Industry numbers showing the slowing pace of capital growth across most markets in Australia would lead to the assumption that the housing boom is over. Some markets in Queensland, however, continue to thrive and are defying the overall weakness in the property market.
InvestorKit head of research Arjun Paliwal said Australia’s property market outlook is far from weak.
“Our outlook remains positive; however, one should not confuse a positive outlook for a market where everything continues to grow by more than 20% per year in almost every city — those times are over and are not sustainable,” he said.
Mr Paliwal said these five Queensland markets continue to show promising outlook:
1. Townsville
Townsville’s sales and rental market are experiencing high pressure due to demand.
Quarterly house prices in this market rose 0.3% while total listings fell 5.4%.
Meanwhile, rental vacancy rates are at their lowest in more than 15 years, resulting in rents rising by 7.9% in over 12 months.
Over the past 10 years, rents have also grown 11%, at higher rate than the area’s price growth.
“Interest rates increasing are unlikely to make this market unaffordable as its decade price growth average is weak — growth can occur without stretching locals,” Mr Paliwal said.
2. Toowoomba
House prices in Toowoomba increased by 3.6% over the past quarter as listings also fell by 2.6%.
In terms of rental performance, rents increased by 11.1% in the market over the past year on the back of vacancy rates reaching crisis levels.
“Toowoomba is firing on all cylinders. It has low supply, high annualised price growth, low vacancy and a strong pipeline of jobs and economic activity in a city offering an affordable lifestyle,” Mr Paliwal said.
3. Ormeau-Oxenford
Ormeau-Oxenford’s sales market is also under strong pressure, with house prices rising 10.5% over the past quarter and listings declining 4.6%.
Its vacancy rate is also low at 0.3%, the tightest in more than 15 years. This has pushed rents by 23.4% over the year.
4. Rockhampton
Sales volumes are starting to decline in Rockhampton, slightly increasing discounting rates. However, it still posted a 7.9% growth in house prices and a 2.1% decline in listings.
Rents in Rockhampton are also on an uptrend, up 10.5% over the last three months as vacancy rates sat at 0.3%.
5. Bundaberg
Pressure continues to mount in Bundaberg, where house prices increased by 10.9% over the quarter. At the same time, total listings increased by 1.5% — despite the increase, the market’s total supply is well below pre-pandemic levels.
Rents are also rising in Bundaberg, up by 14.3% over the last year.
“As an investor, this can lead to a high rental yield of 5.4% — strong growth is expected to continue.”
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Photo by Sean O’Brien from Pexels.
