I've been looking forward to reporting on Emerald for some time now, it was this time last year that investors were looking at me with a clear "are you crazy" look on their faces when I was boasting about the prospects of this town. So it is with great enjoyment that I get to mention the performance that has been seen in the last 12 months.
Once sleepy town of only a few thousand has grown to over 17,000 permanent residents with a lot more growth to occur. Situated on the Nogoa river, 270km west from Rockhampton, this thriving town boasts a diverse regional economy which is thriving on the prospects of Qld's mining industries growth.
The local council body, Central Highlands Regional Council pride themselves on creating a harmonious community between the strong agricultural industry and the buoyant coal mining companies as well as local residents. Emerald is the industrial and service hub to the mining operations in the south of the Bowen Basin and is expected to grow even further as the Alpha projects start which are only 150km west.
Contrary to the beliefs of many pessimists of investing in a mining region, Emerald has provided a safe haven for investors wanting to get their feet wet outside of major cities for over 20 years. Recording only 1 year of negative growth in 2008 of 2.5% over the last ten years, Emeralds median price has shown what has to be recognised as unprecedented and sustainable growth, including a significant rise in the median sales price between 2004 and 2006 with 2005 showing growth of 39.5% over the 12 months. Last year Emerald achieved a 9.5% rise in the median sales price, compare that to the majority of areas around Australia and you would struggle to argue that it's not one of the best CG regions seen in 2011.
The capital growth is not all that Emerald contributes to your portfolio. The rental yields are amazing and should not be overlooked. Returns of 8.5 - 10% are not uncommon at the moment. 12 months ago we were renting 4 x 2 x 2 homes out for $650 per week, now the market his seeing the same house rent up to $950 per week unfurnished.
Emerald truly is the best of both worlds at the moment for a property investor with rental yields to make the city investors cringe all the while actually achieving capital growth in what is a fairly flat overall property market Australia wide.
The recommendation does not come without a word of advice to novice regional Qld investors. The rental market does fluctuate as it sees record spikes due to a number of factors including staged land releases, contracts and just the normal aspects of a rental cycle. This could see the current highs of $950 per week go to $850 per week for a while. Does that mean that property prices and rental yields are decreasing? In my opinion, the answer is no. With my experience in mining regions, this is absolutely normal. I believe to get the best indicator, you have to look at rental yields on an bi-annual basis to see how they have moved in real terms.
Land releases throughout Emerald have always been patchy and look set to continue that way. Estates seem to release 50-70 lots at a time which does not help out the rental shortages much.
Unlike many other inland mining towns, Emerald has an array of shopping centres including a newly finished Woolworths and Big W centre, 2 centro centres and an ever expanding commercial shopping precincts. Some of the largest names in Australia are making sure they have a market share of this town which also boasts some of the highest average male wages in the country. 15 minutes from the town is one of the largest freshwater holdings in the southern hemisphere, Fairbairn Dam. Boasting fishing and boating activities to the locals and tourist from afar.
In my personal opinion, Emerald is a town that should be on property investors radars both now and in the future. The prospects are second to none for this thriving town that boast an array of lifestyle activities and employment opportunities.
