Soft Rockhampton property market ripe for buyers in $500,000 range: HTW

Property markets in Queensland’s Rockhampton and surrounding areas have softened over the past 12 months and possibly present some of the best opportunities in years, say valuation firm Herron Todd White in their July 2016 residential market report which takes a look at properties in the sub-$500,000 range.

“While not the best news for potential sellers, owner occupiers and investors will get more bang for their buck than ever. As always though, buyer beware!” say HTW.

An investor looking to park $500,000 in Rockhampton would be weighing up a modern (say five to 10 year old) four-bedroom, two-bathroom home in the northern suburb of Norman Gardens which would fetch a rental between $450 and $500 per week against an older three- or four-bedroom Queenslander, gable style home on the Range on the southside. Both styles of home would appeal to owner-occupiers and investors alike and are desirable suburbs providing good amenity and proximity to schools and the CBD. Investors would be looking at a gross yield of 4.5 percent to 5 percent. 

There are plenty of options in the early $300,000s up to $400,000 in the suburbs of Berserker and Kawana in north Rockhampton where you will find some well-presented three- and four-bedroom homes achieving yields of 4 percent to 5 percent. 

“Doing your research is key in these areas. Vacancy rates have been on the increase over the past 12 months. While still 5.5 percent to 5.7 percent, this is a steady increase from the lows seen in the golden years of the mining and gas boom.” 

Potential buyers should be wary of outer areas of Rockhampton such as Gracemere and Mount Morgan where supply has well and truly exceeded demand. Vacancy rates have been on the rise over the past 12 months and are now sitting at around 8.5 percent. The number of days on the market has also increased significantly. 

The Palaszczuk government’s announcement to increase the First Home Owner’s Grant from $15,000 to $20,000 for newly constructed homes (valued less than $750,000) for the next 12 months is likely to result in some increase in construction activity in the area and will provide a lifeline for some of our struggling tradesmen. However, it also has the potential to detrimentally impact vacancy rates with increased stock in the long term. 

Capital growth is unlikely in the short to medium term in the Rockhampton region. Despite record low interest rates there is still a lot of uncertainty in the camp particularly around job security. It appears there is little joy on the horizon to drive the market in any forward direction. We anticipate rents will remain at. There is likely to be a lot of fence sitting as punters wait for the dust to settle from the outcome of the federal election. 

As an illustration of the property market under $500,000, Property Observer found a two-bedroom apartment at 402/6 Victoria Parade, Rockhampton City that sold recently for $443,500.