5 o’clock for homes in CQ
Everything is for sale at the right price - valuer reports some astonishing discounts
Wednesday 01 June 2016
The latest report by property valuers Herron Todd White (HTW) has home values in Mackay, Gladstone, Rockhampton and the Bowen Basin all at around five o’clock on the property clock, or in other words, approaching the bottom of the market.
How you view that position depends on where you are standing. If you are an investor who bought during the boom, it’s a disaster. If you’re an investor now - and there are a few entering the market - it might be a good time to buy.
Proof that everything is for sale at the right price, HTW noted some astonishing discounts recorded in Gladstone.
“A part renovated high set home in the established suburb of Kin Kora sold in July 2015 for $410,000, and sold again in March 2016 for $363,000 representing a $47,000 loss (11%) in just under nine months,” they reported.
“A penthouse unit in a medium rise complex fronting the Marina, sold for $1.525 million in 2011 and sold for $810,000 in 2016, reflecting a 47% discount, and an older central suburban townhouse which previously sold for $295,000 in 2011 is now under contract for $75,000, reflecting a 75% discount.”
The collapsing property prices in Gladstone reflect a large oversupply of houses built during the CSG construction boom, and falling demand as jobs associated with that boom come to an end. Recent lay-offs by Rio Tinto - the region's largest employer - have only added to that falling demand.
Housing oversupply has also crippled the Mackay home market over the last few years as the coal sector’s construction boom came to an end. However for the first time in months, HTW did say there were some modest signs of improvement.
“The negativity seen in the marketplace is still evident, with property values still declining in the first six months, albeit at a much slower rate of decline than seen in the past two years,” HTW said.
“On the positive side, we have seen increased sales volumes (although at lower value levels) and the REIQ March Quarter Vacancy Report states that rental vacancies have dropped from 9.3% to 8.1%.
“This is a significant improvement and the lowest vacancy rates seen since 2014, and the downturn in the market has provided opportunities not seen in Mackay in over ten years.”
In towns like Emerald, Moranbah, Dysart and Middlemount HTW says vacant land in selling for as little as $15,000.
“The local resource sector has been relatively stable with no drastic employment or wage cuts recently, and there has actually been some slightly positive news on the horizon, but this has only been talk so far,” HTW says.
“There does not appear to be any possible capital growth in our markets for the foreseeable future, but some purchasers are starting to speculate and are prepared to buy and sit.
“Even a small boom in the resource sector down the track could see some handy capital growth returns for those purchasing in the current market, some say it will definitely happen; it's just a matter of when.”
In Rockhampton, 2016 has proven to be a difficult year.
“We have continued to experience a slowdown in almost all sectors of the market with the overall number of sales reducing and values softening," HTW said.
“ A genuine lack of investors has seen the market relying on local first home owners and young couples upgrading from their first or second home.”