Two-tiered Queensland market as mining towns sluggish
The Real Estate Institute of Queensland (REIQ)’s March Quarter 2014 Queensland Market Monitor has found that a two-tier market has emerged across the state, with the residential market generally showing signs of a recovery. The mining sector, however, is seeing residential activity easing and rents easing.
REIQ CEO Anton Kardash said that the activity is significantly varied across the major local government areas.
“South East Queensland, including Toowoomba and the state’s coastal tourism centres continue to show strengthening market conditions, while the residential property markets in regional mining centres of Gladstone and Mackay have recorded easing conditions,” Kardash said.
The Residential Tenancies Authority saw median weekly rents remain steady in South East Queensland, and tourism centres, but show weaker signs in the mining regions. This has been a continued trend in these resource centres for the past year.
TIGHTENING RENTAL MARKETS
- Toowoomba
- Tourist Centres (e.g. Gold Coast, Sunshine Coast, Fraser Coast, Cairns)
MARKETS EXPERIENCING A SLOWDOWN
- Gladstone
- Mackay
- Rockhampton
“Despite increased investor activity across Queensland, local agents report increased number of sales of former investment properties to owner-occupiers, reducing the overall rental pool in some areas,” he said.
December saw an easing in vacancy rates across the board, however tighter conditions have returned.
“Stronger tenant demand and sales of investor stock to owner occupiers were common theme across the State,” he said.
When looking at the house market, results were also mixed.
Greater Brisbane
- Sales activity remained consistent over the December quarter.
- Increased activity towards the outer regions.
- Median house price down 1.1%.
Metropolitan Brisbane
- Drop of 7% in preliminary house sales numbers.
- Activity strong elsewhere in Brisbane statistical division.
Moreton Bay regional council area: Increase of 7% in preliminary sales numbers over March quarter (most improved sales).
Ipswich and Redland: Both recorded an increase of 6%.
Gold Coast, Sunshine Coast, Fraser Coast, Cairns (tourism centres): Saw growth in median house prices. Sunshine Coast sales numbers (preliminary) up 4% over the quarter. Over the year to march, Gold Coast up 20% on sales volumes. Cairns sales slightly down over the quarter, although up 15% year on year.
“Median house price growth across these four tourism regions has now begun trending upwards following two consecutive quarters of positive results,” said Kardash.
However, when looking at the mining centres the story is almost an exact opposite.
Gladstone and Rockhampton: Sales activity down by more than 10%.
Regional centres, including Toowoomba, Townsville and Bundaberg, saw subdued or steady sales over the quarter, however year-on-year strength. Toowoomba is up 18% over this period.
Meanwhile, units and townhouses are seeing a recovery.
Greater Brisbane council area: Strongest increase in sales activity.
“Unit sales were also strong in the tourism centres, with the Cairns unit and townhouse market recording solid buyer activity in the $250,000 to $350,000 price bracket, contributing to an increase of 15.5 per cent in the region’s median unit sale price to $212,000,” he said.
“The Fraser Coast also posted a significant increase of 22.7 per cent in its median unit and townhouse sale price with strong sales in the $350,000-plus bracket.”
The Gold Coast and Sunshine Coast were also recording a healthy level of prestige unit sales, potentially behind the median sales price growth and overall activity.