Australian Property News

Unit sales favour lower end of market

Posted on Thursday, September 30 2010 at 10:26 AM

Unconditional new high-rise apartment sales in Queensland totalled 274 in the three months ending August 30, according to the Midwood Queensland Investment Report.

This was down on the 283 sales in the same quarter last year, but up on the 178 sales in the same quarter of 2008.

Midwood report author Bill Morris said the average median weekly rent had reached $385 for a four-bedroom house in Queensland.

Many Queensland localities recorded double-digit growth in median unit prices in the year to June 2010. The best performing localities were: Benowa with 43 per cent, Runaway Bay (30 per cent), Moorooka (29 per cent), Hamilton (23 per cent), Indooroopilly (21 per cent), and Broadbeach Waters (17 per cent).

Office vacancy rates on the Gold Coast reached 23.4 per cent in July 2010, the highest vacancy rate in Australia, and the highest rate recorded for the Gold Coast in 15 years.

The Midwood investment report said the Gold Coast new apartment market had continued to stagnate. Unconditional sales of new high-rise apartments totalled 74 in the August 2010 quarter. Sales in the lower price range continued to dominate.

Stock of new apartments dropped to 839, the lowest figure on Midwood records since the November 2004 quarter.

Supply of new apartments equated to three years at the current take-up rate, an alarmingly low result.

Gold Coast aggregate vacant land and new packaged housing sales totalled 496 in the June 2010 quarter, according to the latest Prodap Report.

“Stock, however, is so low that any miniscule lift in demand will cause prices to lift,” said Morris, who also produces the Prodap Report.

“On the Brisbane industrial market, sales activity has been greatest under the $3 million mark and it’s over this price tag where the best buying will occur in 2010 and 2011 across the market.”

Vacancy rates for Brisbane’s office market dropped to 10.9 per cent in the six months ending July, despite significant stock being added.

Brisbane and Townsville were the only major regions in Queensland to record positive growth in accommodation takings over the March 2009-10 quarters.

“The Brisbane new apartment market has been skewed toward the lower price end since tlhe beginning of the global financial crisis,” Morris said.

“Unconditional sales of new high-rise apartments were 162 in the August 2010 quarter, equating to 18 months supply – a healthy level.”

On the Sunshine Coast, the office market has stagnated.

The vacancy rate continued at 16.3 per cent in July 2010, with no new stock added.

Unconditional sales for new apartments on the Sunshine Coast totalled 46 for the August 2010 quarter. Aggregate stock for new apartments was 560, equating to three years supply at current take-up rates.

The Sunshine Coast recorded a median house price of $470,000 in the year to June 2010 (up by 6 per cent) while Brisbane City’s local government area recorded $530,000 (up by 12 per cent) and the Gold Coast was $505,000 (9 per cent growth).

In regional Queensland, residential rents generally increased over the June 2009-10 quarters. Mount Isa and Emerald recorded the largest increases – between $20 and 30 per week for units and houses.

Accommodation performance in Cairns continued to decline in the March 2010 quarter, with occupancies down to an average of just 42.8 per cent.

This was the lowest average occupancy for all major Queensland regions and almost 15 per cent below the Queensland average of 57.4 per cent.

Unconditional sales for new apartments in Cairns totalled 43 in the August 2010 quarter, the same as this quarter of 2009.

A total of 462 new apartments were available for sale in Cairns, representing two years supply at current take-up rates.