As the beef capital of Australia, Rockhampton is perhaps better known for its steaks than its property market. This has changed in recent years however, with a number of new residential apartment blocks going up along its riverfront.

These units, fuelled by a low supply in the middle of town, offer a lifestyle not previously seen in the historic regional centre. And in a city that has traditionally had many more houses than units, based on figures from CoreLogic RP Data, the new blocks have been well received by buyers.

One of the main developers has been a local, Andrew Beaumont, whose familiarity with Rockhampton helped him see untapped potential in the Central Queensland town a decade ago. Beaumont says that while property in ‘Rocky’ might not achieve the capital growth of larger cities, it’s supported by a balanced economy with large rural, health and education sectors, and this produces a constant stream of tenants.

"We got into apartments on the river about 10 years ago because there was a clear undersupply and we saw potential for more lifestyle type of living," says Beaumont. "I don’t think it was ever presented here. So we did 14 three bedroom apartments on the river and we sold that complex and went straight into another one."

Meeting the market

Sensing ongoing demand, Beaumont and his development partner, Wayne Riddell, set about providing more residential blocks to the city's broad workforce, as well as its downsizes. They have typically catered to different tenants by offering both residential and short stay hotel-style units in the same complex. The latter are commonly called dual-key apartments and allow single spaces to be shared by two tenants.   

This has proven to be successful strategy because it’s attracted a broader base of people than you might otherwise get in a regular unit block. For example, The Edge building, which includes 84 dual-key apartments and 36 privately owned units, sold out quickly in 2009. Like other complexes along the river, it’s also close to shops and cafes and has its own restaurant on site.  

New buildings like this also align with the city council’s program to revamp Rockhampton following recent cyclone damage to the area. The program focuses on upgrading the city to make the central business district a more attractive urban environment. This is why most of the recent development has been on the river, extending along Quay Street between Fitzroy and William Streets.

In many major cities, such a project would generate multi-million dollar price tags for new units along the water, but Rockhampton is home to a modest population of about 83,000 people, which means the new apartments can be sold closer to the city's median unit price ($470,000 on the year to March, as per CoreLogic RP Data). 

Steady as she goes

Managing director of property firm Knight Frank, in Rockhampton, Pat O’Driscoll says the steadiness of the market and the underlying demand for a certain type of accommodation is what makes the new apartment blocks work.  Knight Frank has been involved with most of the buildings in a project management capacity, from the selling of the land, right up to the design, build and marketing. 

"There’s a hum starting to evolve within this precinct because you’ve got people around," says O'Driscoll. "You’ve got a mix of demographics and with that is coming a plethora of restaurants. With that there’s choice. There are activities, there’s vibrancy now.  

"When you get industries that are growing like the health sector in Rockhampton, there’s a growing need. And as these areas grow and people are employed, we see Rockhampton becoming more diversified."  

Beaumont says that the temporary workforce, which includes miners, has also boosted demand. However, he distinguishes Rockhampton from other Queensland mining towns such as Gladstone or Mackay because it’s not reliant on mining alone.  

"We’ve had success and stayed here because we’ve got a really strong rural sector west of Rockhampton – the beef capital of the country,” says Beaumont. "We’ve got really good health and education, and so it has all the basics and keeps ticking over.   

"All of our sales are from buyers within a 400 kilometre radius. They’ve shown really good returns. Over the years, they’ve also shown good capital growth because we don’t’ have an oversupply. I think that a long as supply is kept at a balanced level there’s continuing demand for the right product."

O’Driscoll notes that the number of apartments per block is usually in the range of just 60 or 70 and this has been an important factor in maintaining supply levels.

Two sides to every market

While the riverside units have been selling well, director of property research firm and buyers’ agency Hotspotting.com.au, Terry Ryder says that overall prices in Rockhampton have been falling during the past couple of years. He therefore puts the city in the same category as most of Central Queensland, which has been trending down from an investment perspective.  

"Rockhampton is caught up in the general market malaise afflicting Central Queensland, where the resources downturn and overbuilding by developers have combined to create high vacancies, which means rents and prices have fallen," says Ryder. "Vacancies throughout Rocky are generally 4 to 5% - not as bad as Gladstone or Mackay, but too high to create growth."  

Of course, the numbers can differ on property types and across various city locations. For example, any price or rental growth in Rockhampton’s suburbs, such as Parkhurst or Kawana, might be different from centrally located property along the riverfront, where there may be specific demand.   

"The city doesn’t have the high highs but it doesn’t have the low lows either,” says O’Driscoll. “We’ve had some surges but never screamed to ridiculous heights. We’ve had lovely increases but it’s just nice, steady and constant.  

"When things go the other way, we have the same thing. It might come off the boil but it doesn’t go through the floor. It just settles down for a period."

Rockhampton by the numbers

Location: Central QLD, 620 km north of Brisbane

Population: 83,000 approx.

Median unit price: $470,000 (CoreLogic RP Data)

Median rental yield for units: 2.89% (Real Estate Investar)

Overall vacancy rate: 4.6% (SQM Research)

By Jean-Paul Pelosi