As local agents had expected, the first quarter for 2015 saw an improvement in the Mackay market with sales activity up across all property types. Sales numbers now appear to be levelling out, with the trend in sales activity hovering around the 200 preliminary house sales mark for four consecutive quarters.
In a bid to improve Mackay’s current economic climate, the local council is said to be helping Mackay diversify into other industries such as tourism, education and health.
Local agents say that whilst prices have seen a correction back to pre-boom times, the Mackay real estate looks to be in a position of stability with the outlook for the balance of 2015 much brighter than it was this time last year.
Given the softening of property prices and an abundant supply of listings, first home buyers are becoming more active, as are some astute investors who are taking advantage of the affordable prices.
Following a dip in activity over the December quarter, the Mackay house market made some ground back with an increase of 18 per cent in sales activity over the March quarter this year. With an improvement in sales activity in the $500,000-plus price point, Mackay’s median house price was up 4.1 per cent.
House sales in the sub-$350,000 bracket are said to be achieving the most positive results for vendors with the reappearance of first home buyers in Mackay.
Indicative of the current state of the market however, the region’s annual median is down 6.9 per cent compared to the previous year.
House listing numbers over the year to February have levelled out however according to local agents there still remains in oversupply. As such current active buyers are in no hurry to make a decision which is behind the extended average days on market which has blown out to 103 days. Average vendor discounting likewise has pushed out further to over 10 per cent.
UNIT AND TOWNHOUSE MARKET
Unit and townhouse sales over the March quarter also saw an increase in activity with the most improvement seen in the sub-$250,000 price point.
According to local agents, vendors who have held their property for a long period of time are achieving positive sales results. However those that bought within the last year, particularly off-the-plan sales are hurting from the price corrections that are currently taking place.
Over the year to February average vendor discounting has pushed out further than house sales, up 4.4 percentage points to 13.7 per cent – making Mackay the most discounted of all the major regions in Queensland.
Average days on market have also increased, with units and townhouses now taking nearly a month longer to sell than they did a year ago. According to local agents the ongoing costs for strata insurance and body corporate fees is really impacting on this segment of Mackay’s residential market.
Early signs of stabilisation are being seen in Mackay at long last with the vacancy rate coming down 0.4 percentage points to 9.4 per cent at the end of March. Median weekly rents in Mackay have also come down from their peak in late 2012, which bodes well for local Mackay residents, and hopefully the trend seen in Gladstone will also play out in Mackay.
While this price correction may not bode well for investors rental yields, this should help bring the vacancy rate back down to much more healthier levels.
With rental and sale prices softening, the impact on current gross yields hasn’t been as pronounced. Over the year to February 2015, current gross yields for Mackay house rentals were 4.3 per cent, down from 4.8 per cent a year ago. Meanwhile gross yields for units and townhouses has remained unchanged at 4.8 per cent over the year with both rental prices and sale prices softening in relatively equal proportion.