A number of indicators show that select areas within Northern Queensland, rural Tasmania and the South Australia coast might see price crashes soon. They are joined by a host of other areas where price falls look projected to continue.
Select Queensland tourist towns could be in for more price slides, according to DSR score indicators, with current demand in these markets lacklustre at best.
Real Estate Institute of Queensland-Cairns chair Greg Clyde-Smith says that Queensland’s far north remains one of the softest markets in the country because of a range of factors.
“We have been affected in this area by the downturn of tourism for quite some years. A down in tourism was the start of an economic downturn as well, which has put us a little bit out of sync with the rest of the country,” he says.
Areas in Queensland that look especially unlikely to show capital growth for, arguably, some time to come include Magnetic Island, 8km offshore of Townsville, Daintree, and Mossman – both in the far north of the state.
RP Data figures show that Magnetic Island house prices sank 23% in the 12 months to January, while SQM Research figures indicate a vacancy rate hovering at around 6%. Another sign that demand may be poor in the months ahead is an auction clearance rate of only 11%, suggesting that buyers may be a little reluctant to purchase property in the area.
Daintree and Mossman, on the other hand, have shown decent growth recently. RP Data indicates that both saw 14% prices growth over the three months to January. However, more recent indicators suggest that this may have been a seasonal spike, with vacancy rates especially high – 6.86% and 7% for Daintree and Mossman, respectively. A whopping 6% of all the properties within Mossman are also up for sale – a telling indication that supply may outstrip demand and that prices may be in for large-scale falls.
Outside of Queensland
Other regions across Australia hinting at future falls include Port Sorell, on Tasmania’s Bass Strait coast, and Port Augusta, 322km north of Adelaide.
Port Sorell prices fell 6% in the 12 months to January, according to RP Data, and a sign that this may continue is the fact that 8.36% of all properties within the area are up for sale. With the average property in the area already spending 213 days on the market before selling, the supply-demand situation looks stacked heavily in favour of negative growth. With so many properties on the market, it is unlikely that sellers will be able to negotiate good prices – the average vendor discount within the suburb is at 8% as it is.
John Price of Roberts Real Estate says that one reason for poor demand within this area of Tasmania may be a lack of infrastructure. He believes that there has always been demand for holiday homes in the area, but a lack of schools, shopping centres and other facilities has limited buyer numbers beyond holidaymakers.
He expects this may change within a year. “A primary school is currently being built [near Port Sorell], as well as a community centre and a shopping centre. This flat period for prices may continue for another nine months or so, but demand may pick up when the infrastructure is there,” he says.
Port Augusta, SA, home to a population of about 13,000, may see price falls in the months ahead largely due to slow demand. DSR data shows that houses are currently sitting on the market for 296 days, on average, while the vacancy rate is above 6%, suggesting that there is either an oversupply of properties within the area or that buyers and renters are not particularly attracted to the market at the moment.
MAGNETIC ISLAND, QLD, 4819
Typical value: $315,000
Days on market: 173
Auction clearance rate: 11%
Vacancy rate: 5.97%
Yield: 3.76%
GLENGARRY, TAS, 7275
Typical value: $372,500
Days on market: 221
Auction clearance rate: 25%
Vacancy rate: 4.91%
Yield: 2.79%
Stock on market %: 6.56%
MOSSMAN, QLD, 4873
Typical value: $317,000
Days on market: 137
Auction clearance rate: 22%
Vacancy rate: 7%
Yield: 4.4%
Stock on market %: 6.14%
DAINTREE, QLD, 4873
Typical value: $350,000
Days on market: 137
Auction clearance rate: 22%
Vacancy rate: 6.86%
Yield: 4.4%
POMONA, QLD, 4568
Typical value: $315,000
Days on market: 193
Auction clearance rate: 25%
Vacancy rate: 5.11%
Yield: 4.23%
Stock on market %: 7%
PORT SORELL, TAS, 7307
Typical value: $308,000
Days on market: 213
Vacancy rate: 4.93%
Yield: 3.9%
Stock on market %: 8.36%
PORT AUGUSTA, SA, 5701
Typical value: $252,500
Days on market: 294
Vacancy rate: 6.62%
Yield: 5.11%
MURRAY BRIDGE, SA, 5254
Typical value: $272,500
Days on market: 265
Vacancy rate: 26%
Yield: 4.58%
WONGA, QLD, 4873
Typical value: $350,000
Days on market: 137
Auction clearance rate: 12.5%
Vacancy rate: 7%
Yield: 3.6%
Stock on market %: 3.89%
NEWELL, QLD, 4873
Typical value: $350,000
Days on market: 137
Auction clearance rate: 22%
Vacancy rate: 6.91%
Yield: 5%
