House prices to stay steady

T O W N S V I L L E ’ S m e d i a n house price is expected to remain steady for the next three years as the region continues to struggle with unemployment, according to the QBE Australian Housing Outlook report.

The report, released yesterday, said the Townsville median house price had bottomed out but prices were not expected to start sharply rising until after 2020.

The median house price in Townsville was $ 325,000 in June 2017, which was only expected to rise slightly by 2020 to $ 330,000.

QBE Lenders’ Mortgage Insurance CEO Phil White said Townsville would need to attract more people through job creation to see substantial price growth beyond inflation in the property market.

“Townsville has suffered the most over the 12 months with house prices declining and the consolidation of State and Federal government administration work and a downturn in the resources sector,” Mr White said.

“When we look forward, Townsville provides great opportunity from a house affordability perspective. We do need to see some population growth to see price growth beyond the normal inflation rates.”

The report said Townsville was heavily impacted by a drop in mining investment. The region had also struggled to recover from the loss of other major sources of employment.

“The closure of the Palmer Nickel and Cobalt has also contributed to job losses and the unemployment rate has climbed to 10.8 per cent in the March quarter 2017 while participation rates have fallen to record lows,” the report said.

“This has weighed on population growth and therefore demand.”

According to the report, rental vacancy rates also remain low at 5 per cent as of the 2017 June quarter, well above the balanced market rate of 3 per cent.

Townsville REIQ chairman said he predicted a much more positive outlook and vacancy rates had fallen since the June quarter to 4.3 per cent.

“Once you see vacancy rates tighten you see prices start to push up and more investors to our region and you get more demand and then houses prices start to grow,” he said.

“Investors aren’t going to come in full swing until the vacancy rates are 3.5 per cent and under but when that happens you will start to see price pressure sneak in.”