Queensland market turning a corner

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The Queensland property market recorded its strongest numbers of house sales in nearly two years, according to the REIQ’s September quarter Queensland Market Monitor.

Over the September quarter, the numbers of house sales increased significantly and were also up 5 per cent compared to the same period last year.

The REIQ always expected a sharp increase in activity in the September quarter as many of REIQ members had reported that buyers were waiting for interest rates to reduce further and for the return of stamp duty concessions on 1 July this year.

Historically, the September quarter is the spring selling season so activity is usually higher than during winter, but it is heartening to see that the numbers of sales is even up on the same period last year.

There was a mix of median price increases and some reductions for major regions over the September quarter but this can partly be attributed to different compositions of sales occurring over the period. For example, if more affordable properties sell, the median house price will also be lower.

In Brisbane, the median house price increased 1.6 per cent to $508,000. The numbers of house sales was also up more than 35 per cent compared to the June quarter.

Brisbane’s market continues to improve as buyers turn their attention to the affordable capital city property prices, as well as the continued strong demand for rental properties which is attracting investors.

The mining areas of Queensland appear to have come off the boil, perhaps due to sharp property price increases over the past 12 months in Gladstone and Mackay in particular, however sales in these regions remain strong.

The top performer of all major regions over the quarter was Mackay, which posted a median house price increase of 4.7 per cent to $445,000. Over the year, its median house price increased 4.9 per cent.

Demand for units and townhouses is also increasing across Queensland as buyers flock to this more affordable type of property.

Across the State, sales of units and townhouses grew by 40 per cent in the September quarter, compared to the previous quarter. The numbers of sales were also up 14 per cent compared to the same period last year.

The data also showed sales increasing for units and townhouses priced under $350,000.
Units and townhouses continue to be a reasonably priced, and also preferable, option for many buyers who want the convenience of living closer to the city while also keeping a lid on their borrowings.

There was a noticeable shift in demand for lower-priced units and townhouses in Cairns and the Gold Coast over the quarter with both regions recording significant jumps in the numbers of sales of properties for under $250,000.

In Brisbane, the median unit and townhouse price increased 0.6 per cent to $405,000 over the September quarter and also recorded a small positive price result over the year ending September.

This is hopefully the start of the pricing turnaround that the REIQ has been anticipating given our property market has been improving throughout the year.

Vacant land market

Compared to the same period last year, the numbers of land sales increased quite significantly in some areas of the State. This was particularly evident on the Gold and Sunshine coasts, Bundaberg, Rockhampton, Mackay and Townsville.

The numbers of land sales in Gladstone actually reduced compared to the same period last year as the available of vacant land becomes more constrained in the region.

In Brisbane, the numbers of sales increased substantially compared to the same period last year, but was steady compared to the previous quarter.

The greatest availability of vacant land in Greater Brisbane continues to be in the Moreton Bay region with North Lakes again picking up the lion’s share of land sales.

Rental market

Rental markets across the state have continued to experience high demand for properties, with vacancy rates tightening even further.

The latest REIQ residential vacancy rates for September show that rental demand has remained strong, with most major regions now posting vacancy rates of 2.5 per cent or less. A vacancy rate of 3 per cent is generally considered to be the equilibrium point of supply and demand.

Recent population data released by the Australian Bureau of Statistics (ABS) shows that net overseas migration increased by 72.7 per cent to 13,519 persons for the March quarter 2012. Combined with net interstate migration numbers trending upwards over the same period, it is then no surprise that vacancy rates have fallen as new residents contribute towards the already pent-up demand seen throughout Queensland.

Population growth has also affected the rental markets of regional centres throughout Queensland. While the economic prosperity that resource projects generate is certainly welcome, there have also been many challenges faced by local communities as a result, such as the demand for housing. Recent developments in the Mackay region have highlighted this fact, showing that changes in resource-based operations can have large and immediate effects on other industries including housing rental markets.

Nearly 100,000 Queensland properties for sale and rent from REIQ accredited agencies are on reiq.com

Ryan Connors is the REIQ’s research analyst