The Queensland markets doing well (and those looking a bit pale): Terry Ryder
The Real Estate Institute of Queensland (REIQ), unlike its sermonising counterpart in Western Australia, tends not to tell the public what to think about local markets. It just publishes the figures and leaves it to consumers to make their own assessments.
Its latest quarterly Market Monitor is revealing about places that are doing well and those looking a bit pale.
The research figures confirm that Brisbane is rising and that some of the municipalities that make up the Greater Brisbane Area did particularly well in the most latest quarter.
The figures show that regional Queensland has struggled generally over the past five years, but many cities sent out strong recovery signals last year.
That, however, excludes the regional cities saturated by developer excess, like Gladstone and Mackay. And it also excludes the Gold Coast apartment market, which still has numbers that would make a prudent investor cautious.
The REIQ figures suggest Brisbane City (the LGA, not the metro area) house prices rose an average 8.3% last year.
Surrounding municipalities, like Logan City, Ipswich City and Redland City, all rose, but in the 3-4% growth range. But in the latest quarter there were more significant increases, particularly in Ipswich and Logan, suggesting that recent rises in sales activity are starting to translate into meaningful price growth.
On the other hand, unit markets are lukewarm, especially those in the inner-city, subdued by high vacancies. Unit markets in more distant parts of the Brisbane metro area are showing better growth in median prices, notably in the Ipswich, Moreton Bay and Redland LGAs.
The Sunshine Coast has been the best of the regional cities, with a 6.7% annual rise in median house prices. Buderim, consistently the most popular suburb in the region, rose 11% and is one of relatively few Queensland locations which have done well over the past five years (up 25%).
Toowoomba, a regional city we have advocated for several years, is up 22% in five years, including 6.3% last year. Some suburbs rose in double digits.
By contrast, the neighbouring Western Downs region (which includes towns where developers over-built in their efforts to exploit the coal seam gas boom), recorded a 14% decline in its median house price last year. Several towns have very high vacancies, with resources workers accommodated in temporary villages rather than rental houses in the towns.
The Gold Coast numbers are interesting because they contrast the housing markets (which are doing well) with the highrise apartment locations (which continue to stutter).
The Gold Coast City median house price has recorded an annual rise of 6.5%, with a major jump in the most recent quarter. This corresponds with the increase in sales volumes evident over the past 18 months. Most of the markets with the best annual rises are inland housing markets in the Brisbane-Gold Coast corridor, including Helensvale, Ormeau and Upper Coomera (which recorded a 7.4% annual rise in its median price).
But apartment markets continue to struggle. The median unit price for Gold Coast City is still 3.4% lower than it was five years ago. The median price for Surfers Paradise dropped 5.6% last year and remains almost 10% lower than five years ago. Southport’s median is 11.2% lower and Broadbeach remains down 7.5%.
This is what oversupply does to property prices. Keep those numbers in mind when you consider the thousands of apartments to be built in the new mega highrise – and all the marketing hype that will come with it, although most of it will be directed at China.
In similar vein, Noosa’s housing market looks to be showing some growth again but its apartment market is deathly pale. Across the Noosa LGA, the median apartment price remains 8.2% lower than it was five years ago.
At dear old Noosa Heads, that over-rated and ageing beauty queen of Sunshine Coast real estate, the median unit price dropped a further 3.5% last year and is 29% below the levels of five years ago. Repeat, 29% below the prices of 2009.
As I said in a column a few weeks ago, this is Australian real estate’s biggest lemon. Owning real estate there is apt to leave a sour taste in your mouth and bitterness in your bank balance.
The REIQ figures confirm my oft-expressed view that Cairns is back on a growth path, with its median house price up 6% in 12 months and likely to do better this year. Some Cairns suburbs delivered double-digit growth last year.
But central Queensland centres Gladstone and Mackay remain down. Gladstone median house price dropped 11.5% in the past year. But, for those who have owned real estate there long-term, pricing levels for both houses and units remain above those of five years ago, despite the recent declines.
TERRY RYDER is the founder of hotspotting.com.au. You can email him or follow him on Twitter.