KEY POINTS:
A gasometer frame - heritage-listed and restored as a reminder of what used to be - sits at the apex of an arrow of development thrusting down from Brisbane's Central Business District (CBD), through the former vice centre of Fortitude Valley and on to the Brisbane River.
The gasometer, last remnant of a polluted wasteland and first used by the Brisbane Gas Company in 1885, sits on the site of an A$800 million ($935 million) urban redevelopment project that underlines the refocusing of Queensland's capital on a river that for decades was little more than an industrial waterway.
A river walk is stretching progressively along its banks, now lined with prestigious new homes and restored woolsheds that reach out to the mouth, where two years ago then-Premier Peter Beattie opened an A$750 million cruise terminal wharf complex.
Incorporating homes, restaurants and shops, the terminal opened Brisbane to the booming cruise ship market - two liners are home-ported there in an industry worth more than A$240 million a year - and spurred the continuing transformation of the river.
Upstream, on the other side of the CBD, another apartment complex is being built on the site of long-derelict coal-fired Tennyson power station, linked to the new State Tennis Centre due to open in time for the Brisbane International in January.
For many years considered a Cinderella among Australia's big cities, Brisbane is now reinventing itself with this series of massive development and rejuvenation projects.
The skyline of the CBD has been rapidly changing as Queensland's booming resources sector pumps billions of dollars and thousands of jobs into the state economy, flowing down through the once-seedy streets of Fortitude Valley.
The Valley, infamous for its role in the corruption that led to the 1980s downfall of Sir Joh Bjelke-Petersen's conservative government, is now humming with new nightclubs, bars, restaurants and residential and commercial developments.
Along the river, developments are squarely aimed at people with money.
"For years we used to argue that the capacity to pay has always been present in the Brisbane market," says Matthew Wallace, Mirvac chief executive, development, Queensland.
"There was a lack of evidence to support this view, but only because the standard of product worthy of commanding prices considered appropriate for the better suburbs of Sydney and Melbourne had never been offered here."
But the city has not escaped the bite of the global financial crisis.
Analysts say applications for new development have fallen markedly since August, with deferrals rising and suggestions that some major projects could be put on hold or scrapped.
Metcap Developments has already axed its planned 65-level Empire Square tower, despite significant sales of units priced at up to A$1 million, although the downtown Elizabeth St site was rapidly bought by national developer Amalgamated Property Group.
The immediate future of some City Council and State Government projects may also be reconsidered as the financial tsunami keeps washing over Australia.
Across Brisbane, the Bureau of Statistics' September quarter house price index recorded a 3.3 per cent decline.
The Housing Industry Association warned that restrictions on the availability of capital were placing constraints on the supply of new housing, particularly for higher-density development.
But HIA chief executive, policy, Chris Lamont said relative to other investment types, housing continued to do very well.
"A chronic undersupply of new housing, conservative lending practices and population growth mean that Australian house prices in an aggregate sense are unlikely to see the same turbulence affecting other investments," he said.
Mirvac's Wallace is also confident of strength in Brisbane's development: "It is reasonable to expect that some of the more ambitious projects incapable of being staged, particularly where sites have been acquired in recent times, might struggle to remain commercially viable.
The positive impact of this, though, will be that there will be a dramatic decline in available stock in the supply chain.
"We expect prices to improve in the middle to upper ends of the market under these conditions as buyers in these market segments are still capable of obtaining credit."
Strong fundamentals also continue to underpin the Queensland economy.
The State Government's financial report for 2007-08 recorded annual growth of 5.1 per cent, a 34-year low in average unemployment of 3.7 per cent, and the creation of 60,000 new jobs.
Treasurer Andrew Fraser said that while Queensland was not immune from the global turmoil, the state was buffered by an A$809 million surplus.
Although some aspects may be delayed, massive spending is also planned for the city's infrastructure, pushed by growth expected to add 180,000 people to its population over the next 20 years, and growing interest from domestic and foreign investors.
Present infrastructure plans include an A$17 billion overhaul of the CBD, an A$3.4 billion tunnel and busway link to the airport, spending A$1 billion on other road, bridge and tunnel projects, and A$100 million on bicycle paths.
On the river, Mirvac is continuing with its Newstead Riverpark development on a 10.6ha site at the foot of Fortitude Valley, staging the construction of about 640 apartments in a complex expected to raise total project revenue of A$1 billion.
Two other developers, FKP and Watpac, will add smaller, adjoining projects including shopping, leisure, office and commercial space.
Mirvac's project, Waterfront Newstead, will be built on land that required more than seven years of litigation-bedevilled remedial work on a "moonscape" of polluted land and thick mangroves choked with tarred roots.
The group traded increased public space - including 5.5 ha of parkland and lake - for higher density development, allowing a maximum height of 30 stories.
The first stage, "The Pier", was released in June, with prices for its luxury three- and four-bedroom apartments starting at A$2 million and soaring to a Brisbane record price of A$14.25 million for its largest penthouse.
The release of the second stage has yet to be announced, but was scheduled for the middle of next year before the financial crisis broke. This will include a mix of two-, three- and four-bedroom apartments, starting at A$800,000 to A$900,000.
Upriver, Mirvac is nearing completion of the State Tennis Centre, in conjunction with its A$650 million Tennyson Reach development.
The first stage, released in July last year, sold out at prices ranging from about A$940,000 to A$4.8 million. The second stage of 92 apartments is selling for A$828,000 to A$3.5 million.
Wallace says the river is key to Brisbane's rejuvenation: "In 1988, Expo bought a renewed focus on the river for Brisbanites, and ... since, it has been the catalyst for the cosmopolitan development that has largely transformed the city."
Greg Ansley is the Herald's Australia correspondent. He travelled to Brisbane courtesy of Mirvac.
