The first quarter of 2015 saw the Townsville residential market record continued steadying conditions. Sales activity continues to remain subdued, while time on market also remains steady for both house and unit listings.
According to local agents the Townsville region continues to struggle to find its feet with confidence and the current business climate resulting in inconsistent activity overall. Volumes are said to be there but the market is yet to see much improvement.
Similar to what is being seen in Mackay and Gladstone vendors who have held onto their properties for the longer term are achieving positive results whilst those who are selling within five years of ownership are struggling to sell at a profit.
With minimal investor activity, first home buyers in Townsville have some breathing space and with prices now more affordable, many are said to be taking the plunge. Meanwhile local agents say its only a matter of time before upgraders recognize the current interest rate environment and affordable house prices is a good time to make the move.
However the balance of 2015 they say, will essentially be continued subdued conditions as many vendors continue to wait out the bottom of the market.
While Townsville looked to be on the road to recovery with an upswing in house sales over the September quarter last year, the following six months saw the Townsville market return to more patchy conditions.
Over the March quarter house sales numbers dropped further by 9 per cent, while the median house price remained relatively steady, down just 0.7 percentage points to $350,000. Over the year to March however, the effect of the slower market is more evident with the region’s annual median down 1.4 and 4.1 per cent over the one and five years respectively.
Local agents say its not all bad news with prime, wellpositioned property are seeing consistent results, whereas secondary stock is taking longer to sell.
Whilst average vendor discounting for house sales has nudged down further to 8 per cent, average days on market have remained relatively steady at around 90 days.
Over the March quarter, Townsville’s unit and townhouse market saw an increase in activity predominantly within the sub-$250,000 and sub-$350,000 price points.
This improvement in activity however is largely on the back of softening prices, according to local agents, as many vendors have to accept a price lower than they paid. It is likely that it is this segment of the market that is behind the increase in average vendor discounting for unit sales, up 0.4 percentage points to 9.4 per cent over the year to February.
Over the year to March some suburbs such as Cranbrook and Douglas recorded an increase in sales activity, two of Townsville’s more affordable suburbs for units and townhouses.
In Townsville, ongoing unemployment levels continue to have a negative impact on the rental market, with the vacancy rate up 1.2 percentage points since December, to 5.9 per cent at the end of March.
According to local agents, the region continues to have an oversupply of rental properties, with tenant demand remaining weak on the back of a slow local economy. In a bid to keep vacancies to a minimum, agents are said to be keeping their landlords informed on the current state of the market.
While this is resulting in a softening of asking rents, median rents according to the RTA have only come back around $20 compared to 12 months ago.