Property values are starting to turn around in Gladstone.
THE first signs are emerging of a resurgence in the central Queensland property markets.
Battered by dropping prices in the wake of the resources slowdown the fortunes of areas such as Gladstone, Rockhampton, Mackay and Bundaberg may finally be about to improve.
Property analyst Terry Ryder of Hotspotting believes there are some glimmers of hope for those regions with the first signs visible in dropping vacancy rates.
“The reality is that you are not going to get price growth in a market that has vacancy rate of five or six or ten per cent,’’ he said.
“If vacancies are high then the market is going to be flat in all respects, but when you get the vacancy rates right down, that’s when you get to the point where recovery can happen.
“Of all the central Queensland markets the one that is showing the strongest (turn around) at the moment is Mackay. Vacancies are down, a lot sales activity has picked up and we are starting to see actual signs of price growth there. It is kind of ahead of all those other places that were impacted, Gladstone, Rockhampton, Emerald, the Moranbahs of this world.
“They are all showing positive signs in various ways but the one that is the most ahead and really starting to look like the market is moving into a new growth phase is Mackay.’’
Mr Ryder said there were also some positive signs for Gladstone.
Mackay’s property market is on the way back with it now one of the stronger markets in central Queensland.
“If you look at the prices in the past 12 months most of the suburbs are still massively down on price. But what has improved is their vacancies. They were as high as 12 per cent the middle of 2016 and now they are just a tick above three per cent. They are almost down at that level where we start to see rents picking up again, there has also been uplift in sales activity.’’
Mr Ryder said while less than the peak in 2012, transaction levels had returned to set a “new normal’’ and while not back at boom levels the trend was upwards.
“So you have got vacancies down, sales activity picking up and if that continues we are going to get those prices turning around and starting to rise again in the not too distant future,’’ he said.
Rockhampton was similar with a drop in vacancies, in 2016 it sat at about five to six per cent, and now was between 2.5 per cent and 2 per cent – which was considered fairly tight.
“They actually are well below three per cent which is kind of a benchmark, so that is a positive sign, it (market improvement) usually begins in the rental market. It is about vacancies and then rental activity rises and prices later.’’
“We haven’t yet seen any evidence of sales picking up and pricing is still down, but the first step in the recovery is that vacancy factor.’’
A couple of Rockhampton suburbs are now starting to show positive price growth.
In Bundaberg, Mr Ryder said vacancy rates had increased to four per cent in 2016, but were now quite low at just 1.5 per cent.
“The general vibe coming out of the Bundaberg business community is, it is quite positive. Vacancies are very low now and it’s a market that could promote itself as being very affordable sort of lifestyle area because it’s close to the coast.
“All the main suburbs of Bundaberg have got median prices in the low $200,000s so it’s an opportunity to say things are starting to look good in the local economy, the lifestyle is great the real estate is really cheap and it’s a real opportunity.’’
While Mr Ryders said he would still urge caution for investors in those areas, for owner occupiers central Queensland had great buying opportunities.
“Prices are down, in Gladstone where suburbs which had median prices in the $400,000s now have prices in the $200,000s. Now across the board in Bundaberg everything is like $200,000 and it’s true of Rockhampton and Mackay, the pricing is low.
“If you are buying now before the market really moves into recovery, there is not a lot of competition so you can negotiate from a position of strength and get a bargain and if you are an owner occupier and you’ve got a job and you are living there, then it’s just probably the best of all times really to take that opportunity ahead of future growth which appears to be coming back to those locations.’’
Bundaberg still offers affordable property and many lifestyle benefits.
Improving employment conditions in the regions could be behind tightening in vacancy rates.
In Mackay the unemployment rate as at March 2018 was 4.3 per cent and steadily falling from 6 per cent in June 2017.
Bundaberg’s unemployment rate sat at 9.19 per cent and was lower than the 9.51 per cent it hit in March 2017, while in Gladstone the unemployment rate was 8.03 per cent, down on the previous quarters.
Rockhampton’s unemployment rate of 8.09 per cent was also on the way down from 8.27 per cent in the December quarter.