Has the tide started to turn in Queensland? According to the latest lending finance figures from the Australian Bureau of Statistics, it appears that investors certainly think so, says Real Estate Institute of Queensland (REIQ) managing director Dan Molloy.
“In some much-needed good news for our property market, investors are again starting to take an interest in Queensland,” he says.
“The latest ABS lending finance figures show the number of investment dwellings financed in Queensland over the June quarter increased by about 16%, with investors now accounting for 30% of the market.”
He adds, however, that recent stock market jitters, both at home and overseas, have impacted the already fragile confidence of Queensland’s homebuying community.
“The number of buyers active in the Queensland marketplace is still well below long-term averages and until there is more certainty surrounding interest rates and the global financial landscape generally, this circumstance is unlikely to turn around before next year,” says Molloy.
Certainly the figures suggest that Brisbane is still a market where buyers are able to bargain hard, with recent REIQ data recording a quarterly median price decline of 1%, and a flat 12-month growth figure of 0% in the state capital.
Vacancy rates increase
Vacancy rates are also on the up as the effects of this year’s floods become less apparent in the Brisbane market.
REIQ figures show that the vacancy rate in the Brisbane Statistical Division rose by 0.4% between March and June, to hit 2.7%.
Brisbane city, however, still remains relatively tight at 2.1% (up from 1.8%), while its inner ring saw no change, remaining at 1.6%.
Redcliffe was the one area to record a tightening of its rental market, with its June vacancy rate of 2.8% representing a significant drop from its March figure of 4.6%, indicating that this is one area which is attracting an increasing number of tenants.
On the regional scene, Gladstone continues to be the Queensland property market’s shining light. REIQ figures show an impressive median price increase of 6.1% over the quarter, and 10.8% over the year, to June 2011.
“The multibillion-dollar investment in Queensland’s resources industry in the central Queensland region is again behind Gladstone’s strong performance,” explains REIQ chair Pamela Bennett, who adds that this market strength is starting to radiate out to both Mackay and Rockhampton.
Of the two regions, Mackay has the best growth figures, according to REIQ data, with a quarterly median price rise of 4.4%. Its 12-month median price rise of 2.5%, however, indicates that Mackay still has some way to go before matching up to Gladstone’s growth spurt.
Raine & Horne Mackay principal Ian Jensen, however, believes that Mackay’s close proximity to the resource-rich Bowen Basin will underpin massive population growth over the next five years, which should in turn put increased pressure on property prices.
“The Bowen Basin is home to a massive coal deposit, and this is attracting workers to the area, as evidenced by the fact that the town has grown by 3,000 people in the last 12 months, to a population of 119,000,” he says.
“Projections indicate that by 2016, the expected population of the Mackay Regional Council area will be between 134,000 and 143,000.”
And while Rockhampton’s 12-month growth figure was just 1.5%, sales figures suggest that buyer activity is on the up, with the number of preliminary sales increasing by 23% on the previous quarter’s tally, according to REIQ data.