Developers fly south from Queensland with cranes

IN Joh Bjelke-Petersen's day, the crane index was heralded as a simple measure of Queensland's economic prosperity and health.

IN Joh Bjelke-Petersen's day, the crane index was heralded as a simple measure of Queensland's economic prosperity and health.

Now the lack of cranes on the Brisbane skyline is causing several of the state's best-known developers to look to Victoria.

While the strong movement of people into southeast Queensland that has fuelled the state's economic growth will continue, developers cite a lack of confidence in Queensland as one reason for looking south.

In the coming year, Queensland is forecast to have 27,000 housing starts, while Victoria is expected to have 47,000.

For most of the past two decades, up to 50,000 people a year have left other states to settle in Queensland's sun. In 2003, just over 40,000 people did so. But in the year to June 30, interstate migration added only 18,000 people to Queensland.

Developer David Devine has been heavily involved in the two growth areas of southeast Queensland construction: inner-city towers and broadacre developments. He's one of Queensland's best-known builders, yet he is quietly shifting his operations from Queensland to Victoria because, as he says, Victoria represents a better market.

"There's a simple reason for this: a house-land package in Victoria is about $70,000 cheaper than it is in southeast Queensland," Mr Devine said.

"Land in Queensland is being punished by very high headworks charges compared with other states. It's been getting worse over the past few years and there's no sign of it getting better."

Devine said that most of the extra charges were coming from local governments but the state government wasn't doing anything to rein them in.

One of Mr Devine's big projects in Brisbane was Admiralty Quays, which was sold out before it was completed in 2000. But recently Devine had to abandon an inner-city tower when he had trouble getting finance from the banks.

It was one of four buildings within Brisbane's CBD that have been either delayed or scrapped as a result of the tapering off in demand. Among these is the proposed 79-storey Vision building, where troubled developers Austcorp are still searching for overseas funding, leaving a gaping hole in the middle of Brisbane's CBD. "Victoria's fared a lot better than Queensland," he said. "It's got a manufacturing base, and Queensland has got tourism and mining. They're a lot more positive in Victoria than in Queensland."

Other property industry identities are singing the same tune. Watpac managing director Greg Kempton said his company was "re-weighting" its activities to have less in Queensland and more in Victoria.

"It's an issue of confidence," Mr Kempton said. "Everyone's suffered because of the global financial crisis, but there's a lot more confidence in the market in Victoria than there is in Queensland. It's starting to return in Queensland but it's not strong yet."

The crane index in Brisbane, which five years ago stood at 44, now is only three.

The index started in the days of Bjelke-Petersen when he refuted bad economic news by pointing to the number of cranes on the Brisbane skyline. Former premier Peter Beattie was also fond of using cranes as an economic indicator.

Master Builders Queensland director of housing policy Paul Bidwell said stimulus packages from both the state and federal governments were keeping the construction industry going, and 2010 would be another tough year for residential builders. But he stressed that the long-term outlook for southeast Queensland in particular was still strong, driven by the strong levels of population growth.

"In a sense, the Queensland market has been overheated for a few years and running very hot, so that while the GFC hit everyone, places like Queensland, which were very active, got hit harder," Mr Bidwell said.