Insurers stifle unit market
‘Predatory insurance pricing’ means North has missed the boom
THE lack of a government response to North Queensland’s insurance crisis is being blamed for a unit construction market that is in the doldrums despite huge building incentives.
The North’s relatively affordable housing is also believed to be a factor.
Master Builders has reported a booming home construction sector in Townsville where government stimulus like Homebuilder, record low interest rates and interstate migration has prompted a 123.7 per cent surge in house approvals in 2020-21.
But the multi-unit figures are the opposite – a 43.5 per cent plunge over the past year.
Unit markets in Cairns and
Mackay are also performing poorly.
The Townsville Lot Owners Group, which is pressing a reluctant state government to step up, says it has found that $3bn in value has been ripped out of the North Queensland apartment market because of exorbitant strata title property insurance.
“Because of overpriced insurance costs, Townsville and North Queensland apartment values are falling,” the group’s spokesman Andrew Turnour said
“North Queensland owners and investors are missing out on the property boom being enjoyed by the rest of Australia.”
An $11m apartment project in West End called Percyville is one project that has been delayed by the poor market
conditions. The Sunshine Coast-based developer proposing the project – Grandview Developments – has just gained approval from the council to extend its development approval out to the end of 2023.
Spokesman Gavin Wuiske said while they had plenty of work in South East Queensland, the Townsville market had not fired as they had hoped.
Mr Wuiske said insurance
was an issue but high construction costs, and affordable housing making units less competitive, were also factors at play.
“Most insurers just won’t touch Townsville and the ones that will, it’s double,” Mr Wuiske said.
The lot owners group said unit owners in North Queensland were paying five times the premiums of their counterparts in Brisbane and the Gold Coast at a time when
cyclone and flood risks had reduced.
“This predatory insurance pricing reduces the value, saleability and supply of apartments in North Queensland,” Mr Turnour said.
The group appealed for help from the state government’s Commissioner for Body Corporate and Community Management, Michelle Scott, but she told them she has no authority to intervene in the insurance market.