MERC Musings

Welcome,

Recent discussions with Agents was highlighting some significant shifts in the market place for Queensland so I have spent the last week interviewing trusted Agents on their specific market place with comparisons against last year. The dot points below are as they are seeing it today and the statistics you will read at Christmas. Over all a mixed response with mining being the local economic saviour, low stock levels wedging the slide and more stringent finance requirements impacting on some markets.

I consider it as possibly our first look at an appropriately balanced market since the introduction of GST

Greater Cairns

• Top end, being $1,000,000 or above is doing reasonably well.
• These are being purchased by southerners seeking a life change and locals up grading.
• Resort stuff is unbelievably tough
• The mid-market of $400,000 - $700,000 is not moving and probably back by 15%
• Transaction numbers down and still going down
• Permanent letting vacancy improved significantly and down to a 2.5% vacancy rate
• A development in Port Douglas was selling apartments 3 years ago for $895,000; they are now asking $595,000 for the same apartment.

Townsville

• Lower end has come off about 10 - 15%, as has the unit / apartment market
• $300,000 - $450,000 market is not too bad
• $450,000 - $1,000,000 is tough and the top has slowed noticeably
• Transaction numbers are constant
• Stock levels are still low and probably keeping values up.
• Pricing is important

Mt Isa / Cloncurry

• Buyers are more selective and rarer
• The mooted resource super profit stopped the market dead and it is only just bouncing back from that.
• Many contracts were cancelled after the announcement
• It is a buyers market and price sensitive
• Stock levels are balanced
• No investors for about 18 months
• Average marketing period for an appropriately priced home is 60-100 days
• Finance is a struggle
• Noticeable emigration for employment with significant numbers to WA

Mackay

• Probably the hot spot of Queensland is Dysart about 2 hours inland where two new mines are opening up.
• If you had your home rented for the last six months at $500 per week and the lease has come up for renewal, you will now get between $1,000 - $1,200 per week!
• There is nothing for sale and it is being driven by investors.
• This is having a rippling effect on Mackay but it is not as hot as it was a few years ago.
• The market is being driven by significant numbers relocating for employment and is probably a reasonably balanced market across all sectors.
• There is still good building activity and new subdivisional work occurring.
• The proposed super resource tax stopped everything for about 3 months when proposed.
• Prices are steady.

Rockhampton

• Lower end has been down for the last 10 months
• Sales volumes are down
• Investors are quiet
• There is still some positive sentiments through mining
• Top end is reasonable
• Many investors looking to sell and are prepared to accept capital losses but most are putting their properties back into the rental pool as they can't carry them vacant for too long and they aren't sold.
• Pries are generally flat and off 5%
• Rentals are strong
• Probably one of the more normal markets in the last 10 years

Greater Bundaberg

• Appears to have weathered the storm reasonably well and probably bottomed out in January 09
• Since July has been doing nicely
• Lifestyle properties are hard but much better than 3 years ago
• Bargara has quite a bit of development going on (4 - 6 storeys) but has come off recently.
• Coral Cove is still terrible
• Bundaberg units and apartments are selling well.
• Lots of investors from the mines around Rockhampton, Emerald etc.
• There are $1,500,000 apartments selling to southerners relocating
• Stock levels are high
• Employment in the agriculture / food sector is excellent
• Good levels of housing construction occurring, with much of it driven by the public housing stimulus funds

Maryborough / Hervey Bay

• Upper end is quiet
• A price sensitive market that is selling if priced right.
• Hervey Bay has too much stock in the middle market
• The rental market is oversupplied and is now coming under increasing pressure as there is a significant amount of public housing about to come into the market via stimulus funds.
• Generally the market has bottomed with no expectation of short term growth.

Noosa / Sunshine Coast

• Absolute glut of units that are near impossible to sell
• Houses are off 10%
• The Australian dollar has kept the NZ winter buyers away
• Tourism numbers are down
• High numbers of vacancies.
• Significant number of retailers are closing down
• Locals are emigrating for employment
• See attachment

Maroochydore / Sunshine Coast

• Less buyer enquiry
• Prices down 5%
• Houses around $500,000 are selling
• $1,000,000 apartments are really struggling
• Rental market is good
• Stock levels are low.
• Very little construction due to anti-development stance of the newly formed super council

Caboolture

• Prices are down
• Market is fairly ordinary, however the last run was very strong and very long.
• Stock levels are still low
• Rental market has come off, rents are down and there are a number of investors selling.
• The water / canal blocks around Bribie are really struggling with sellers resisting the market forces.
• Overall lack of confidence

Inner Brisbane

• Extremely slow and the more expensive, the slower the market
• Stock up 20%; sale numbers down 50%
• Units are the main culprit with sales price equivalent to those of 3-5 years ago
• The $600,000 - $750,000 house is selling, but mainly to relocations
• Only a smattering of investors
• Extended finance periods are required

SE Brisbane

• Lots of cautious buyers who are waiting for the market to get worse
• Stock levels up
• Still selling but off 10-20% on last year in values however last year was exceptional
• Noticeably less first home buyers and investors
• Transaction numbers are down
• Asian immigration and those families up-sizing are what is driving the market
• Over all a reasonably balanced market place

Greater Ipswich

• Market is quiet but better than 3 months ago
• Transaction numbers are very low
• Stock levels are up
• Prices have retreated about 10-15%
• Agencies are closing or amalgamating with sales people moving to different industries
• Vacant land is quiet
• Significant number of contracts are falling over due to a finance approvals being declined.
• Rents are holding up as investors are selling
• Lockyer Valley has exceptionally high stock levels

Toowoomba

• A quiet winter but generally the market is not too bad
• Both stock levels and sale numbers are down
• Very price sensitive market
• Units are tough, especially the older $200,000 or less product
• Rental market is fine
• Over all a balanced market

Dalby

• Improving due to significant industrial developments associated with mining

Robina

• Selling but prices are down
• Buyers are being very tough
• Only motivated vendors are achieving a sale
• First home buyer are buying the cheaper flat / townhouse
• Stock levels are reasonable

Gold Coast

• Luxury apartments and unit market is going backwards and has further to go.
• Most agents are loosing money
• On average the market is off 20%
• There are towers in Surfers where sales are still lower than the "off the plan" prices of 2002/03.
• Hinterland housing up to $600,000 is alright
• Coomera investor / first home buyer market has come off
• Hope Island top end is very quiet and will be for a while

If this was of value I will probably do NSW next month!

Robin.

The material contained within this document is intended as a guide only. No liability or otherwise is assumed for the material contained herein either by Merc, its principal, or its servants and agents. No material herein shall form the basis or be part of any agreement and no warranty is given or implied as to the accuracy of any part of the material. All opinions are of a personal view.