Queensland regional housing markets on the rise

Queensland’s major regional centres are showing early but clear signs of revival following a generally subdued period of activity over recent years.

The end of the Queensland mining boom and the sharp decline in population growth as a consequence of reduced job opportunities impacted demand for housing.  Speculative over-building in some regions was also a key factor in flattening local housing markets.

Although signs of life are generally returning to Queensland regions, performances remain mixed and as usual largely reflect the nature of local economic conditions.

Mackay and Gladstone have been the hardest hit of the major Queensland regions over the past 5 years with prices falling sharply after a remarkable boom in buyer activity.

Although the Gladstone market remains subdued, house prices in Mackay have started to rise again with confidence now gradually returning to that market. The Mackay economy has also improved recently with the jobless rate falling over the past year to 6.3 per cent – the lowest of all the major central and northern Queensland regions.

The Rockhampton and Bundaberg markets have stabilised over recent months and, although sale prices are still lower than a year ago, asking prices for houses are now rising.

House prices in the Townsville market have fallen steadily over recent years with an underperforming economy a clear drag on activity and exacerbated by a sharp decline in population growth rates. Asking prices for houses however have increased over July compared to June providing the first signs of a revival in the local market.

Cairns has been a clear exception to the recent subdued activity recorded in the major central and north Queensland housing markets. The Cairns median house price has increased by 5.0 per cent over the past year with a June quarter median of $425,000 and well ahead of the next highest Mackay at $340,000.

Low interest rates and improved affordability from lower prices are gradually re-activating Queensland’s recently subdued regional housing markets. Economic activity remains crucial to a sustained revival with a lower Australian Dollar a key to energising regional exporters.

Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson join on LinkedIn and Facebook at MyHousingMarket