The Toowoomba housing market has been on a strong upward trajectory for the past five years, but with median prices and sales data now levelling off, is that rising growth trend about to change?
Toowoomba’s median house price of $355,000 is almost 1 per cent lower than this time last year – small fall, but still, a fall.
Toowoomba’s median unit price is 6 per cent higher than it was 12 months ago, but is 2 per cent down on the December quarter.
One of Toowoomba’s standout characteristics has been its strong growth in demand for apartments, with steady sales over the past five years pushing the median price ever upward.
Last year when unit prices around the southeast corner were softening, Toowoomba continued to grow and even in the March quarter of 2017 is a hefty 29 per cent above its 2012 price of $139,500.
So, what lies ahead for the Toowoomba market?
Well, the factors behind the growth are clear – this is a market that has had significant infrastructure spend, both private and public.
At the REIQ Summit last year, keynote speaker John Wagner said one of the flow-on effects after the Wellcamp Airport broke ground, was the uplift in business confidence throughout Toowoomba.
“Business owners started to invest in their own business, spend money that they hadn’t spent before, because they could see what we were doing was going to be good for the whole region,” he said.
Mr Wagner said the community’s optimism palpably lifted and retailers got busier.
While the airport has completed, new jobs can be found in the $1.6 billion Second Range Crossing beginning this year, and also in the Gore Highway Interchange and other road projects about to commence.
However, even with jobs still to be found in the area, demand for houses is slipping. The number of sales in the March quarter fell by 2.4 per cent, from 551 sales in September to 538 in December. Preliminary data shows a larger fall in the March quarter.
The days on market are lengthening, from 44 days to 54 days (for the 12 months to February 2017).
Broadly speaking, conditions remain very favourable for home ownership in Toowoomba. The median house price of $355,000 is among the most affordable markets in southeast Queensland. Interest rates remain at historic lows and unemployment in Toowoomba is 5.6 per cent (according to the Department of Employment to May 2017). This is lower than the state’s average of 6.2 per cent.
Taking these small data factoids into account, the bigger picture remains one of unbridled enthusiasm. The $500 million QIC Grand Central redevelopment is transforming Toowoomba’s central district.
The recently federally funded inland rail project will link Toowoomba and Brisbane to the southern markets, creating greater freight and passenger efficiencies for business and trade.
Toowoomba LGA’s population in the 2016 Census was 160,000 people and forecasters predict that will grow to 230,000 by 2030.
Home ownership is popular in Toowoomba and according to 2016 Census data:
- 3% owned outright
- 4% owned with a mortgage
- 5% rented
This market has good economic fundamentals underpinning the region – a diverse economy that is not reliant on a single source of income, positive forecast population growth, strong jobs growth with major infrastructure projects underway and still to come, as well as excellent schools (Toowoomba Grammar, a GPS school, and Downlands College are generally considered to be elite educational institutions with many distinguished alumni as well as highly regarded academic and sporting curricula).
It is unlikely this market will falter in the short to medium term and our view is that the real estate market is a safe bet for steady sustainable growth into the future.