Low investor activity in Gladstone's stabilsing property market: HTW

Gladstone has very little investor activity in the market at present compared to three to four years ago when investors were pretty much the only buyers in the market, says Herron Todd White's latest report.

The valuation firms November review suggest the demand for accommodation in association with the construction of the multi billion dollar LNG plants was the highest Gladstone had ever seen.

However the market has been declining, significantly in some sectors since the peak in 2011 and 2012, says the HTW report.

"In 2015, there has been a general stabilisation of the market for existing established housing.

"Sales activity has spiked at various times throughout the year as prices are now much more affordable.

"Most of this activity has come from owner occupiers or local investors out for a bargain."

The HTW report suggests the unit market has been the hardest hit in terms of value with most values now approximately 40% to 50% less than their value in the peak.

"There were over 900 apartments and townhouses built during the boom.

"This market is unlikely to improve in the medium term future.

"Most of these units were marketed towards investors and the new APRA guidelines are likely to further stagnate sales and possibly lead to further value reductions.

The month in review suggests new construction activity is very low.

"Gone are the days of house and land packages being marketed to investors.

"The packages are still being marketed, however the uptake is much slower.

"While many believe the residential market in Gladstone has hit the bottom, there are a few important factors which may say otherwise."

There are still approximately 7,000 workers on Curtis Island finalising construction of the LNG plants according to the report.

"Approximately half of these are locals who within the space of 12 months will need new employment in a region that is already struggling.

"Vacancy rates continue to rise, currently sitting at approximately 8%.

"Demand is limited in certain market sectors."

The HTW report concludes by saying that these items coupled with APRA’s new guidelines regarding investment lending indicate that Gladstone could be in for a bit more hurt in the future.