Andrew Bell’s Market Update: Gold Coast’s Population Explosion

This week I want to go a little deeper on how the population growth I have been talking about has been impacting on the Gold Coast.

The Gold Coast can only grow in size if it can provide jobs, and so we are always in a Catch-22 situation. In my last couple of eNewsletters I have talked firstly about the strong population growth that is occurring not only in Australia but here locally on the Gold Coast, and also about the $30 billion odd worth of development that is in the pipeline post Commonwealth Games. Both of these factors are interlocked

The growth in our population should be considered in context of a book called Scale by Geoffrey West which shows that there are both economies of scale and increasing returns to scale from the process of urbanisation. The book says: ‘cities are…the cause of the good life. They are the centres of wealth creation, creativity, innovation and intervention. They are the exciting places. They are the magnets that suck people in’. The book goes on further to say ‘Every infrastructure or quality…from total length of railways, to the provision of sewers, to the number of buses needed…is scaled in the same way’. In other words, the bigger the city the fewer things that are needed per head of population. It explains how when a city’s population increases by say 100% it needs to increase a number of things per capita by only 85%.

The book also shows that things like wages and the number of jobs, educational institutions, cafes, restaurants, shops and services etc. are upwardly scaled. The book highlights the bigger the city, the more wages you can expect, the more educational institutions in principle, the more cultural events, the more jobs produced and so forth. In other words, bigger places are more innovative.

Let’s look at the most recent employment statistics highlighted in the recent report by Urbis showing some $30 billion worth of ongoing development. Interestingly, only 1 in 7 jobs or 15% of jobs on the Gold Coast are in the construction and real estate services. Many more people work in the general services industry, totalling 27%. A further 25% work directly in tourism/retail and 20% work in education/health/social services.

Over the past 5 years leading up to February 2018 there has been an 18% increase in the total employment on the Gold Coast. The overall size of the construction/real estate sector has increased by 19% over that period with the number of people employed in education/health lifting by 24%. People employed in services rose by 17%.

Some 52,000 new jobs were created since February 2013 and whilst construction/real estate is important, it accounted for just 23% of these new occupations. Services account for 17%, tourism/retail some 26% and health and education a massive 33%. This is what a growing city does. It creates more employment over a wide range of sectors.

Another recent report out showed that the Gold Coast economy is now some $31.5 billion and is up 15% over the past 5 years. It is the second largest economy is Queensland.

Let’s not underestimate the benefits of the $31.5 odd billion in construction. We see that the strong construction we have had in recent time’s pumps in some $1.6 billion in wages to our city. In fact, for the state of Queensland, the industry contributed $60.8 billion to the gross state product in 2017, creating 207,677 jobs. Over 55,000 Gold Coast locals are directly or indirectly employed as a result of development.

In a recent interview with Channel 9 I explained that the city has now reached an irreversible momentum. Whilst many would like the city to stand still and not grow, it is absolutely critical that our city continues to grow to provide all of the lifestyle choices that the great majority of people want but, most importantly, provides the jobs. And the development industry certainly plays a major role in that.

With the Urbis’ report showing just how large a stream of development is in our pipeline moving forward, we should be confident about the Gold Coast’s future over the next 10 years.

One final point. We have just announced the date for the 2018 Ray White Surfers Paradise Muscular Dystrophy Ball. It is going to be something really special this year. It is on Saturday, 22nd of September and if bookings in the first week are any indication, it is going to sell out very quickly. Over a third of the event has been booked out within a week by all of those who have been to our events before and know it as the best social event on the Gold Coast each year.

For more information please visit the link here or phone Selena Carson 0410 650 185.

Come along as this is going to be a very special Ball this year. A lot of preparation and a lot of work has gone into it, so why not gather some friends and take a table and join us on that night.*

Until I am with you next, stay safe.