Regional markets set for revival
Many cities are having a turnaround and that means there are good buying opportunities in those areas but you may need to act fast, Michelle Hele says...
REGIONAL Queensland property markets are starting to make a comeback as the flow-on effects from the resources downturn finally start to ease.
In recent years many of the state’s regional centres dominated lists of areas where investors shouldn’t park their property dollars as values dropped and vacancy rates skyrocketed.
But that has all started to turn around now, according to property analyst Terry Ryder of Hotspotting.
He said for the past several years regional towns with economies focused on resources or tourism alone had struggled. Many were frequent entrants in his No Go Zones report, which listed the areas not to invest in.
In a sign of steady improvements across the board, his latest report does not warn against investing in any of Queensland’s regional towns.
Outside of southeast Queensland, Townsville was the market Mr Ryder liked best.
“If you look at the current statistics it looks quite unattractive because vacancies are still a bit high and in the last 12 months there has been prices going backward, but we are always looking to the future and Townsville has got absolutely massive things coming up in its near future,” he said.
Mr Ryder said there were major infrastructure and property developments under way and the economy had evolved with the expansion of the education sector.
The military economy was another big benefit to Townsville.
“As the resources sector continues its revival, a number of major enterprises are basing themselves out of Townsville and seeking fly in-fly out workers from Townsville, so it is going to get a boost,” he said.
There had also been a revival in the property markets in areas including Moranbah, Gladstone and the towns of the Surat Basin.
“Many projects that were on the backburner are now being brought back on line and new projects are being proposed,” Mr Ryder said.
“We are seeing an increase in sales activity in regional centres like Mackay and Emerald, Dalby ... even Moranbah has had a big uplift in sales in the last six months and vacancies in many of those locations have been dropping steadily.
“Gladstone two years ago had a 10 per cent vacancy, and it has been steadily declining until right now it is probably around about 4 per cent. So it’s still a bit high, but it’s not far off the point where vacancies will be back to acceptable levels and rents and prices will start to rise.”
Mr Ryder said investors still needed to be a little careful with these resources-related markets, which were always a bit volatile and high-risk, but the worst was over for them.
“Anyone who owns property in places like Gladstone, Mackay and Dalby can look forward to better things and some growth in coming years.”
A fresh wave of interstate migration has helped drive demand on the Sunshine Coast.
Real Estate Institute of Queensland figures reveal Noosa was the state’s top performing market in the three months to September, recording annual house price growth of nearly 10 per cent.
During the past five years, Noosa’s median house price has jumped by more than 40 per cent.
Tom Offermann Real Estate principal Tom Offermann said the company ended 2017 with eight sales averaging $5.9 million each.
And he predicted the market would now continue to improve with Noosa the standout performer.
The agency sold a sprawling waterfront home with a drive-through boatshed, two jetties and a boat ramp at 29-31 Wyuna Dr, Noosaville, for close to $11.9 million late in 2017 – a record for the area.
“It’s not just the prestige properties that buyers are targeting,” Mr Offermann said.
“There are good opportunities for buyers at all levels who want to invest or live here.”
According to the latest CoreLogic Pain and Gain report, the number of loss-making sales in Queensland’s regional areas has slowed.
In the September quarter, 92.6 per cent of houses and 90.2 per cent of units in regions sold for more than the owners paid for them.
Ipswich was another region that began to show improvements in 2017 and was tipped to continue improving.
In the past 12 months the region recorded 3731 house sales and 603 unit sales.
According to CoreLogic its median house price has moved into positive territory again, up 0.9 per cent in the past quarter to $343,000. The median unit price also increased by 0.7 per cent to $377,500.
In the September quarter 85.6 per cent of properties sold in the Ipswich council area sold for more than their owners paid for them with a median profit of $63,500 and a total profit within the council region of more than $51 million.
Further north the Fraser Coast chalked up 2410 house sales and 319 unit sales in the past 12 months.
The median house price dropped slightly, down 0.8 per cent to $320,000, while the median unit price rose 3.6 per cent to $259,000.
In Gympie there were 1070 house sales and 70 unit sales in the past 12 months.
The median house price rose in the past quarter by 1.6 per cent to $310,000 and the median unit price was up 4.3 per cent to $240,000.
Bundaberg had 1438 house sales in the past year and 178 unit sales. Its median house price rose 0.2 per cent in the past quarter to $295,500 and median unit price rose by 0.4 per cent to $247,000.