportunities in the global defence industry.

In 2018, Holmwood Highgate was awarded a contract as part of Rheinmetall’s Australian supply chain, a crucial step in furthering their expansion into new markets.

“The City of Logan allows us to deliver world-class products both domestically and internationally,” he said.

“We’ve got upwards of 200 staff now – blue and white collar – and increasing the workers every day because of the amount of work that we have on.”

Within a 40km radius, the city has access to a regional catchment of more than 2.6 million people and a large pool of talent for employers to choose from.

Furthermore, the presence of major transport and logistics companies and proximity to a diverse network of suppliers makes Logan an attractive location for businesses of all sizes.

The ease of doing business in Logan has driven an emergence of niche manufacturers in the food and beverage categories.

Food and beverage processing has continued to grow and is the city’s most productive sub-sector.

Small businesses including craft brewers, honey product manufacturers, coffee roasters and chocolate makers operate successfully from Logan.

Logan City Council has recently made it easier for craft brewers to establish themselves in Logan by implementing significant changes to the planning scheme.

The City of Logan is fast-becoming a destination of choice for manufacturers in the region and offers eligible businesses incentives to move into the city.

Source: www.loed.com.au/investinlogan/


 

Madison Park Stage 1 is now registered

In some exciting news for property investors, Stage 1 of Madison Park is now registered and stage 2 is now available for consideration.

This exciting new residential community is perfectly positioned within Park Ridge, a vibrant and well-connected urban location in the Logan region of South East Queensland.

It is located just 30 minutes from Brisbane CBD and less than an hour to the Gold Coast’s beautiful beaches.

Relax and enjoy everything life has to offer right on your doorstep, with employment, education facilities, shopping and medical facilities right around the corner.

Set in picturesque, tree-lined streets, Madison Park is the ideal place to raise your family, in a friendly, community-oriented neighbourhood.

Easy living has a new address at Madison Park

Madison Park is a central piece in a 25-year development plan to create an urban hotspot, where everything is designed to support a better lifestyle.

Public and private education providers are within minutes, and there are numerous childcare facilities within close proximity too.

The refurbished Logan Hospital is just 15 minutes away, in addition to a brand new Woolworths and the upgraded Park Ridge Town Centre for your convenience.

The residential community is within close distance to several city centres and industrial estates, providing strong employment opportunities.


 

Boom time forecast for Brisbane’s housing market in 2020

Record low interest rates and cheap credit could boost Brisbane home prices by up to seven per cent in one year, a new report reveals.

SQM Research’s Housing Boom and Bust Report for 2020, released today, forecasts an increase in home prices in the Queensland capital of between three and seven per cent — a recovery from the sluggish growth recorded in the first half of 2019.

The base case scenario forecast assumes no changes in interest rates and no intervention by the Australian Prudential Regulation Authority (APRA), in which case SQM predicts Brisbane home prices would increase between three and six per cent.

In the best case scenario for Brisbane, prices are forecast to rise between four and seven per cent if interest rates are cut to 0.5 per cent by April 2020.

And the worst case would be if interest rates are cut to zero, which SQM predicts would trigger price falls.

SQM Research managing director Louis Christopher said Brisbane’s improving economic outlook and recovery in mining investment was set to benefit the housing market.

“An increase in mining investment is coming through as we speak and that’s going to be a nice job creator for the city,” Mr Christopher said.

The forecast is for Sydney home prices to rise between 10 per cent and 14 per cent and Melbourne prices to jump by 11 per cent to 15 per cent.

But while Sydney and Melbourne home values are set for a sharp rebound, Mr Christopher said he had doubts about the sustainability of the recovery in those “overvalued” markets.

“Long term, our two largest housing markets look vulnerable and forever reliant on cheap credit,” he said.

“Brisbane is definitely offering better value for money for those who decide to move from Sydney to Melbourne.

“The problem in the past has been people will come from the south but struggle to get jobs, but the economy’s picking up and I think there will be more white collar jobs on offer in Brisbane over 2020 and 2021, which may well encourage more buyers from down south.”

Mr Christopher said he also anticipated a recovery in Brisbane’s rental market in 2020, with rents forecast to increase between three and five per cent.

“Brisbane is increasingly facing a shortage of rental accommodation after years of being in surplus,” he said.

“Vacancy rates are consistently falling and it has turned into a landlord’s market.”

Brisbane’s vacancy rates are increasingly becoming tighter

From an investment perspective, Mr Christopher said Brisbane’s eastern suburbs were most likely to outperform.

“When I look at rental vacancy rates, they tend to be tighter in Brisbane’s east than other regions,” he said.

“I think it’s a matter of lifestyle. The bulk of residents, if they were going to pick a region in which to live, would probably pick Brisbane’s east.”

It comes as the NAB changes its expected timing for the next interest rate cut.

The bank now expects the Reserve Bank of Australia to slash the official cash rate to 0.5 per cent in February 2020 — and potentially announce a package of unconventional policy should there be a need to provide further stimulus to the economy going forward.

“To be clear, we think that the RBA should actually provide a further interest rate cut next month with private sector growth remaining weak and little evidence to date that prior easing or the tax rebates has done enough to offset the weakness in the economy,” the bank said in a note to clients.

“However, for now, the RBA appears to be in a holding pattern, while it assesses the impact of prior rate cuts and ‘the gentle turning point’.

“We see an improvement in growth over time but not to a sufficiently strong rate of growth to prevent the unemployment rate beginning to rise.

“At the same time, the government does not seem to be inclined to provide material fiscal stimulus in the near term, which increases the need for the RBA to ease further (including a further rate cut and unconventional policy) should our forecast of a deteriorating labour market materialise.”

Brisbane couple Kimiora, 25, and Michael Bennallack, 33, are selling their house in Fairfield and hope to make a profit so they can upgrade to a bigger home in the area.

They spent the past three years renovating it and are ready to move on to their next project.

Mrs Bennallack said access to cheaper credit and the recent interest rate cuts, coupled with the prospect of more to come, had helped them to achieve their goals more quickly.

“We refinanced our mortgage at the start of the year, which was really good, and the rate cuts have given us a bit more money in our pockets to do things around the house and give it more street appeal,” Mrs Bennallack said.

Marketing agent Maree Grieve of Place – Annerley said the property had already gone under contract after its first open home on Saturday.

“We had 29 groups of buyers through, multiple offers and it went under contract on Monday,” Ms Grieve said.

“I think what we’re finding is there are definitely a lot more first home buyers in the market because money’s so cheap at the moment. People are saving and buying instead of renting.”

Source: realestate.com.au


 

Brisbane now best of Aussie cities as rates stay at historic low

Christmas has come early for homeowners, with almost a quarter of experts naming Brisbane the best city in Australia to invest in as the Reserve Bank chose to hold fast on interest rates.

Chairing the final monetary policy meeting of the decade for the RBA board, Governor Philip Lowe not only kept the official interest rate at a historic low 0.75 per cent – a move widely expected by the market – but he said “it was reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target”.

“The Board is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time,” Mr Lowe said in a statement released after the RBA meeting.

All but one expert in the latest Finder RBA Cash Rate Survey (97 per cent) predicted rates would hold, and a whopping two-thirds now expect the central bank will move to drop to 0.5 per cent in February 2020.

The board is facing growing pressure to find the right balance between not overcooking the housing market and stirring up the rest of the stagnant economy via one of the only moves available to the RBA – lower rates.

The same Finder survey saw almost a quarter of the experts name Brisbane the top city to buy property in (22 per cent), with the Queensland capital showing “good value”.

The results could mean a surge in New South Welsh people on the hunt for property in Queensland over the holiday season, with Finder insights manager Graham Cooke saying Sydney’s low performance in the survey was a surprise.

“While Melbourne and Brisbane are strong candidates for the most promising property market in Australia, it is a bit stunning to see Sydney perform relatively poorly,” he said. “The state you live (in) doesn’t need to be the state where you buy. With many Sydneysiders grappling with housing affordability, rentvesting could be the way to go.”

Melbourne figured at the top too (22 per cent) – though with a significantly higher price tag for buyers. Canberra and Sydney were tied (13 per cent each) while 9 per cent favoured Hobart, and dragging along the bottom were Perth and Adelaide “with only 4 per cent of experts tipping the cities to be a wise property investment”.

The final RBA monetary policy meeting for 2019 comes amid a weak domestic economy that’s crying out for stimulus, with the central bank having responded with three rate cuts that have paid dividends for housing prices but not as much for the rest of the economy.

The latest RBA Rate Indicator showed market sentiment has definitely shifted towards a hold position, with a 91 per cent expectation of “no change” yesterday. “As at 2 December, the ASX 30 Day Interbank Cash Rate Futures December 2019 contract was trading at 99.270, indicating a 9 per cent expectation of an interest rate decrease to 0.50 per cent at the next RBA Board meeting,” according to the ASX rate tracker.

One of the Australia’s Big Four banks, the Commonwealth Bank, expected the RBA to keep its options open for future rate cuts.

“It is not the external sector which is driving low annual growth rates in Australia’s real GDP, but the weakness in Australia’s domestic economy,” the latest CBA Global Markets Research report said.

But if the RBA expects more cash in hand for homeowners will mean more retail spending, it may be disappointed, with CBA predicting that extra wealth off lower mortgage rates would be used “to speed up debt repayment”.

“Most households that have a home loan have not adjusted their principal and interest repayments downwards as a result of recent RBA easing. Just 7 per cent of CBA customers with a principal and interest home loan, for example, have reduced their monthly repayments as mortgage rates have come down in 2019.”

Source: realestate.com.au / The Courier Mail


 

Brisbane to outshine Sydney and Melbourne dwelling prices in 2020

Brisbane dwelling prices will outperform those in Sydney and Melbourne in 2020, according to Westpac.

They believe the Queensland capital will see eight per cent increases next year, above the six forecasted for the two major capital city markets.

Westpac suggest the strong momentum in Sydney and Melbourne will fade as affordability issues re-emerge and population slows.

Brisbane is well positioned due to its affordability and population inflows.

“Momentum heading into 2020 is clearly positive, albeit uneven across markets,” Westpac advised.

They said in the near term, the main guidance comes from current price momentum, auction markets, listings and their buyer sentiment measures.

“Nationally, these are all showing positive prospects for early 2020 with price growth accelerating, auction clearance rates riding high in Sydney and Melbourne, listings showing a clear tightening and a positive pulse from buyer sentiment pointing to a further lift in demand.

“The cyclical momentum is strongest in Sydney and Melbourne but is also showing a notable pick up in Brisbane. Adelaide and Hobart are seeing a more muted lift with Perth yet to pull out of its multi year price decline.

They predict a number of factors to shape residential property over 2020.

“The first is policy – we expect the RBA to cut rates by another 25bps at its February meeting and to turn to so-called unconventional policy measures to provide additional stimulus,” Westpac advise.

The second factor is supply, both in the form of sellers returning to the market and the physical supply of new dwellings. New listings fell to extreme lows in 2019.

“Our analysis suggests the listing cycle tends to follow the sales cycle by about six months. A likely lift in new listings will test the depth of demand in the first half of 2020. The supply of newly built dwellings will also remain elevated. Completions eased back from a record 218k in 2018 to an estimated 205k in 2019.

“Our projections have this easing to around 175k in 2020, still well above average pre-boom levels with about 50k of that high rise dwellings. New supply could prove difficult to absorb and will weigh on prices and rents in some segments – Sydney’s rental vacancy rate and Melbourne’s stock of unsold units being key areas to watch.

Westpac believe would-be buyers in Sydney and Melbourne will be priced out of the markets and will seek more affordable markets if the current price resurgence continues, which will slow growth.

“As 2020 unfolds we expect another dynamic to come to the fore around affordability and population flows.

“Despite the price correction in 2017-18 and a further lowering in interest rates, affordability remains relatively stretched in Sydney and Melbourne.

“The resurgence in prices see these markets run into the same affordability constraints that emerged in 2016-17 as prices near previous peaks.

“Investor activity will lift as low deposit rates and equity volatility drive more interest in real estate but funding is likely to remain a constraint on investors.”

Source: propertyobserver.com.au