Property Point

I reckon there are several things that give a true indication of an underlying confidence in a city’s economy and its future.

There might be many others that I am far too unsophisticated to have noted but the ones I am referring to are: new childcare centres, new aged care facilities and pub renovations.

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When companies invest money in the construction and infrastructure required for these businesses they have had to do their research.

The cost of building and fitting out a childcare centre is huge and there are new ones dotted around Mackay.

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You don’t invest the sort of money that is required for that unless you are very, very confident that there is going to be a strong and prolonged demand for the services of the childcare centre.

Now this is one of the many areas in which I have no expertise whatsoever, however I find myself thinking about these things and I imagine there are a few key things that an investor in child care centres takes into account before deciding to spend millions of dollars building a new facility.

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One reasonably obvious question they would ask themselves is: are there going to be enough kids in this town to create the demand we need to justify the investment we are making? There might be lots of kids now but will there be plenty in 10 years’ time?

I imagine that if the answer to those questions is “no”, the childcare operators would walk away before spending the money.

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But there has been a proliferation of childcare centres. Now these kids are not hanging around Mackay by themselves; they are part of families and have parents who are living and working in Mackay. The childcare operator obviously feel that these families are putting down roots in Mackay. They’re not fly-by-nighters, they are here for the long-term, working, buying a property, raising kids.

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It’s similar with aged care facilities and retirement homes. You don’t invest the enormous amount of money required to set them up unless you expect long-term strong demand for the services of the facility.

These facilities are for people who have spent significant portions of their lives in Mackay. Many of them will have families, adult children and grandkids who are still in the region and nearby.

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Just like the decision to build childcare centres, you only invest in them if you have done your research and strongly believe that there is going to be continuing population growth that will sustain your investment for many years to come. You don’tinvest if you think the city is heading for a decline in activity and population.

It’s a great vote of confidence in Mackay. The city has a strong, more diverse economy and offers employment and lifestyle opportunities that attract people from all over the country.

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Coal is still a driver of our economy but most of what we dig up and export is coking coal, which is used to make steel. Iron ore and coking coal creates steel and we have the best coal in the world. We do have a more diverse economy these days, which adds to the confidence.

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As for pubs, several have been extensively renovated and brought to life in the past couple of years. The thing about pubs is that they rely on customers having discretionary income … spare cash that they can spend at the bistro with the family, having a few beers with mates on a Friday night.

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Again, that is a vote of confidence in Mackay’s economy and its future. The evidence is telling the pub investors that Mackay is a vibrant, busy city with a good economy where people make enough money to enjoy the social side of life. Otherwiseyou wouldn’t invest the millions in renovating pubs and bringing them back to life.

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At a time of national concern about the Australian property market, all this bodes well for the Mackay property sector.

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