Investors more active
INVESTORS are moving in on Townsville’s residential market, according to local agents and the latest Herron Todd White Property Report.
North Ward Realty principal Tarquinn Watson said that during the past few weeks he had received serious offers from out-of-town investors.
“It’s been in the last four to six weeks that investors have been more serious and making offers,” he said.
“I’ve had one property in that period settle, with the investor purchasing it sight unseen. I think rents are on the increase in the city which is a driving factor and the major projects happening in Townsville as well are making people a lot more positive.”
The Herron Todd White Month in Review October Property Report revealed the average house price in Townsville was $320,000 and the median rent for houses was $360 per week.
“There is a general perception that the Townsville economy has been through the worst and there is a new air of expectation of improvement and consolidation over its immediate future on the back of a strong pipeline of projects under way or yet to commence,” the report said.
“The rental market tightened significantly following the February floods and although it has now eased somewhat, it remains tight, trending at under 2 per cent vacancy, according to our latest rent roll survey.
“We are seeing anecdotally increased investor interest including some investor groups acting on behalf of buyers seeking properties offering good yield returns and capital growth potential,” the report said.
Mr Watson, who is marketing a townhouse at 11/29 Victoria St in North Ward, said he had already received two offers on it from investors in Cairns.
“I have people driving down from Cairns this weekend to view it.
“Investors are looking to rent out the properties or some want to buy now while the market is at the bottom and live in it down the track,” he said.
The Herron Todd White report revealed the unit market was strong for rental yields in the city but houses in the outer suburbs were also a strong investment.
“In the current market, units are generally seeing higher yield returns due to the lower buy-in cost and the trend median rent of $285 per week as at June 2019,” the report said.
“We have seen some evidence of yields over 8.5 per cent being achieved for houses in areas within the 4815 postcode due to the low buy-in cost and the current rent being achieved on the back of the tighter rental market.
“Houses located closer to the city centre are typically showing lower yields due to the higher buy-in cost, however the potential for capital growth in these areas in the shorter term is also more positive.”