SUSTAINABLE GROWTH AND STABILISATION Over the first quarter of 2015, Queensland’s residential property markets largely continued the trends established in late 2014.
Those areas where improvements have been consistent, continued to show solid results and the areas where the market has been flat or struggling now look to be finding their feet.
Integral to all regions have been major infrastructure projects, which have provided much-needed economic stimulation and underpinned recovery.
The Gold Coast sales activity will quieten heading into the winter months but the lift in construction and tourism industries provided some buoyancy in the first quarter of 2015. The same can be said for the Sunshine Coast and Cairns, with all three regions recording continued solid results.
Investor activity did increase across the state, however it was not as pronounced in some regions as many had anticipated. Australian Bureau of Statistics figures reveal dwellings financed for investment purposes were at a five-year high.
The downturn in regional centres hasn’t been good news for some, however it has represented opportunity for first home buyers.
On the Fraser Coast, where the local council offers its own incentive scheme, first-home buyer activity is said to be strong. Major centres such as Mackay, Rockhampton and Gladstone are seeing a pick-up in activity where affordable house prices combined with low interest rates are helping many first home buyers make the decision to move from renting to buying.
ABS figures for the March quarter also show an improvement in first home buyer finance, however levels still remain well below the long-term trend.
The metropolitan Brisbane house market continues to lead the way with the shortest days on market and lowest vendor discounting.
However, Toowoomba has now taken over the Greater Brisbane region as the state’s fastest selling major regional centre.
Toowoomba’s sales activity may be levelling off for the moment, however, the garden city’s local economy is likely to continue to improve thanks to a diverse range of industries underpinning the local economy. And when the economy does well, real estate activity does well.
With a lift in activity at the affordable end of the market, median sale prices were down somewhat across the Greater Brisbane region, with Brisbane’s median price falling below $600,000. After the surge in prestige sales over the December quarter, it came as no surprise that the affordable market would steal the spotlight for Brisbane this quarter
On the Gold and Sunshine coasts sales activity was relatively stable with steady growth in their respective median house prices. Both regions recorded increases of above six per cent in their annual median house price, indicating prices are beginning to lift.
The state’s resource centres are starting to see a light at the end of the tunnel with Gladstone, Rockhampton and Mackay agents reporting stable conditions and hints of lift in sales activity.
While there is still a long way to go before the market picks up again, local agents in each region feel a corner has been turned.
Local council efforts in Mackay and Gladstone are also aiming to diversify their respective industries knowing it will help scaffold the future growth of their regions. In Rockhampton the improving beef industry is giving the region a much-needed confidence boost.
While the house market took a breather in many parts of the state, a number of unit and townhouse markets recorded increased sales activity.
Most notably Greater Brisbane’s Logan, Moreton Bay and Redland City recorded strengthening sales activity, as did the Gold and Sunshine coasts.
In regional areas Townsville was a standout performer, however, this may be more of an indication of investors offloading their properties and being unable to wait out the current downturn. As a result a shift in property prices is occurring, and a similar trend is being seen in Gladstone.
The consequence of this is that median sale prices in a number of regional centres have eased and average vendor discounting rates have increased.
Although the unit market in Cairns has struggled on the back of high insurance and body corporate fees, local agents report renewed investor interest, namely at the affordable end of the market, which bodes well for the region.
Regional Queensland’s vacancy rates are incrementally improving, while the southeast corner - the Gold Coast, Brisbane and the Sunshine Coast - powers on with healthy-to-tight market ratings.
Good news for investors as at the end of March 2015 with a small drop recorded in vacancy rates in Mackay, Gladstone and Rockhampton.
Likewise, investors on the Sunshine Coast, Gold Coast and Brisbane continued to enjoy tight vacancy rates, ensuring the best opportunity for return on investment.
On the Gold and Sunshine coasts continued tight conditions in rentals are due to two groups of investors at work – those who are selling to owner occupiers, thus reducing rental stock, and those who are buying properties which then adds to rental stock. The net effect of this activity is that vacancy rates remain static.
In Brisbane local agents say first home buyers are beginning to become more active, contributing to a softening of rental demand as they leave the rental market for their first mortgage. Investors are also becoming increasingly more active adding to supply and we anticipate that we will start to see a softening of Brisbane’s rental market over the rest of the year.