The property investment bonanza that has been going on in Gladstone is on the verge of coming to a dramatic end, warns one of the country’s largest property groups.
New research by PRDnationwide suggests that the Gladstone region, which has enjoyed phenomenal growth over the last few years, can no longer sustain its rate of exponential growth.
PRD pointed out that while the median house price continues to strengthen, sales volumes have been down, suggesting the market could be peaking.
“The lack of affordable house and land is driving sales volumes back down, exacerbated by unprecedented rental growth which continues to inflate values,” said PRD analyst Robert Matta.
PRD research found that the number of house sales across the region fell by 27.3% from the March 2011 half year period. Land sales also fell, seeing a 48.9% slump in volume.
Matta said there were several projects that were active at the moment and some in the pipeline, but said the problem is that few of these projects are delivering stock at realistic prices.
He anticipates that once affordable housing stock enters the market, median prices will correct and sales volumes will regain traction. “Property developer Devine has a project in the works that is likely to ease the housing shortage in the Gladstone region and alleviate price growth pressures,” he said.
The estate has been approved for 2,900 homes, two shopping centres and a new school. It will be located in Benaraby, approximately 20km south of Gladstone City.
“This represents both good and bad news for the people of Gladstone City – depending on what side of the fence they sit,” Matta said.
“The good news is that developments like this are likely to entice would-be investors and perhaps first-home buyers to snap up an opportunity they could not previously have afforded,” he said.
“The bad news, for developers, investors or those who have recently paid a premium to live in the area, is that rental vacancies may increase in the market, with rents and subsequent prices likely to correct as a result.”
