Best time for first-home buyers

TOWNHOUSES and units appear to be offering the best opportunity for first-home buyers to get into the Mackay property market.

TOWNHOUSES and units appear to be offering the best opportunity for first-home buyers to get into the Mackay property market after falling to more affordable prices in the last quarter, with a drop of 13 per cent.

But Real Estate Institute of Queensland (REIQ) Mackay branch chairman Barry Lynam said it was too early to tell if this was a trend which would continue throughout 2009.

In the latest data on property prices released by REIQ, the median price for a townhouse or unit in Mackay has fallen from $294,500 in December 2008 to $267,000 at the end of February. In South Mackay townhouse and unit prices are presenting great opportunities for first-home buyers. Back in December 2007 the median townhouse or unit in the area cost $265,000. On February 23 this year the median price was a more affordable $242,500.

But REIQ chairman Peter McGrath said many first-home buyers were switching from buying an affordable townhouse or unit to buying a modest home instead because of the increased grants available from the Federal Government.

He said with first-home buyers' grants of $14,000 to $21,000 available many entering the market could afford a modest house.

“This trend, plus investors not yet comprehensively returning to the market, means the unit and townhouse market has been affected by lower overall demand in the December quarter. Over the year, however, most areas recorded steady price growth,” he said.

The Fraser Coast was the only other region besides Mackay where townhouse and unit prices fell substantially in the last quarter dropping from a median of $290,000 to $270,000.

Queensland's cheapest region for a unit or townhouse was Toowoomba with a median price of $220,000.

Mr Lynam said there could be a number of reasons for the drop in the median cost of townhouse and units in Mackay over the last quarter.

“It is not a real good indicator of a long-term trend. You have to understand how the median house pricing system works. It just takes the top sale and the bottom sale for that quarter and picks a price in the middle. For that quarter the sales could have been in the bottom end of the market,” he said.

“Let's see what happens in the next quarter, if there is another fall then maybe there is a trend developing, but I don't believe that is happening in Mackay.”

Mr Lynam pointed out that despite the recent drop the market for townhouses and units in Mackay had shown growth in the past year with the median price rising from $282,500 in December 2007 to $294,500 in December 2008.

Originally published as Best time for first-home buyers