Queensland unit prices falling

Gold Coast unit and townhouse prices have fallen 2.7% to $355,000 in the March 2011 quarter, leading an overall easing of prices in south-east Queensland.

Median unit and townhouse price in Brisbane fell 1.4% to $395,000, while on the Sunshine Coast the median unit price decreased 2.1% to $350,000, according to Real Estate Institute of Queensland’s March report.

Figures compiled by Colliers suggest the outlook for Gold Coast apartments is stronger than that of Brisbane.

By the end of March 2011, 1,334 Gold Coast apartments were available for sale, with 2,665 apartments have received development approval, and a further 2,300 awaiting approval. 

In comparison, the supply of available apartments in Brisbane rose to 2,553 at the end of March, the highest on record, with Colliers noting a softening in demand over the previous six months. Colliers estimates that 4,334 apartments are likely to be released for sale over the next 12 months.

“The underlying fundamentals of the Gold Coast property market remain steady going into 2011… The northern area of the Gold Coast is showing particularly strong population growth, which should have a positive long-term effect on property markets,” Colliers says. 

Looking at Brisbane, the Colliers report says the market could be “adversely impacted by rising interest rates and increasing vacancy in the medium term”. 

“Whilst the vacancy rate for the inner-Brisbane apartment market is currently only 3.1% per cent, there is a substantial volume of investor stock completing and a large number of apartments are expected to be released for sale over the next 12 months. These factors will have a noteworthy impact on vacancy and limit the potential for significant rental growth in many locations,” it says. 

Areas to buck the trend of declining prices, according to the REIQ, were Toowoomba, the Fraser Coast, Rockhampton and the Townsville region – attributed to the construction of new unit or townhouse developments, or the sale of more expensive existing stock, in these areas during the period. 

Rockhampton and Townsville both recorded median price increases of 4.5% during the March 2011 quarter. Higher-priced unit sales in Yeppoon boosted Rockhampton, while sales in new waterfront developments in North Ward and South Townsville underpinned that region’s result during the quarter.

For the region as a whole REIQ agents are witnessing a significant drop in demand compared with the same period last year, creating a strong buyers’ market. 

REIQ chairman Pamela Bennett says many sellers have had to be “very realistic about what price they can achieve in the current conditions if they want to make a sale”. 

In the three months to March, the number of preliminary unit and townhouse sales in Queensland decreased 15%. 

“The unit and townhouse market has been impacted by lower numbers of first-home buyers and investors, who are the type of buyers usually the most interested in this more affordable segment of the market,” Bennett says. 

“First-home buyers continue to languish at about 15% of the Queensland residential property market, while investors appear to have adopted a wait-and-see approach until a clearer picture emerges on interest rates and the economy.  

“The prestige market is also struggling, with the number of preliminary sales of units and townhouses for more than $1 million across Queensland dropping about 40%, compared to the December quarter.”