Queensland Outlook The Queensland property market, while definitely slowing, is still a bit of a mixed bag at the moment, with members in some areas predicting an ongoing strengthening of the market, and others experiencing a slight downturn. One factor remains constant throughout the state – affordability is becoming a major issue due to ongoing interest rate rises and the never-ending supply shortage. In recent media reports mortgage brokers said nearly two per cent of would-be first-home buyers in Queensland will turn their backs on the property market, if there is another rate rise by the Reserve Bank. This situation will only worsen as more predicted rate rises come into play. The survey of First National’s Queensland members has shown 44.4 per cent of respondents saying the number of people being forced to sell as a result of mortgage defaults had increased. Investors currently account for an average of 10-20 per cent of overall sales of survey respondents. For the remainder of 2010, a third of respondents said they expected investor activity to increase by up to 10 per cent in the majority of cases (80 per cent), and more than 20 per cent for 20 per cent of respondents. Only about 10 per cent of respondents expected a decline in investor activity in the coming six months. Interest rates are expected to increase by all respondents, but by varying degrees, between 0.25 per cent up to 1 per cent by the end of the year. For the second half of 2010, sales are expected to increase by 50 per cent of respondents, after 83.33 per cent experienced a decline in the first half of the year. Based on recently released figures, the Sunshine Coast and the Gold Coast are the worst performers in the state in terms of having the lowest growth in median house prices – 21 per cent and 25 per cent respectively. However, given the strength of the market over the last few years, these markets are still considered quite strong. Rockhampton is considered the strongest performer among the major city markets with its median house price doubling in five years. Gladstone (up 70 per cent), Townsville (up 62 per cent) and Mackay (up 61 per cent) also showed significant growth. But it is the smaller regional centres that recorded the highest growth over the past five years, including the municipalities of Banana, Burdekin, Charters Towers, Hinchinbrook, Isaac, Longreach, Maranda, Mount Isa and Western Downs – all of which recorded growth that saw median house prices at least double in five years.
First National Real Estate 2010 Property Outlook Mid Year Update 21