Continuing economic improvements have been propping Brisbane up over the last 12 months, especially with the building boom. As a result, “there’s no doubt that the southeast Queensland housing market is performing solidly at the moment,” says Andrew Wilson, chief economist at Domain Group.
“This is true in the Gold Coast in particular, but also inner-city areas in Brisbane are still finding buyers.”
Antonia Mercorella, CEO of the Real Estate Institute of Queensland, says the election caused a slowdown in the market, especially for investors.
“We know from our agents that listings volumes were down and the whole market really just hit pause while they waited for a result in the election, which would give certainty around negative gearing for investors,” she explains.
“Most of Queensland has struggled through this uncertainty and we have seen more markets contract than grow, which, of course, is disappointing.”
Regional houses in demand
In Bundaberg in regional Queensland, the fall in house prices created a situation in which units have become more expensive than houses. In the process, demand for houses has increased in this area since both types of dwellings are similarly priced.
“This is really unusual and it’s a little bit of a quirk of the market – we haven’t seen this in more than 20 years,” Mercorella states.
However, house values in Townsville shot up due to business from confident buyers in market, as well as incoming infrastructure projects.
“A lot more of the middle and upper end of the market has been selling, not just the lower end,” says Brad Matheson, principal of McGrath Townsville. “Now that there are confident buyers out there, there’re a few more properties starting to come on to the market.”
According to the latest data as of October 2016, suburbs within 10km of Brisbane are performing the most favourably. This stays true to historic findings and is attributed to the fact that Brisbane’s properties are very affordable compared to those in Sydney and Melbourne. In fact, Brisbane is now considered by many to be the third big capital of Australia. Moreover, investors buying property here benefit in terms of capital gains and steady rentals.
Nonetheless, Herron Todd White cautions against buying units and off-the-plan properties, many of which are built specifically to attract investors. Detached housing in a good location is the best buy, particularly houses near schools and public transport because they pose the least risk and generally ensure tenancy.
Ups and downs in mixed market
Homes priced at under $500,000 can be found in suburbs further from Brisbane, such as Kingston, Caboolture and Slacks Creek. Older, established houses generate great yields, and the rental market is strong; however, the market generally slows down in the outer ring of the CBD.
Rural dwellings in this state see some demand from buyers who are looking for big properties, but any growth tends to fizzle out quickly. The lack of amenities and the lengthy commutes to the city may be a catalyst for this rapid decline.
“When talking famine market, it is in fact these further flung addresses that struggle most,” says Herron Todd White.
Nonetheless, the implementation of infrastructure projects, such as the QIC shopping centre in Toowoomba, may inspire growth in this area in the near future. On the coast, the top-performing suburbs are those near the beach and other conveniences, including Broadbeach, Benowa, Miami, Casuarina and Burleigh Heads.
Rockhampton is a fairly stable market with a diverse economy, which receives contributions from the education, health and agriculture industries. It suffered a blow due to the decline in the mining sector, which caused investment activity to drop and vacancy rates to shoot up. However, the region is on the road to recovery economically, and this, coupled with the affordability of properties here, could revive investor interest.
SUBURB TO WATCH
Miami: Coastal suburb peaks
Located on the Gold Coast, Miami is a central beachside suburb where locals can enjoy living near the water while being just minutes from Gold Coast City.
The neighbourhood is dissected by the Gold Coast Highway, giving it two distinct sides: homes east of the highway are within spitting distance of the beach and therefore fetch a premium, while those west of the highway can be slightly more affordably priced, despite being only minutes walk from the water.
The house market in Miami reported 12.7% growth in the last 12 months, the median price stopping just short of $700,000. Investors may also favour the unit market because of the high rental returns they can achieve – an average of 5.5%, against a median price of just over $400,000.
Miami is home to Pizzey Park, a renowned sports and recreation facility that surrounds several lakes and provides trails for cycling and walking. The Gold Coast Airport is just 13km south of the suburb.
