Regional Building Approvals; no joy for the North

The release of the regional building approvals data by the ABS today allows us to update our Conus Trend series for the SA4 and Local Govt Areas.

What we find is a story of slightly weaker, but generally stable, approvals in the North. The Cairns SA4 region sees Trend approvals stable at 77 after June was revised down from 80. Townsville SA4 falls slightly to 79 after June was revised up from 78 to 80. The picture at the LGA level is similar.

Cairns Regional Council (incl. Douglas Shire) fell to 53 after June was revised down from 56 to 54. Cassowary Coast Regional Council was stable at 6 after June was revised up from 5, Tablelands Regional Council (incl Mareeba Shire) was stable at 18 and Townsville City Council was also stable at 72, although June was revised up from 68.

The full Conus Trend data set is available for download below. Please feel free to use this data (for non-commercial use) but we would appreciate yoy acknowledging Conus when you do so.

Conus Trend Regional Building Approvals QLD – Jul 2017

The Cassowary Coast Budget…a closer look

The Cassowary Coast Regional Council brought down their 2017-18 Budget earlier this week with a 1.65% general rate increase and balanced budgets projected into the future. Much was also made of the Council’s decision to pay off some $19 million of debt early to become debt-free as of this year. What has not perhaps been so well publicised is the fact that the 2016-17 Budget, which had been forecast as balanced, looks likely to have registered a $3.5 million deficit as a result of that decision.

Looking at the actual expected result for 2016-17 compared to the Budget last year we see that Revenues are slightly higher (approx $700,000)  while Expenditures are approximately $4,200,000 higher. When we look more closely we see that the reason for the difference is $3,600,000 more finance costs paid to QTC; presumably early repayment fees incurred when the debt was repaid. So while the Council has indeed become debt-free it comes at a cost.

Running down the cash reserves to pay off the debt has two counteracting effects. Firstly it reduces the amount of interest payable by Council in future years, but secondly it decreases the interest earned by Council on those cash reserves. Using the 10 year projections in the Budget we see that the combined effect of the reduction in interest paid will be approx $7,700,000 over the decade. However, we also note that projected interest earned falls by $4,000,000 over the same period. When we add the $3,600,000 early repayment costs incurred this year we can see that over the decade the net effect is virtually zero. In addition it’s worth noting that the 2017-18 Budget projects the Council to borrow approx $4 million by the end of 2018-19 rising to just under $11 million by 2022-23; the Council won’t be debt-free for long.

Let me be clear, there is nothing wrong with making this decision. But we should be clear that over the long term it really does nothing for our financial position (indeed in the short term the upfront early repayment fee actually costs us; things don’t balance out until the end of the decade). In addition we should be aware that while Council is debt free for now, its own Budget projections have that situation lasting only a couple of years.

Census and the Cassowary Coast….the rise of the Sikh

Today sees the major release of the 2016 Census data and gives us our first glimpse into what the Census can tell us about our own region.

When we consider the Cassowary Coast Regional Council region we see that total population has increased by just 3.8% since 2011 to 28,726 (still below the magic 30,000 level).

If we dig somewhat deeper we can look at the numbers for the 3 SA2 areas which (approximately) make up the CCRC region; Tully (which includes Mission Beach and Cardwell), Johnstone and Innisfail. Here we see a very different picture across the region; Tully is up 4.6% since 2011, Johnstone up 4.8% but Innisfail up just 1.7%.

The indigenous population has grown significantly faster over the period (up 7.9%) and therefore the percentage of total population that is indigenous has risen to 9.7% (from 9.4%).

Across the nation Australians have become less religious in the past 5 years and that is reflected in the Cassowary Coast. Those stating no religious affiliation have jumped from 18% to 24% while those identifying as Christian have fallen from 69% to 60% (of those the largest number are Catholics who account for 29% of the population; down from 33% in 2011). Sikhism has seen something of a jump to just over 2% having not even been counted in 2011. Islam accounts for less than 0.1%.

Given the shift in religions it is perhaps not surprising to see that the most commonly spoken language (other than English) is now Punjabi; in 2011 it was Italian.

The spread of the internet continues apace and we now see 74% of homes connected to the internet (although this remains well below the State and National average of 83-84%); it was 67% five years ago.

The 2016 Census is available on the ABS website.

Dept of Employment data confirms improvements in the Far North

Last week saw the release of the Dept of Employment Small Area Labour Market data for the March quarter. This series is based on ABS data as well as Centrelink and Census data and is the only reliable source of unemployment information at a Local Government Area level. However, the SALM series is based on a very different methodology to the ABS Labour Force survey data and as such cannot be compared directly to the ABS (or Conus derived) series.

Unfortunately the data is also only presented on a 4-quarters smoothed basis (i.e. the average of the previous 4 quarters) and as such is extremely lagged and slow to respond to changes in the underlying data. We have therefore been working on trying to tease out some more timely data signals from this series. We have done so by dis-aggregating the 4-quarters smoothed data to create derived quarterly numbers which we have then trended. The resulting Conus Trend SALM provides us with a far more timely indicator for labour force at a LGA level than we have previously had.

So far we have adopted this technique only for our own local LGA areas (Cassowary Coast and Cairns) as well as Townsville City Council, but aim to expand the coverage as resources allow.

The original SALM data shows the unemployment rate in CCRC falling from 7.6% to 7.1%. The Conus Trend SALM is less dramatic (largely because it started recognising the improvements earlier) and sees unemployment fall from 7.2% to 7.0%. Trend employment is up 633 over the course of the past year.

In Cairns Regional Council the original SALM has the unemployment rate falling from 7.1% to 6.7%; a similar story emerges from the Trend SALM with it down from 7.0% to 6.8%. Trend employment is up 3,680 over the year.

In Townsville the original SALM data continued to weaken with unemployment rising to 10.8% from 10.7% with employment down more than 5,000. However, as readers of this blog will be aware, we have been seeing clear improvements in the labour market in Townsville over recent months. These improvements are better reflected in the Trend SALM data where we see the unemployment rate stable at 10% but Trend employment up 1,760 over the year.

Regional Building Approvals improve slightly in the North

Today saw the release of the March regional building approvals data from the ABS at both SA4 and LGA level. Following the (very) modest improvement in the Trend data at a state level last week (see here for details) we have seen a similar story emerge in the Far North.

Starting with the SA4 level data we see the Cairns Conus Trend improve to 77, after Feb was revised up from 71 to 75. Townsville fell very slightly to 70, but only after Feb was revised up from 67 to 71.

At the Local Government level we also see improvements. Cairns Regional Council (incl Douglas Shire) improved to 49 (Feb revised to 47 from 40). Tablelands Regional Council (incl Mareeba Shire) dipped to 18 (Feb revised up from 18 to 19). The Cassowary Coast Regional Council was unchanged at 6 while Townsville City Council was also unchanged at 67 (although Feb was revised up to 67 from 62).

Looking at the split across the State we see that this generally positive move in the North has occurred in the face of a somewhat weaker picture across the Rest of Queensland.

The full SA4 data set for the Conus Trend series for Queensland is available for download below. Please feel free to use this data (for non-commercial uses) but we would appreciate you acknowledging Conus when you do so.

Conus Trend Regional Building Approvals QLD – March 2017

Little joy for the North in the Regional Building Approvals data

We’ve only now had time to crunch the numbers for the February regional building approvals data (released while we were on holiday a few weeks ago), but it doesn’t provide any joy for the North.

Considering the SA4 regional data first, the Conus Trend series for Cairns shows a slight improvement to 71 (after Jan was revised up from 69 to 70), this is still 35.8% below the level of a year ago. In Townsville the Conus Trend fell slightly to 67 (although Jan was revised from 66 to 68).

The complete data set for the Conus Trend Regional Building Approvals at the SA4 level is available for download below. Please feel free to use this data (for non-commercial purposes) but we would appreciate you acknowledging Conus when you do so.

Conus Trend Regional Building Approvals QLD – Feb 2017

At the Local Government Area level the story is a similar one. The Townsville City Council saw approvals dip to 62 (from 63), a decline of 4.6% for the year. In Cairns Regional Council (including Douglas Shire) the Trend was stable at 40, down 47.5% for the year. The Cassowary Coast was also stable at 6 (although only after Jan was revised up from 4) but remains down 23.8% from a year earlier. The Tablelands (including Mareeba) fell to 18 (from an unrevised 19 in Jan) and is down 21.2% from a year ago.

Regional population estimates show North lagging rest of QLD, Cairns-North still doing well.

The ABS have released their regional population estimates (up to mid year 2016) today and they show the North of the state lagging recent growth elsewhere. The data is provided at the Local Government Area (LGA) level as well at SA2 and above. Taking the LGA data first…

LGA 2016 est annual change % decade change %
Cairns 161,932 +1.0 +22.8
Douglas 11,844 +1.5 +12.5
Cassowary Coast 28,721 +0.1 +0.4
Tablelands 25,054 +0.3 +7.9
Mareeba 22,029 +0.9 +17.5
Townsville 195,914 +1.0 +22.8
QLD 4,843,303 +1.4 +20.8

While Cairns and Townsville have outpaced QLD growth over the past decade, that out-performance has now ceased with growth just 70% of the state average in the past year. The Cassowary Coast has finally returned to positive territory (although only just!) while the Tablelands Regional Council area has also been weak.

If we break the Far North (i.e. Cairns SA4) data down even further we can see quite a diverse range of outcomes across the region.

SA4 SA3 SA2 est change annual % change decade %
Cairns     246,110 +0.8 +17.3
Cairns-North 53,709 +1.7 +31.2
Brinsmead 5,666 +0.7 +8.9
Clifton Beach – Kewarra Beach 11,642 +2.1 +40.5
Freshwater – Stratford 4,058 +1.0 +10.5
Redlynch 12,733 +1.3 +35.0
Trinity Beach – Smithfield 13,216 +3.2 +60.4
Yorkeys Knob – Machans Beach 6,394 +0.6 +5.0
Cairns-South 104,790 +0.7 +20.1
Bentley Park 8,458 +0.2 +50.4
Cairns City 11,203 +1.3 +31.7
Earlville – Bayview Heights 8,721 +0.5 +4.1
Edmonton 11,224 +1.2 +35.8
Gordonvale – Trinity 8,890 +0.5 +28.3
Kanimbla – Mooroobool 10,184 +1.4 +15.1
Manoora 6,172 -0.1 +5.9
Manunda 5,450 +0.1 +3.6
Mount Sheridan 8,706 +0.2 +18.5
Westcourt – Bungalow 7,012 +1.0 +23.0
White Rock 4,887 +0.3 +22.6
Whitfield – Edge Hill 8,580 +0.3 +2.4
Woree 5,303 +1.7 +25.5
Innisfail-Cassowary Coast 34,843 +0.1 +0.4
Babinda 4,134 -0.5 -5.1
Innisfail 9,534 -0.2 -1.3
Johnstone 7,704 -0.7 -0.3
Tully 10,779 +1.1 +2.7
Yarrabah 2,689 +0.1 +9.0
Port Douglas-Daintree 11,787 +1.5 +12.4
Daintree 6,277 +0.9 +2.5
Port Douglas 5,510 +2.3 +26.3
Tablelands (East)-Kuranda 40,981 +0.5 +12.7
Atherton 11,050 +1.0 +15.5
Herberton 5,706 -0.4 +3.0
Kuranda 4,766 +0.3 +25.9
Malanda – Yungaburra 8,306 -0.2 +2.3
Mareeba 11,153 +1.1 +19.3

Cairns North, and in particular Trinity Beach, Clifton Beach and Redlynch, has been the stand-out growth area over the past decade, with Trinity and Clifton Beach still growing faster than average last year. In the south, Edmonton and Gordonvale have seen rapid growth over the past 10 years.

Outside of Cairns, Port Douglas has done well over the decade and continues to outperform the region as a whole. In the Cassowary Coast the only area to see growth at all over the 10 years was Tully (which includes Tully, Mission Beach and Cardwell) with the areas around Innisfail all falling. (Although Yarrabah is in the Innisfail-Cassowary Coast SA3 it is not in the Cassowary Coast Regional Council area. Babinda, likewise, is in the Cairns Regional Council area.)

Small Area Labour Market data shows solid improvements in Far North; declines in Townsville

Friday saw the release of the Small Area Labour Market (SALM) data from the Dept. of Employment; and it was good news for the Far North and bad for Townsville...again.

The SALM data is based on a range of indicators including ABS Labour Force data for the SA4 areas, Youth and Newstart allowance data and the 2011 Census data at the SA2 level. As such this series cannot be directly compared with the ABS unemployment rates at the SA4 area level (or the Conus Trend series which is derived from that data). The data is presented on a smoothed basis where the series is smoothed over a four quarter basis to remove regional volatility.

For the December quarter we saw the unemployment rate in the Cairns Regional Council area drop from 7.8% to 7.1%.  The SALM data showed a total of 1,129 more people employed over the quarter with the Labour Force growing by 624 people.

In the Cassowary Coast the SALM unemployment rate also dropped (to 7.6% from 8.3%) with 187 more people employed than in the Sept quarter. Digging deeper into the CCRC numbers we see the unemployment rate in Innisfail fell to 11.6% (from 12.6%), in Johnstone it dropped to 5.9% (from 6.5%) and in Tully (which includes Mission Beach and Cardwell) the decline was to 5.7% (from 6.3%). The marked difference between the unemployment rate in the north and that in the south remains very much in place.

Our own Conus Trend for the Cairns SA4 (which includes both CRC and CCRC areas along with the Tablelands, Douglas and Yarrabah) stood at 5.9% for December and has been stable since. Given the smoothed nature of these quarterly numbers we would expect to see the March quarter show further falls in the unemployment rates for CRC and CCRC.

Unfortunately, to our south in Townsville, the data merely confirms the weaker story we’ve been talking about for some time. The SALM unemployment rate jumped to 10.7% (from 9.7%) with 1,761 fewer people employed. The Conus Trend unemployment rate for Townsville SA4 fell slightly over the three months to January (11.8%) so we can hope that we have already seen the worst for the region and the March SALM data might be somewhat improved.

Residential Building Approvals dive in the North

The decline in Trend residential building approvals in QLD reported last week (see here) means that a similar fall in the North was to be expected. However the declines in both Cairns and Townsville are still larger than we might have hoped for. The original, unadjusted data from the ABS is highly volatile and we therefore prefer the Conus Trend series to paint a more understandable picture.

In Townsville City Council the original approvals data for January has fallen to an all-time low (since records began in July 2004) of just 21. This sees the Conus Trend drop to 55 (while Dec was revised lower from 64 to 59). Trend approvals now stand at 12.2% lower than a year ago.

In Cairns Regional Council (in which we include Douglas Shire Council for historical consistency) original approvals data was also weak at just 25 (lowest since Jan 2013) and saw the Trend drop to 38 (after Dec was revised down to 41 from 47). Trend approvals now sit 50.7% lower than a year ago.

In the Cassowary Coast Regional Council the original approvals sat at 7 which left the Trend stable at 4, which is 47.1% down from a year ago.

Even the Tablelands Regional Council area (which includes Mareeba Shire Council for this data set) was weaker in January despite being the brighter light in previous months. Trend approvals fell to 19 in Jan (from a downwardly revised 20 in Dec) on the back of original data showing just 12 approvals. The Trend now sits 18.5% below a year ago.

At the SA4 level a similar picture emerges in our region. Townsville sees the Trend drop to 60 (after Dec was revised down to 65 from 67), while Cairns falls to 63 (from an unrevised 67 in Dec).

Nevertheless, as a whole, regional Queensland has fared somewhat better than Greater Brisbane (where the collapse in unit approvals has been most acutely felt).

The full set of Conus Trend data for the Queensland regions is available for download below. Please feel free to use this data (for non-commercial purposes) but we would appreciate you acknowledging Conus when you do so.

Conus Trend QLD Regional Bldg Apps – Jan 2017

Land values in Cassowary Coast drift lower

The 2017 Valuer General’s report sees Cassowary Coast land valuations updated (last done in the 2015 report). The Report notes that..

“The residential markets in Cassowary Coast have been variable throughout the region. The agricultural sector is generally strong with high commodity prices, particularly within the sugar and grazing industries, being a major driver in the property market. Farming land values have generally increased over the last 24 months as sales volumes have picked up. This is offset somewhat by uncertainty within the banana industry due to biosecurity concerns relating to Panama disease. The tourism market is still slow and confined mainly to the driving holiday

Residential values have generally softened in the town of Innisfail, as well as in smaller coastal and hinterland localities such as Wangan, Mourilyan, Mundoo, South Johnstone, Silkwood, El Arish and Kennedy. Values have generally remained unchanged in the coastal localities of Mission Beach and Wongaling Beach, whilst South Mission Beach, with its oversupply of vacant allotments, continued to show a drop in value. In the southern Cassowary Coast townships, such as Tully and Cardwell, values have generally been stable.

Commercial, industrial and multi-unit lands have generally mirrored the residential trend in Cassowary Coast townships. Values have softened for premium sites within Edith and Rankine (sic) streets, Innisfail.”

In terms of averages, the median residential valuation has declined by 9.3% since 2015 to $68,000 while rural-residential is up 2.7% to $113,000.

Overall across the region valuations are down 0.3% since 2015. The total value of primary production land has increased by 25.1% to $335 million since 2015.

Townsville also got revalued this year and saw median residential values decline by 2.1% to $143,000. The Report notes..

“The Townsville property market has been impacted by high unemployment, high rental vacancies, and a downturn in the mining sector, which has created a relatively subdued market. This is tempered however by returning confidence associated with project announcements such as, the North Queensland Stadium and allied Priority Waterfront Development Area, the Elliot Springs development, and services associated with Singaporean military expenditure. As a result of these forecast events, market conditions have stabilised along with steadying sale volumes and median sale prices.”

As always, when we see land valuations released there will be confusion about the impact this will have on peoples rates bills. Declines (or increases) in land values will not, off course, necessarily impact on the level of rates payable since Councils will simply adjust up (or down) the cents in the dollar rate to maintain budgeted General Rate income. However, if individual land valuations are significantly different to the average change in a particular Council then owners can expect to see their relative rate burden either go up (where their land has appreciated more than average, or gone down less than average) or go down (where their land has depreciated more than the average decline, or appreciated less than the average rise). In either case it is highly unlikely that anyone will see their General Rates actually fall!