Falling vacancy heralds recovery
Jobs key to rising housing markets
SOARING median house prices in cities like Sydney could prompt an exodus to regional centres like Townsville if job security concerns can be allayed, valuers Herron Todd White say.
HTW Townsville director Jason Searston said Townsville’s affordability compared with capital cities was certainly a good marketing tool.
“When you are cashing out in a booming market and coming to one that has been grounded, there is significant potential to capitalise on that,” Mr Searston said.
“However, I think job security is paramount. You are not going to cash out without having something to go to.”
Property reports this week indicated Sydney’s median house price had topped $ 1 million, surpassing London, where the equivalent median was about $ 900,000.
The Sydney median increased HOUSING vacancy rate data shows regional centres are moving slowly towards a recovery, according to the Real Estate Institute of Queensland.
The institute’s CEO, Antonia Mercorella, said regional Queensland continued to struggle to find its feet following the resources downturn but some of the hardest hit were now entering a stabilisation phase.
“We can see those towns, where employment rates are stronger and opportunities are greater, that the rental market is recovering more quickly,” Ms Mercorella said.
The institute said Townsville’s vacancy rate had dropped by 0.6 22.9 per cent to $ 1,000,616 in the year to June.
By contrast, Herron Todd White’s Townsville in Focus report says the city’s median house price has fallen 5.4 per cent to $ 342,500 in percentage points to 5.3 per cent at the end of June after a spike in vacancies at the end of March.
“Unemployment is still a major issue for the region.
“However, with a new school being announced in the ( state) budget and the continued stabilising presence of government employers such as the Defence Force, Townsville seems to be headed in the right direction.”
The vacancy rates for the other major regional markets in Queensland were: Cairns 2.7%, Bundaberg 4.6%, Gladstone 5.2%, Mackay 9.1%, Rockhampton 6.0% and Toowoomba 3.1%. the year to March. “Our general impression is that ( Townsville) house values have stopped declining but that buyers are not straying outside their comfort zones and have lowered their aspirations, only buying properties they regard as affordable based on their current economic circumstances,” the report says.
Mr Searston said there was no doubt that growth in capital city prices in the past had been a driver of regional markets.
However, he said uncertainties in regional markets, particularly related to the downturn in mining, was also a big factor.
“One would anticipate that affordability issues that are being experienced would have to, at some point, cause people to consider a move to a more affordable location,” Mr Searston said.
The HTW report says the median price for established units has also dipped, falling 11.2 per cent to $ 227,900 in the year to March, while the median for new units increased marginally to $ 332,500 on thin volumes of sales.
It says the median price for blocks of vacant land has remained within a band of $ 155,000 to $ 160,000 for the past four years.